Is Gold $GOLD $GLD a good investment in 2021?
No. Because gold is not an investment. 𝙄𝙩 𝙞𝙨 𝙣𝙤𝙩 𝙖 𝙫𝙖𝙡𝙪𝙚 𝙤𝙧 𝙘𝙖𝙨𝙝 𝙛𝙡𝙤𝙬 𝙥𝙧𝙤𝙙𝙪𝙘𝙞𝙣𝙜 𝙖𝙨𝙨𝙚𝙩. It is just an alternative to cash. You don't invest cash, you save cash. And for gold, you hedge gold.
🥇 Gold is known to keep its value over time. You need the same amount of gold to buy a loaf of bread today as you would have needed in Ancient Babylon. Although gold has some industrial applications, what really affects its price is its 𝙪𝙨𝙚 𝙖𝙨 𝙖 𝙝𝙚𝙙𝙜𝙚.
💸 Is Gold a good hedge against inflation? Today, we have monetary inflation and asset price inflation but not really CPI inflation yet. Normally, it is an 𝙞𝙣𝙘𝙧𝙚𝙖𝙨𝙚 𝙞𝙣 𝘾𝙋𝙄 𝙞𝙣𝙛𝙡𝙖𝙩𝙞𝙤𝙣 𝙬𝙝𝙞𝙘𝙝 𝙞𝙣𝙘𝙧𝙚𝙖𝙨𝙚𝙨 𝙩𝙝𝙚 𝙥𝙧𝙞𝙘𝙚 𝙤𝙛 𝙜𝙤𝙡𝙙. Since it is likely that in the coming years, we will have higher inflation, it is also likely that we will see higher gold prices. If the Federal Reserve System raises interest rates to fight inflation, this would make stocks unattractive and gold might be the best hedge against inflation. However, nobody knows for sure what will happen in the short term.
⛏️ I believe it is always a good idea to hedge against the possibility of higher inflation. But instead of holding gold, I believe that 𝙖 𝙜𝙤𝙡𝙙 𝙢𝙞𝙣𝙚𝙧 𝙞𝙨 𝙖 𝙗𝙚𝙩𝙩𝙚𝙧 𝙤𝙥𝙩𝙞𝙤𝙣. Gold mining stocks are more volatile but if gold prices can increase, they can generate cash flow and return it to you.
That doesn't mean you should invest in a random gold miner $GDX . I invested in Polymetal International $POLY.L since 2019. 𝘼𝙡𝙬𝙖𝙮𝙨 𝙛𝙤𝙘𝙪𝙨 𝙤𝙣 𝙩𝙝𝙚 𝙗𝙪𝙨𝙞𝙣𝙚𝙨𝙨 𝙖𝙣𝙙 𝙩𝙝𝙚 𝙛𝙪𝙣𝙙𝙖𝙢𝙚𝙣𝙩𝙖𝙡𝙨.
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My full analysis of Polymetal International:
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