Besides property investment, gold is one of the most popular investment instruments to this day. Many people are interested in gold because it is considered to have a relatively stable value compared to other assets. However, is gold investment truly profitable?
Before deciding to invest, it is important to first understand the benefits and risks of gold investment so you can make wiser financial decisions. To help you better understand all aspects related to benefits, risks, and tips for starting a gold investment, read the information in this article.
Why Choose Gold Investment?
Gold has long been regarded as an investment with a value that tends to be more stable than most other instruments. One of the main reasons for choosing gold is its ability to protect wealth from inflation. When the prices of goods and services rise, the value of gold also tends to increase, helping to maintain your purchasing power.
In addition, gold is a liquid asset. This means gold can be sold or converted into cash at any time without complicated procedures. This flexibility makes gold an attractive option for investors who want to have emergency funds.
Moreover, the benefits of gold investment also include portfolio diversification. By adding gold to your investment assets, the risk of losses from other instruments, such as stocks or property, can be minimized. Gold acts as a balancing asset that helps maintain portfolio stability.
Types of Gold Investment
Gold investment can be made in various forms, each with its own advantages and management methods. Common types of gold investment include:
Gold Coins
Gold coins are usually minted with special designs that carry artistic and historical value. This uniqueness often makes gold coins sell at a premium price, which can be higher than the standard gold price per gram.
Gold Bars
Gold bars are pure gold, typically with a purity level of up to 99.99% or 24 karats. This type of gold can be purchased starting from as little as 1 gram and resold at potentially higher prices over a certain period of time.
Gold Jewelry
This type of gold usually has a purity level below 70% and is more durable than gold bars. Although more resistant to damage, the resale value of gold jewelry is generally lower than its original purchase price.
Digital Gold or Gold Savings
This type of gold investment is conducted online through official applications or platforms. You can buy or save digital gold in small amounts gradually, for example starting from 0.1 gram, with your gold balance stored virtually.
Is Gold Investment Profitable?
Gold investment can be profitable, but not instantly. One reason is that gold tends to preserve its value in the long term. When inflation rises or currency value declines, gold prices usually remain stable or even increase, helping to maintain purchasing power.
However, profits from gold investment are also influenced by price fluctuations and additional costs. For example, gold jewelry may have a significant difference between buying and selling prices.
Therefore, investment strategies—such as choosing the right type of gold and buying at lower prices or during stable market conditions—are crucial to maximizing potential returns.
Benefits of Gold Investment
Gold investment offers various advantages that keep it popular today. Here are some of the main benefits:
1. Long-Term Price Stability
Gold tends to maintain its value over time despite market fluctuations. Because its price is relatively stable, gold is considered a safe investment for long-term wealth protection.
2. Hedge Against Inflation
Gold is known as an asset that can protect wealth during inflation. When prices of goods and services increase, gold prices tend to rise or remain stable, helping preserve purchasing power even when currency value declines.
3. Easy to Liquidate
Gold is an asset that can be easily sold or converted into cash. Whether in physical or digital form, you can sell gold anytime according to your needs. This makes gold a convenient option for emergency funds or urgent financial needs.
4. No Third-Party Involvement
Gold investment allows you to own assets directly without relying on intermediaries or additional financial institutions. As a result, transactions are simpler, control over your investment is greater, and third-party risks can be minimized.
5. Affordable Initial Capital
With the availability of digital gold, gold investment can now be started with limited capital. You can even purchase digital gold starting from around IDR 50,000. These investment services are also easy to access, making it convenient for anyone to start saving gold.
Risks of Gold Investment
Although gold investment offers many attractive benefits, there are still risks to consider. Some of the key risks include:
1. Not Suitable for Short-Term Investment
Gold prices can fluctuate in the short term due to global economic factors, currency exchange rates, or market sentiment. If your goal is quick profit, gold investment may be less suitable because short-term price movements are often minimal or even negative.
2. Does Not Generate Passive Income
Unlike deposits, stocks, or rental properties, gold does not generate interest, dividends, or regular income. Profits are only obtained when gold prices rise and you sell it, meaning gold investment does not provide passive income.
3. High Spread Between Buying and Selling Prices
Some types of gold have a relatively large gap between resale prices and the original purchase price. This means that selling gold in a short period may result in smaller profits or even losses compared to the initial capital.
4. Risk of Loss or Damage
Physical gold investment carries the risk of loss, theft, or damage if not stored securely. Gold jewelry may also be scratched or deformed, reducing its value.
Meanwhile, digital gold also carries security risks if the platform used is unreliable or experiences system issues.
Tips for Starting Gold Investment
For beginners, here are some practical tips to start investing in gold more safely and profitably:
- Define your investment goals so your strategy and time horizon are clear.
- Choose the type of gold that suits your needs, whether physical gold, jewelry, or digital gold.
- Make sure to buy gold from official gold shops, banks, or licensed platforms.
- Start with a small amount of capital to match your financial capability.
- Buy gold when market prices are stable to optimize profit potential.
- Store physical gold securely to prevent loss or damage.
That concludes the discussion on whether gold investment is profitable, covering its benefits, risks, and smart investment tips. Understanding all these aspects can help you make the right investment decisions and maximize potential returns.
Beyond investment and portfolio development needs, it is also important to pay attention to other financial needs, especially in business. If you plan to expand your business or have personal financial needs in the near future, applying for funding through BFI Finance can be an option.
Without using personal funds or investment returns, the capital you need can be obtained through practical financing from BFI Finance with collateral such as Motorcycle Ownership Certificate (BPKB), Car Ownership Certificate (BPKB), or Property Certificates (House, Shop, or Office Unit). All services provided by BFI Finance are licensed and supervised by the Financial Services Authority (OJK).
So, let’s realize your financial plans in a more structured way because #SelaluAdaJalan with BFI Finance.
