FX.co ★ Five myths about buying gold and silver

Gold is not equivalent to fiat money

Some experts and market players believe that the yellow metal is less important than fiat currencies. Analysts tend to exaggerate the role of paper money compared to the «solar» metal, although history has proven the latter's effectiveness in saving capital. Gold is a long-term investment, therefore, when buying it, an investor needs to be patient and not count on an early profit.

Silver is inferior to gold and fiat currencies

The yellow metal remains the undisputed leader of the global financial market in any crisis. Some analysts consider silver to be an insufficiently profitable investment tool, so in this regard, most market players rely more on gold than on the «lunar» metal. However, experienced investors warn against such mistakes, emphasizing the importance of investing in silver along with gold in order to diversify an investment portfolio.

Precious metals are high-risk assets

Some financiers argue that investing in gold and silver carries significant risks. However, most market participants believe otherwise. This conclusion is confirmed by the long-term reliability of both metals, which proved to be the most suitable for the protection of capitals. Analysts consider the most effective diversification of the investment portfolio is the one in which investments are distributed between gold, silver and major currencies. Representatives of the precious metals market are in favor of a reasonable investment in precious metals: from 10% to 25% of the portfolio should be given for investments in Gold and Silver. It is worth noting that the yellow metal almost does not correlate with stocks and bonds, it rises in price when paper assets fall.

Cryptocurrencies are more valuable than gold

This statement is debatable and an unambiguous opinion regarding crypto assets may be formed in the near future. However, now many market players prefer to invest in bitcoin, calling it digital gold. According to a number of analysts, cryptocurrencies are not equal to the yellow metal and will not be able to replace it. Important for investors is the fact that gold is used by the leading central banks, and cryptocurrencies have just begun their march through the financial world. The low volatility of this market segment testifies in favor of the «solar» metal. Whereas the dynamics of bitcoin is characterized by high volatility. It should be noted that it makes no sense to oppose gold and bitcoin, since these are completely different financial instruments.

Rare coins are more valuable than investment coins

Precious metals market participants insist on exaggerating the value of rare coins, while investment coins remain a fairly reliable asset for long-term investments. However, some players in the precious metals market, in particular numismatists, sometimes deceive buyers, forcing them to pay huge premiums for supposedly «rare» or «collectible» coins. Such sellers may claim that such coins are «seizure-proof», but this is a myth. The truth is that expensive and not very liquid collectible products are not suitable for most investors. According to experts, the best choice is ordinary gold bars or popular bullion coins.