Gold VS Stocks. Why is it profitable to invest in gold?

Gold VS Stocks. Why is it profitable to invest in gold?


The question of what it is better to invest in remains on the minds of many people. It is quite understandable, because one wants to invest the money one earns wisely, not just to keep it safe, but also to make a profit in the future. We have already considered the particularities of investing in cryptocurrency and compared it to gold. But what about stocks? The modern market is full of offers to gamble on stock exchanges, to raise a big sum due to the difference in quotes, to take a risk - and to win. But is it so easy to play the stock market? And is it worth getting involved in the stock market game? This time, we decided to compare the prospects of these two investments: gold and stocks.

Let's start with the similar qualities of these two investment methods

  • Both gold and stocks are among the oldest investment options. People have been actively using them to multiply their profits for more than 100 years.
  • Both are good for long-term investments. Of course, stocks also allow for short-term earnings, which is exactly what numerous traders with various success rates earn.
  • Both types of investments provide their investors with mobility: you are not bound to your place of residence or location, unlike with real estate, for instance.
  • Both gold and stocks are reliable assets, despite market fluctuations. Their price is fairly stable, and the general vector does not change in days.

But while gold and stocks have quite a lot in common, the difference between them is also quite significant.

Weaknesses of stocks: why gold is more profitable as an investment asset.

First of all, the difficulties begin with the choice of the stocks themselves. And there are incredibly many of them, because in fact even the company nearest to you can issue its own shares. But do you really need them? Therefore, the reliability of stocks, although high in general, when it comes to the market, may be both low and high when it comes to the choice of a particular company's shares. Before making a purchase, it is always a good idea to thoroughly study the business history of the chosen company, read analysts' forecasts - after all, there is a risk that the company will go bankrupt after buying its shares. Gold is always reliable: it is in demand all over the world, and it is not threatened by an overproduction crisis.

The complexity of asset management is another important factor. If you can manage your gold reserves on your own, even without additional education and experience, then with stocks you should not rely only on your luck and intuition. It is better in this case to immediately hire an analyst, who will advise you on the right decisions. And this is also money. Your money.

As for the earnings, then it is better with stocks in the long run. Analysts provide statistics on stock/gold profitability at a ratio of 925%/450% over 50 years. But we should make a correction: these figures are obtained without taking into account the stock market crashes, and they happened twice only in the last 15 years. In other words, the risk that you will not get your desired 925% for half a century is quite high. Gold is not subject to market fluctuations, in fact during the economic crisis or market collapse, its price is increasing, for instance, like it was last year.

To sum it up, both gold and stocks have high safety in the global sense, but it is exactly gold that retains this safety in each individual case. Stocks can provide you with impressive income over the course of decades, but their dependence on stock markets and the economy as a whole can negate that possibility. Gold stands monumentally strong and only increases in value in times of crisis. To make it even simpler: when you invest in stocks you additionally acquire the prospect of losing a lot of nerve cells because of exchange rate fluctuations; with gold you acquire not only bullion, but also stability, peace of mind and confidence in the future. Do you want to invest in all these prospects? At Golden Way we can help you!