Oplatí sa investovanie do zlata? - Salus Populi

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3.11.2020

Is It Worth Investing in Gold?

This yellow metal is considered by many investors to be a safe investment in times of economic uncertainty due to the preservation of asset value. Typically, gold is seen as a hedge against inflation and a store of value through thick and through thin. We should stick with this statement. Nothing more, nothing less.

I would like to paraphrase the American well-known investor Warren Buffet, who has said: "People will dig gold out of the ground, put it in another shape, and hide it again."

Experts do not consider it an investment instrument that brings regular profits in the same way as, for example, stocks or bonds. Historically, investing in gold is not exactly a way to make interesting returns.

Therefore, a period of recession plays in favor of sellers, which they can use as a suitable argument for investing in gold.

Likewise, the COVID-19 crisis has contributed for buying more offers. The offer was really varied. From coins, gold bars, bricks, to depositing cash, which you will later exchange for physical gold.

Fear and ignorance of the crisis won again and created the ideal environment for the sale of this metal. The nice shiny color also gives it a touch of luxury, which also helps to sell.

Gold as a value keeper

I agree. As a store of value, gold may be a good choice at such times. These are the times when investors realize that diversification makes sense. However, ... experts recommend having invested in gold about 10% of the investment portfolio.

The rest should be stored in value-added assets. That is, after all, the goal of investment, isn't it? The long-term capitalization of gold is lower than that of other assets.

The price of this precious metal has increased on average over the last 100 years by 4.36% per year. If we compare it with inflation in Slovakia since the establishment of the Slovak Republic, these revenues will not even protect the value of money over time.

When the economy is doing well, gold tends to fall as investors leave this "safe haven" and move capital into tools that can value their assets more effectively.

Nie je všetko zlato, čo sa bliští

Buying and holding gold brings with its other disadvantages, especially in retail sales. The range of fees is wide and the commission of 20% of the price is nothing special. Many investors do not even realize that the price must rise by 20% to reach at least zero. Can you imagine buying gold in 1981 and waiting 25 years to reach at least that zero?

Myslím, že sa vyjadrím za viacerých keď poviem, že je to veľmi nepríjemná predstava. Rovnaká situácia vznikla v roku 2011. Kto investoval vtedy, musel čakať do júna tohto roku, aby bol opäť aspoň na nule. 

Although not quite ... They still cut their own high fees for mediation, or storage of gold in the bank, or some insurance. Nine inefficient years.

An investment deposited in gold would generate zero return after nine years, and the investor would even be in the red numbers due to fees.

Certainly, the COVID-19 crisis contributed greatly to the "solemn" return to zero. Historically, gold has generally risen when markets fall or at least maintain value. But this is not always the case. Whether it will go down the hill with gold again after the crisis, we can only guess.

Let´s not leave aside the liquidity, which in the case of physical gold will not be preferable to everyone. Selling gold coins or bricks is not always easy, and if you do, it will probably be at a lower price than the market price.

Despite everything, a long-term average capitalization of around 4% per year should provide you with at least protection against inflation. Let me make it clear. If you want to invest in gold, then you have guarantee to preserve value.

Active management as an effective way of investment

In recent years, alternative investments have occupied the leading places of popularity for their uniqueness, specifically their active form.

Also members of the Salus Populi cooperative see an opportunity for more effective asset in active portfolio management.

The cooperative operates on active portfolio management because uniqueness lies in the ability to achieve revenue regardless of the direction in which the market is chosen.

The added value in terms of time frame is the ability to manage capital much more efficiently. While gold loses value at a time when prices fall, active management managers can use these slippages to their advantage to generate profits.

Another indisputable advantage over gold is the commission scheme, also called the "success fee." This means that the stakeholder must earn money first, and then comes the manager's reward line.

The cooperative brings stability to its members in the long run term, regardless of what is happening in the economy. Join our community of stakeholders that creates benefits in times of prosperity as well as times of economic instability. Join our community of stakeholders that creates benefits in times of prosperity as well as times of economic instability.