Savings Vs. Investing: Why Sell Your Stocks To Buy Gold?

goldandlandsadmin September 27, 2022 No Comments

There are 101 reasons why most wealthy folks would consider savings to buy more gold over other investments, rather than savings to investing in stocks.

This is not because most owners of gold don’t do other businesses, it has most times get to do with their level of financial exposure, confidence and financial security the gold business has enable them retain for them years. Why most sellers of Gold would rather use their money to invest more in gold, than savings to put their money in stocks.

One of our major commitment on this platform is to bring to you vital fact for growth and progress in career and gold business. Today I will discuss some good reasons any investors looking at the current worldwide happening should choose Gold business for stocks, or rather invest in gold business. But if you wants to keep investing in stocks, It is sometimes advisable to invest in stocks only if the stocks are completely independent from governments and States.

Savings Vs. Investing

“The faster you can make a decision the more likely you’ll be able to seize opportunities—before someone else does”

– Robert Kiyosaki

While will you consider to save your money rather than investing? I am not against those not saving, but over time as the world faces inflation and devalue of currencies, saving has done more harm to reduce wealth conversion rate than investing. [Also Read: 5 Reasons Gold May Rise Beyond Real Money ]

The good thing about most individuals always investing their savings is to a life guarantee that sustain tangible results if well done. And in such, investing in gold is one way to protect your assets from inflation and other economic factors that may affect the value of your money over time.

For caution purpose

I am only voicing my opinions.  It is not mandatory to those who wouldn’t want to invest in gold business to do so, most who still prefer buying stocks and sees it much more secured can do so base on deep and logical thinking. Therefore let’s reason together…

What is Stocks?

A stock is a type of investment that represents an ownership share in a company.A stock is a security that represents a fractional ownership in a company. When you buy a company’s stock, you’re purchasing a small piece of that company, called a share.

Investors purchase stocks in companies they think will go up in value. If that happens, the company’s stock increases in value as well. The stock can then be sold for a profit. For investors, investing in stocks is a way to grow your money and outpace inflation over time. When you’re a shareholder, you can make money when stock prices rise, you may earn dividends when the company distributes earnings.

Why Gold Comes First In Financial Security?

My real job is not to explain to the people who govern us, or aspire to do so, how they could manage our affairs better, but to try to understand what is the reality that savers must confront when looking to deploy their assets in the hope of becoming financially independent.

When economic times get tough or international conflicts such as what’s happening with Russia and Ukraine throw the markets for a loop, investors often turn to gold as a safe haven. With inflation spiking and the stock market trading well below its highs, some investors are looking for a safe asset that has a proven track record of gains, and that’s gold.

Investors like gold for many reasons, and it has attributes that make the commodity a good counterpoint to traditional securities such as stocks and bonds. They perceive gold as a store of value, even though it’s an asset that doesn’t produce cash flow. Some see gold as a hedge against inflation, as the Fed’s actions to stimulate the economy – such as near-zero interest rates – and government spending have sent inflation racing higher. As Dostoyevsky once said:

“Money is coined liberty.” The better you invest your savings, then, the freer you will ultimately be. I do not wish you anything less than that.

So what I am saying to you is that you should increase the proportion of gold in your portfolios and buy some, if you didn’t already have any, but that you should also reduce the size of the stocks component, because the situation is getting bad.

Why? First of all, because inflation is accelerating in the United States and in other nations of the world, something that is never good news for the stock markets around the world. Inflation has been accelerating in the United States for more than a year. So, reduce the number of stocks you hold and buy gold.

Why Sell Your Stocks To Buy Gold?

• Gold is the only money that has never failed in the 5,000 year history of its use by humans.

• Currently, there is only enough investment-grade gold available on Earth for every living person to have 1/3rd of an ounce.

• Time and again throughout human history, gold has been revalued to account for all excess currency in circulation. Today, to account for all the U.S. dollars printed by the Federal Reserve, gold would have to be revalued at USD15,000 per ounce.

• In times of crisis, gold is the safest investment that also has the greatest potential to increase your wealth.

• Gold is a completely private and anonymous investment that is also extremely portable.

To analyze the path gold has taken according to my search, the start of this century, it went from $300 to $1600 from 2000 to 2012, before losing almost half of this increase between 2013 and 2016, by breaking to the downside its 5-year moving average. It then climbed back up, breaking to the upside its moving average, and it has stayed above it ever since. At the time of writing, gold is close to its record highs as a price per kilo $53,717.47.

I am not a technical analyst, far from it, but if I were to use this analytical technique, I would say that the ‘target’ for the price of gold is approximately reasonable. Currently the world in 2022 seems very troubling. Some of the things happening in US and other countries of the world:

• Covid and the new ‘Cold War’ between China and the USA have caused production to be shut down in numerous industrial sectors due to a shortage of spare parts virtually all over the world, and if you order a Ford, a Toyota, or a Peugeot, you’ll be lucky if your new car is delivered any earlier than in 15 months’ time. And the same is true for most products. And so the people who can produce goods, or who have stocks, raise their prices, as one would normally expect.

• What’s more, China, the world’s factory, can quietly control its export prices by adroitly reducing its supply, and anyone who can’t or won’t pay, or indeed anyone whose governments have upset the Chinese Communist Party in some way, will have no access to the spare parts they need and will therefore have to stay closed. The quantity of products therefore goes down, whereas the supply of money increases; this generally results in a hike in prices..

• We seem to be heading straight into an unprecedented energy crisis, at breakneck speed.

• Food commodities are skyrocketing, and that is going to prompt serious problems in North Africa, as always happens when the price of food goes up. That is not good news for Europe in general and for France in particular.

• Covid is continuing to make our governments increasingly dictatorial, without the loss of our freedoms improving our life expectancy in any way.

All of that constitutes merely the ‘known unknowns’, whereas the real danger perhaps lies in the ‘unknown unknowns’, and will therefore come as a complete surprise. No-one thought there was going to be a pandemic, three years ago.

In conclusion,

What I can say for sure, though, is that the stock markets are ‘fragile’ and that they therefore tend to fall when their uncertainty, and therefore their volatility, increase, whereas gold is ‘anti fragile’, i.e. it tends to rise when everything’s going badly. And since managing your own money means managing the risk I’m willing to take, what I am trying to tell you is fairly straightforward.