Are you a young, new, or aspiring entrepreneur looking to take your first steps with investing in gold and are not sure on how to interpret the daily gold price?
There are many sites on the internet that give you an explanation of how gold prices work, but sometimes even reading all the information is too much for some people to manage. Inexperienced investors can be overwhelmed when working with hundreds of data points that don’t seem to make any sense. And because the price of any commodity or stock is not static and changes every day, you might not understand how to read trends over longer periods.
Gold price is affected by a number of economic factors, including supply, demand, and investor behaviour. This sounds clear enough, but often the way these elements work together is paradoxical. Many investors, for example, regard gold as an inflationary buffer because fiat currency is prone to depreciation the more of it is printed. Whereas gold is already regarded as a finite resource, and its prices stay fairly consistent.
The price of gold has been steadily rising over the years. If you’re a young entrepreneur looking to invest in gold or a person looking to make their own investment in the commodity, then you should pay attention to the newest and most timely statistics out there. The main reason is how gold is doing as an investment.
Gold Investment Has Doubled in Five Years.
What are some of the reasons that investors are increasing their gold holdings so much? Young people are finally choosing gold as part of their financial allocation because the price of gold has risen by about 280 percent over the last 30 years. The Dow Jones Industrial Average (DJIA) rose by 839 percent during the same time. Remember though that the DJIA is an index tracking 30 blue-chip companies while gold is a singular commodity. Gold is not tied to anything else, but the economic factors mentioned previously, making it a standout investment on its own merit.
If you’re scared to invest directly in gold, as some people and institutional investors are prone to do, then you can use a gold ETF. A gold ETF follows the price of gold and rises or falls in proportion. Also, an ETF works similarly to buying shares, so you will own a percentage of an ETF that pays out by how well or badly the adjacent gold price does.
It’s not necessary for you to analyse market research to calculate which direction markets are expected to move. Even an ETF’s performance may fluctuate significantly from month to month. The best thing to do is to entrust a trusted financial advisor who specifically deals in commodity trading to help you.
You would want to invest some of your small business revenue anyway, and since gold has always been a great inflation hedge, it seems the natural choice. COVID-19 temporarily made this year one of the scariest investment moments in history. The economy seemed close to collapse, no matter how many trillions governments were printing in the name of ‘quantitative easing’.
So how do you begin investing in gold as a young entrepreneur without breaking the bank?
Millennials have weathered many economic meltdowns, from the unpredictability of world governments, to the lack of faith in our financial institutions and their ability to stay solvent. Investing is something you should consider easier when you’re young, as your responsibilities are few and you can afford to be aggressive with a percentage of your income.
The easiest way to capitalise on gold investment while keeping it incredibly affordable, is to create a monthly debit order and forget about it. Just let the money go off your salary or business account and leave it there. Because gold has historically proved to be quite stable, it will grow. And the power of compound interest will work for you. Keep increasing the amount that you have debited by a reasonable percent each year and 3 or 5 years later, check on the account to see if you can make better gains. Maybe you know of a gold ETF with higher returns or there is another commodity you would like to diversify into. You’ll have more money to invest and it will work harder, and faster for you.