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Gold is one of the investment tools that is considered as an investment tool. refuge Or more instruments to buy when the economic downturn is considered safe. There is certainly some truth to this logic. Considering that the demand for gold for both the jewelry and the industry is relatively stable.

However, this does not mean that the price of this precious metal cannot be reduced. According to some sources There is a possibility that gold prices will fall along with the economic recovery. The reason is when the economy improves. Inflation will start to rise and people will reduce their allocations for investment. or if not reduced They will look for investment instruments that offer higher returns than inflation. However, the effect of inflation on the price of precious metals still needs more research.

And if you get profit from investing in gold how much per year?

How much profit is gold investing in one year?

Figure 1: World Gold Prices (Source: Macrotrends.net)

From Figure 1 above, it can be seen that in 2020 the world gold price has increased by almost 25%, which means that If you bought gold for Rp 1,000,000 at the beginning of 2020 and sold it at the end of the year The maximum profit you can get is Rp 250,000.

This made gold the commodity with the highest price increase during that period. The increase in the price of this precious metal is higher than that of stocks. However, if we take a closer look, over the past 10 years, the price of this precious metal has not always increased.

What’s worse is Annual gold prices fell nearly 28% in 2013. For context, that year, world oil prices rose sharply. So it’s common for gold demand to drop and push prices down as well.

If the above data is shown in the graph Here is the gold price chart:

Figure 2: World Gold Price (Source: Macrotrends.net)
Figure 2: World Gold Prices (Source: Macrotrends.net)

From Figure 2 above, it appears that if the price of this precious metal is measured from 2012 to 2022, the change is really insignificant. which means If you bought 1 ounce of gold in 2012 and sold it in September 2022, the total profit you can make is 200 USD per ounce (2,100-1,900).

However, if you bought 1 ounce of gold in 2016 and sold it back in September 2022, you would make a profit of more than $1,000 per ounce, so the historical price movement of gold is calculated based on the year you used.

Nick Lioudis on Page Investopedia also show similar arguments. he said The average increase in gold prices between 1971-2019 was 10.6%..

during that time Gold prices rose more than 67% in 1974 and dropped sharply to -32% in 1981.

gold vs stocks

In his writing, Nick Lioudis also said that gold price developments tend to be volatile compared to stocks. He said:

  1. Between 1971 and 2020, the price of gold rose 5,600%, while the Dow rose 4,500%. If you bought jewelry in 1971 for Rp 100,000, your gold would now be worth Rp 5,600,000.
  2. Between 1999 and 2020, the price of gold rose 360%, while stocks entering the Dow Jones Index rose 991%. If you bought jewelry in 1999 for Rs 100,000, your gold is now worth Rs 360,000.
  3. Between 2005 and 2020, the price of gold rose 330%, while stocks entering the Dow Jones Index were up 153%. If you bought jewelry in 2005 for Rs 100,000, your gold is now worth Rs 330,000.
  4. Over the 2015-2020 period, stock price growth tends to be faster than gold. But if we look only at the price growth in 2020 and 2021, the rate of increase in gold prices will be higher due to the high level of uncertainty in the global economy.
Figure 3: Gold prices vs. stocks (Source: Investopedia)
Figure 3: Gold price versus stocks (Source: Investopedia)
Figure 3: DJIA share price (Source: Google)
Figure 3: DJIA share price (Source: Google)

Tips to Maximize Your Gold Investment Profits

From the discussion above, it can be concluded that the benefits of investing in gold are likely to be appropriate in the long to very long term (over 10 years – 40 years). overall economy So here are some tips for maximizing profits. gold investment.

1. Long term

Although the rate of increase is not as smooth and high as the stock. But gold has proven to be a long term (10+ years) investment tool which tends to be short-term or medium-term (1-10 years) prone to volatility, so you should not buy this tool. but only as a refuge in times of crisis but also the overall investment security network.

2. Look at the economic development

Rising oil prices, inflation, crises all directly or indirectly affect the price of gold. Fuel and inflation tend to reduce demand for gold as people want to buy more for their daily needs.

Gold tends to rise during the crisis. This is because many people consider this investment to be relatively safe compared to stocks. As a result, more people buy it and the price of gold in the short-term market increases.

You should develop your analysis by studying the impact of the above macroeconomic conditions by reading various studies. especially in Indonesia This is because there are times when the Indonesian commodities market moves in a different direction than the American and other commodities markets.

3. See the various assembly fees.

In the case of buying and selling gold in Indonesia There are several buying and selling methods that you can try. It started with buying and selling gold bars. decorations until in the form of Saving gold in a bank or a pawnshop. From physical delivery to ownership of digital-only gold

Each method has hidden costs, such as shipping costs if you buy real gold online. Fees for depositing and creating a gold savings account to the difference between the selling price and the buyback price. Consider such hidden costs to maximize your return on investment.

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