Can you invest in gold? Is gold worth investing in?
In the eyes of most investors, gold seems to be a very good investment variety. As long as they have idle funds in their hands, they want to buy some gold to maintain their value.
From the perspective of investment, is gold really suitable for ordinary people to invest?
The rise and fall of the gold price always affect the hearts of countless investors. Therefore, the attention of the gold price is very high. Many times, the consultation of analyzing the trend of the gold market will have a very high number of hits. It can be seen that the serious situation of the gold in the common people is very important.
Let's take a look at two very important factors that affect the gold trend: the US dollar and the global economic environment.
Gold and US dollar
The first is the US dollar, but the trend of the US dollar and gold is in the opposite direction. When the US dollar is stronger, gold will be weaker, and when the US dollar is weaker, gold will be stronger.
After the Federal Reserve cuts interest rates, more money will generally flow to the market to stimulate economic development. But the interest rate cut will also lead to the depreciation of the dollar. Because the reduction of interest rate will lead to a large number of US dollars being sold off, after investors sell US dollars, they will turn to invest in another currency which has the function of keeping value - gold. As the number of people who buy gold increases, the price of gold will also rise.
So generally speaking, the Fed's interest rate cut will lead to the rise of gold.
Gold and global economy
The global macro economy is relatively weak at present, and the core function of gold for a long time is to avoid risks. Therefore, in such a risky environment, the investment value of gold is more prominent.
When the financial market fluctuates violently, we especially need a robust portfolio allocation. The core value of asset allocation is to make the income of asset portfolio more stable through weak correlation diversification.
With the risk of global economic weakness and the severe shock of financial markets, the hedging effect of gold is obvious.
The factors that affect the price of gold are multiple and complex, so we will not cite them one by one here. As an individual investor, is it necessary to invest in gold?
First of all, we should make it clear that the most important role of gold is to avoid risks, and its investment value-added value is not large. In the long run, there will not be much room for value-added. Compared with the stock market investment of similar index funds, the investment return of gold is much smaller.
The allocation value of gold is more suitable for high net worth investors. If you have a lot of money, it makes sense to allocate 5-10% gold for the stability of your portfolio. But for most of the middle class and young people, a little gold really doesn't make any sense.
Of course, if you want to invest in gold, you can also consider buying gold bars. Gold jewelry is of little investment value, because gold technology is not valuable. If you want to sell it at that time, it will only be calculated according to the weight of gold. But when you bought gold at the beginning, you calculated the process fee according to the amount of gold per gram.
Or invest in paper gold and gold ETF funds. Gold ETF is also a kind of index fund. At present, there are Hua'an, e-fonda, Cathay Pacific and Boshi gold ETFs to choose from. The choice is not very different.
[disclaimer] the publication of this article by finance managers for the purpose of transmitting more information does not mean that they agree with their views or confirm their descriptions. The content of this article is for reference only, and does not constitute an investment proposal. Investors operate on this basis at their own risk