Why gold is melting hot right now: How to invest fee-free
Gold has outperformed Bitcoin and the S&P 500 by over 5% this year.
Gold is one of the oldest forms of currency known to man. Bartering with beads and seashells seems primitive now, and the modern investor may be looking at gold, an age-old commodity, with scepticism. Surely there are new and more contemporary ways to secure your wealth? Of course, there are more options available nowadays but the facts cannot be denied: investing in gold is still as valuable to the modern investor as it was to the prehistoric man.
Author of “Rich Dad Poor Dad” and financial guru in his own right, Robert Kiyosaki said, “Commodities such as gold and silver have a world market that transcends national borders, politics, religions, and race.” Before there was a push towards cryptocurrencies or decentralised finance (DeFi), gold was the currency that transcended financial boundaries.
The current conflict between Russia and Ukraine has shaken the world and financial markets. Not only for crypto, the Russian ruble (Russia’s national currency) has fallen to record lows. Even seasoned investors are keeping a wary eye on the news.
If a new, all-engulfing war wasn’t enough inflation has been surging around the world.
Inflation is the silent wealth killer that may pose a bigger hazard to your investments than a war in the long term.
These may be unpredictable times but there is a way to safeguard yourself and that is through gold and other safe-haven assets.
How gold can help protect your wealth
Throughout history, few investments have rivalled gold in popularity as a hedge against almost any kind of trouble, from inflation and economic upheaval to currency fluctuations and war. Simply put, gold has historically been seen by investors as the “go-to” in terms of safe-haven assets.
Safe-havens are investments that maintain or increase in value during times of market uncertainty. Even during turbulent times in the world, these assets hold strong and provide the security your portfolio needs to weather the storm. Gold is one of the most favoured choices because of its proven credentials as a wealth protector over its centuries of use.
Even though a worst-case scenario currently, war is not a new concept to gold investments. Considering how many wars it has survived and the fact that it still remains a top commodity proves gold is a solid choice.
But wars and pandemics are not the only things gold offers you gilded protection from. There is a big threat to your wealth that increases silently every year — inflation. And war may only be worsening the situation.
How inflations effects you and your wealth
You have most likely heard a similar story from a family member, “When I was younger I could buy a bag of chips, three loaves of bread and a case of drinks all for 50c. Plus I would still get change.”
While it may sound far-fetched, there is truth in this tall tale. The cost of just about everything is higher nowadays because of inflation.
Inflation is the rate at which the price of goods and services increases over time.
Most people don’t pay too much attention to inflation and accept it as a consequence of life. But smart money knows that if you aren’t keeping ahead of inflation, you’re stunting your wealth’s growth potential.
In South Africa, your money is currently buying you -5.7% less than it did a year ago. What this means is that your wealth is eroding every year you decide to hold cash over an investment.
“I know -5.7% inflation doesn’t sound like a lot, but if that rate continues for 10 years, people would have lost roughly -44% of their buying power. Looking at that number, it’s easy to see why it is becoming more and more important for people to protect their wealth in times of inflation. They can do this by picking the right investments,” says Chris Beamish, Investment Analyst at crypto Investment platform, Revix.
Throughout history, investors have looked to protect their wealth in times of inflation by buying assets that will either keep up with inflation or beat it. Certain assets such as stocks and housing are known as “inflation hedges” and offer protection against the rising tide. But it’s gold that holds the longest and most successful track record in beating inflation.
How has gold performed against inflation
As you can see above, investing in gold has been a great way to make sure your money retains or increases its purchasing power over time. Gold has outpaced inflation by +47% over the last 5 years – this means that instead of life becoming seemingly more expensive, life actually became +47% cheaper for you.
Why “smart money” invests in gold
Institutional investors have at least 1%-5% allocation to gold and other precious metals. These are the smartest minds in the investment world, so you have to ask yourself why?
The reason is simple: no one, not even Robert Kiyosaki, knows what will happen tomorrow. You should be preparing for all possible outcomes. One way to do this is by holding a well-diversified bundle of assets that accounts for multiple outcomes.
This is what the best in the world do and it works.
How can you invest in gold?
While gold may be a centuries-old currency, the benefits it offers have no expiry date. In fact, you don’t have to restrict yourself to just buying physical gold, like coins or bullion, when investing in gold has been updated and modernised by Paxos Gold (PAXG).
You can effortlessly invest in gold through Paxos Gold (PAXG), a US regulated and insured ounce of gold that sits on a blockchain. PAX Gold is for anyone looking to invest directly in gold without the custody and insurance burdens of physical ownership. One PAXG token is backed by one fine troy ounce of the highest quality gold stored in high-security, fully insured vaults.
Revix, a Cape Town-based investment platform backed by JSE listed Sabvest, offers PAXG on its platform. With all Revix’s investments, including PAXG, there are no lockup periods. You can withdraw your funds at any time. Revix’s live customer support team can guide you through the sign-up process to your first deposit and first investment. Once set up, most customers manage their own portfolio but can access support from the Revix team at any time.
Revix’s PAXG promotion
Revix is offering 0% buy-in fees on PAXG purchases using ZAR for one week, starting on the 4th of March and ending on the 10th of March 2022.
That’s zero purchase fees when you buy PAXG.
What else does Revix offer?
Revix also offers three crypto Bundles that are like the S&P 500 for crypto. Investors gain diversified exposure to the top-performing crypto assets in just a few clicks.
The Top 10 Bundle provides equally weighted exposure to the top 10 cryptocurrencies making up more than 85% of the crypto market.
The Payment Bundle provides equally weighted exposure to the top five payment-focused cryptocurrencies, including Bitcoin, XRP and litecoin. These cryptos aim to make payments cheaper, faster and more global and are aimed at those who believe making payments with cryptos will become as easy as sending an email.
The Smart Contract Bundle provides equally weighted exposure to the top five cryptocurrencies built around smart contracts and includes the likes of ether, EOS and tron. Smart contract cryptocurrencies sit on the blockchain rather like mobile apps rest on Android or iOS. These cryptocurrencies aim to revolutionise how supply chains and trading networks operate through smart contracts. This is Revix’s top-performing Bundle as it has benefited from the explosive growth in the decentralised finance (or DeFi) space in 2021. DM/BM