Before you invest in a niche, you need to know it inside and out. That’s advice that Warren Buffet always tells his listeners. Since he’s the best investor that the world has ever seen, then there must be a lot of truth in that statement.
Even though he was not bullish on precious metals when he was younger, he has changed his opinion on the entire niche. That’s why he became the largest buyer of silver in the world. If the best investor in the world is buying into precious metals, then what should the average person do?
One of the choices is to mimic the decisions that the big players are making. No one wants to lose money. What’s even more, no one wants to lose a lot of money. That’s why experienced and wealthy investors do their research and consume a lot of material before making a choice.
It’s been stated that Buffet reads anywhere between five and six hours a day. That’s a lot of time devoted to making a few decisions per year. Here are some of the reasons why you should be the type of person who invests in gold, silver, and other precious metals. Click on this link to read more.
Reasons to invest
There are a lot of reasons to buy gold. Some people do it to protect themselves from inflation. There are experts in the niche that claim that it’s a popular misconception to believe that precious metals can outperform inflation.
That’s why the data is there to speak facts. Whenever there was a paper currency crash, there was gold to carry the financial world on its back. It’s one of the most secure types of investments, mostly because it spans as a cultural tradition.
Countries like India, for example, place a lot of value on gold. They’re the biggest users and buyers of these precious metals, mostly as jewelry but also as a hedge against uncertainty. The final investor profile buys gold due to the fact that they assume it’s going to climb in value. No matter the rationale, the underlying assumption is that it’s a valuable asset to hold, and it’s going to be worth even more in the future.
How much gold do we have?
There are less than 200 000 tons of gold that have been excavated from the ground. That might seem like a lot at first, but it’s not that much when you put it into perspective. You can go to https://www.metal-res.com/gold-ira/who-invests-gold/ to read more. If all of it got melted and we created a big cube, it could easily be placed in the middle of a baseball field.
The resulting product would be less than a hundred feet on each side. Even though that cube would appear small, the worth in dollars would be around 10 trillion dollars. Another interesting fact is that the United States is indebted so much that all the gold in the world can’t save it from debt.
The money that the United States needs to give back is approximately 29 trillion dollars. That doesn’t look good for the economy, but there’s a way you can make use of it.
Who is the largest investor?
It might not come as a surprise to you to find out that the biggest gold owner in the world is the United States. There are more than 8 000 tons of gold hidden in reserves and vaults all across the country. Even though that seems like a lot, that’s only 5 percent of the reserves of the entire world.
Even so, it’s still more than the next three countries on the list of owners, which include France, Italy, and Germany. Apart from governments, there’s also the International Monetary fund, which is on par with Italy and Germany.
The culture that uses the most gold
Even though the biggest investors involve governments and related institutions, the people are still the ones who hold the most power. Every year, thousands of tons are used in business. Americans like the shine of the yellow metal, but no one can compare it to the buying power of India when it comes to precious metals.
The biggest reason for that is weddings and Diwali, which is a religious festival that gets celebrated by more than 80 percent of the population that lives there. It’s a festival where you get to display your riches, and gold is the biggest indicator of that.
That’s why most families that live there spend around 10 percent of their income on buying gold. That’s a strategy that plenty of people around the world should use too. That’s a great percentage to have on your portfolio, which will save you when times are rough.
The two types of people
There are two types of investors when it comes to dealing with precious metals. The first ones are the people who hold it as a store of value and plan to stockpile for decades, only to cash out when it’s time to retire.
The second group of people is the ones who speculate on prices and try to trade them. Countries with large reserves, such as Germany and the United States, tend to keep it in their possession longer. It works as a safety net against inflation, the stock market, and currency manipulations.
Traders are people who watch the news every day and plan to capitalize on the short-term volatility of the market. They enter swiftly and leave as soon as they’ve made a solid profit.