Gold vs. bonds: why is it profitable to invest in gold?

Gold vs. bonds: why is it profitable to invest in gold?

09.07.2021

There are many investment options today. Some people want to invest in a clear and simple currency, for some people the best option is to invest in real estate. There are also more complicated investment options, such as treasury bonds issued by the government. But is it worth investing in bonds, and do they have advantages over investing in gold? At Golden Way, we've gathered useful information on this topic, and we invite you to read about it in our article.

Treasury bonds: why are they considered an effective investment asset?

Over the last 50 years, bonds have been considered to be the most reliable investment asset for the following reasons:

  • They have low volatility, which means they retain their price over the long term.
  • They are issued by the government, which means they are secured by it.
  • They do not depend on fluctuations in raw material prices.
  • Bonds are considered as an asset that guarantees the return of the invested amount to the investor at any market condition.

All of these things made bonds advantageous and turned them into a great way to preserve our capital. But things are changing, and today it is gold that is considered to be an effective substitute for bonds as a long-term investment. And here's why.

Why is gold displacing bonds from their leadership position?

In the 80's the gold market collapsed for the first time in many years, which caused many investors to leave this way of preserving their money. But modern stock market analysis shows that in spite of crashes, gold was much safer than bonds, whose yields were often not only zero, but even negative. Gold's yields, meanwhile, remain stable. There are other factors that are in favor of the yellow metal as an investment object:

  • Gold has little correlation with stock market fluctuations. Bonds can lose value if the stock markets are brought down by "bears", the term used by selling investors seeking to reduce prices to a minimum.
  • Gold is in demand everywhere. Bonds can only be used for trading or sold, while gold is a resource that can be turned to your advantage in many different ways: it can be kept until demanded, turned into jewelry, and sold not only to investors but also to industry.
  • In times of instability, gold is only increasing its potential. Today it is considered to be the best way to keep savings.

Obviously, gold can be hardly called the main asset in an investment portfolio, but if you have to choose between it and bonds, gold is considered to be the best option for the long-term preservation of capital and its multiplication. Diversify your investment portfolio with gold bars of high quality from Golden Way, and be secure about your assets.

In return, we will do our best to make you a leader when it comes to investing in gold and use the most profitable tools to enhance your welfare.