You probably heard it from your parents or relatives, save money and invest into things like gold. But what is the future actually looking like for gold and the market? Unlike what you’ve been told, gold might not be the best investment for you. However, it is true that an investment in gold is good for 95% of the population. It’s mainly a hedge fund against inflation. Put in layman’s terms, hedge funds are protection methods or tools against things like inflation or recession.
Inflation is something that affects everyone and their households. Even the ultra rich people in the world don’t like seeing their money get devalued. Inflation peaked in Turkey at 73.3% in may 2022. The average inflation rate in Turkey over the year of 2021 was 19.6% meaning an item in a store that cost 100€/£/$ in January of 2021 would have been priced at 119.6€/£/$ in January of 2022. Thus in essence your money or your “buying power” is going down.
Gold’s 50-year return is +4.084%, so 1 Euro/Pound/Dollar invested in gold would be worth a mere 4,000 today. But that is a gross return. Adjusted to the current inflation, that would now be worth a net 3420€/£/$ since the cost of living went up 600% in 50 years. However, do know that gold can fluctuate a lot on a short term basis. But that makes it a perfect investment for people to keep the worth of their money, beat inflation and get a nice profit on it as well.
What is the future looking like for gold now?
This is a question nobody on this planet could answer with any certainty. But There are people out there whose job is to analyse graphs and averages all day, day in and day out. They become masters of predicting prices and market timings. There are websites for this that are a one-stop shop for investors all around the world. Read more about them in the article that talks about gold price predictions for next 5 years.
But logically thinking, the metal gold is a finite resource. So logically, it should go up and keep going up in price since we are running out of places to physically dig the metal from. So, at some time in the future, all the gold in the world is going to be dug up or mined, so the circulation is limited.
However, saying that we will run out of gold one day would be a bit incorrect since there would always be a set amount in circulation and then the ultra rich will be fighting for it.
Saying that we will run out of new gold would be correct. Also, in our modern day and age, we see a lot of recycling happening around the world so gold is getting recycled everywhere, in watches, electronics and others.
Should you invest in gold? Well, if you are looking for a long-term investment that you can hand out to your children or grandchildren, then yes! Gold is definitely a wealth builder in that sense. Also we talked about how it protects you against currency instability and inflation.
You can see amazing returns on gold over a course of 20 years, or even less. But gold investments under 5-7 years are not really worth it, looking at the data.
We also talked about how some people make it their job to analyse all this data daily and report the result to help people know how things are looking like. But once again, nobody can give a prediction with 100% certainty.
Other things to invest in over the long-term would be real estate. We have seen a rise of 12,000% over 50 years in real estate.
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