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  • Writer's pictureCarolina Pérez

“Selling Gold Headache”

For many, gold is the safest asset to invest in, and the main reason behind it is its history and capacity to keep up float throughout time. There have been different and innovative investment opportunities throughout the years. Bitcoin and the cryptocurrency ecosystem only date back to 2009. Besides all these different investment options and new ones arising, gold seems always to be there.

It is always recommended to have a diverse portfolio. From your current portfolio, you might like one asset more than another, but apparently, a diverse portfolio is a way to go, and when it comes to choosing what asset for many, gold is a must.

“There are several factors that make gold a strong safe-haven asset. It’s valuable as a material for consumer goods such as jewelry and electronics, and it is scarce. Regardless of demand, supply remains disproportionately low. Gold cannot be manufactured like a company issues new shares or a federal bank prints money. It must be dug up from the ground and processed.”

“Accordingly, gold has almost no correlation with assets like currencies, and stock indices such as the S&P 500. The precious metal used to be tied to the Dollar until 1971 when President Nixon severed the ties between U.S. currency and gold as a base. Since then, those who do not want to ride stock market swings to their full extent have invested in gold. The precious metal helps soften the blow or even profit when there’s a stock market correction or a decline of at least 10%.”

“Gold usually performs well during corrections because even if it doesn’t necessarily rise, an asset that remains static while others decline is quite useful as a hedge.”

Although gold is one of the oldest assets out there, it does not escape the need for modernization—one of the biggest struggles that gold faces is purchasing it. For many investors buying gold can be a hassle transporting it overseas. I've seen it is cheaper to buy a plane ticket for someone to pick up gold and bring it back instead of using third party services; not to mention trusting the third party to transport your purchase safely.

When you think about how complicated this type of precious metal can be, one can understand why new technologies such as cryptocurrencies are a suitable investment method; generated instantly from anywhere in the world. Yes, some options are available and make buying gold easier, such as Gold Money. “A Goldmoney Holding is an online structure that allows you to securely purchase in precious metals owned in your name at insured vaults across five countries.”

Nonetheless, not everyone is comfortable leaving their assets protected by a third party, and in this case, you would have to buy it and store it yourself. I believe this may be more or less complicated, depending on your country of residence. For example, there are not many places to gold in Chile from other countries, and if you do find them, the price is outrageous. There are also many buy/sell stores, but it focuses mainly on Chilean gold. This can be a problem if you are in Chile trying to sell gold from another part of the world. Yes, you may find a buyer, but good luck with that. DavinciJ15 and I tried selling at a local store; we had no problem and received a fair amount for the Chilean gold coins. Once we wanted to sell an American or Canadian coin, prices were lowered significantly, and felt completely ripped off. The process of selling took days and research to finally being able to sell.

I must recommend selling gold from other countries to private gold companies or a private collector. This whole selling process made me think, ok, this is stressful, unlike crypto, where you can do it from home and anywhere in the world with just a click away. As I said, it may be easier in other countries where there are more options to buy or sell this precious metal. Nonetheless, these are some of the things that have to be considered when deciding to include gold in your portfolio.

By: Carolina Pérez

Twitter: @carolinaninap

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