2014.03.10 by Guest Contributor – Sajidah Malvinah

The global economic market hangs under a think cloud of dust. Our markets have not yet fully recovered from the 2009 recession. While the rand has recovered slightly, fear remains that the recession is far from over or may take longer than expected to recover.

The best investment during these tough economic climate is investment in gold, that is buying gold bullion bars, gold coins etc. Gold is a good investment and is not new to the market. It was sold as a medium of exchange from the days of Pharaohs, some 5000 years ago. It was also used by the Greeks and Romans. This led to the formalised selling within international trade markets in the 19th century.

Some of the advantages of investing in gold are:

– It is the safest option, provided gold is purchased from a reputable dealer.

– Gold is money and will never be worthless. Centuries ago, people purchased gold to protect their wealth. Today most countries keep it for security and for future reserves.

– Gold resists damage and is water resistant as well.

– It is worth more in the future and the price hardly depletes. It increases more often than not.

– Gold is the only asset wherein its value increases, when the dollar losers ground or deflates.

– Gold is an easy commodity and available in coins and bullion bars, thus easy storage, but due to the high crime-rate in South Africa, it's preferable not to store it at home.

Investments however are a risk and anything that has an advantage has a disadvantage. The disadvantages of investing in gold are:

– Gold investments do not provide a regular income like the stock market or property market hence there are no dividends, returns or rental income, whilst otherwise one reaps the reward without having to sell the asset.

– Gold investment is pricey. One needs to purchase in cash and unlike the stock market, wherein one pays a leverage on any type of investment. Therefore it is not affordable to all.

– There is no tax advantage in contrast to stock market investments

Invest wisely. A price is what you pay. Value is what you receive.

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