Gold an insurance for bad times?”
In times when the stock market is doing well, the economy is booming and there are no crises visible from a far, gold certainly underperforms. Basically, gold is an insurance against bad times. Central banks around the world are also hoarding huge amounts of gold. They want to reduce their dependence on the dollar. The dollar could be the world’s reserve currency. But gold is the central bank’s store of value and is considered the ultimate lifeline when the entire system collapses.
So far so good. There may be a lot to be said for gold investments. But there is also a lot to be said against it. Hardly any other asset class is discussed so heatedly. To put it bluntly: You hate gold or you love it. There seems to be nothing in between, at least if you look in Internet forums or in the comments on social media. The arguments of the critics: The money does not work when you invest in gold. Whether you earn a return depends solely on whether the price of the yellow precious metal rises or not – supply and demand determine the price. In addition, gold is a highly emotional asset class. This is another reason why the price of gold regularly rises in times of crisis, precisely when the fear in the markets is greatest. Gold is a kind of insurance for these times. That’s why experts also recommend a small admixture – depending on the risk appetite – of three to ten percent.
As always with your investment, it is a very individual decision whether you want to bet on gold and how high the share should be. If you choose to do so, there are several ways to invest. Of course, you can buy coins and bars. Or you bet on gold on the stock exchange via Futures. Alternatively, you can invest indirectly through shares of gold mining companies.