Gold Vs Bonds

Low-risk, low-cost investment

As you find yourself with the ability and the desire to invest, you might not know how or what to invest into. Although, bonds may seem like the safest option to invest into, but what has the highest return relative to fiscal stability?
The first thing you might think off when deciding what to invest in might be what is the safer option? There is a deep-seated belief that bonds are a safer and secure while gold is riskier and highly volatile this is, however, not the case if one looks at the investment indices performance (and other sources) they will find that it is gold rather than bonds that offer the highest wealth security.

Gold has continued to show enormous stability throughout it’s years and in comparison to bonds, gold is highly stable. During inflation, bonds are seriously damaged leaving investors with a significantly lower interest rate. Gold, however, is resilient and has a negative correlation to financial assets, this, therefore, provides complete protection from not only inflation but any currency crises. During inflation, gold has generated annual compounded rate of return of 16% in comparison to bonds which only generated 8%.

Unlike bonds, gold holds no counterpart risk and investments can not be reduced to zero, whereas bonds, like equities, are someone else’s liability and the yield of your investment depends on this ‘someone else’. If gold investors require cash flow they can simply liquidate part of their gold portfolio in order to generate instant cash flow, bonds however are not this easy to turn into a cash flow making gold a stress-free investment that can offer a cash flow at all times.

Each investment provides its own risk; awareness, knowledge and clarity of the market will allow you to reduce this risk. Both of the investments have the potential to provide lucrative returns, which one you choose to invest in is your choice but we must state that we fully support the investment into gold due to the lowered risks of investment.