Gold vs. Bonds and Stocks: Why Some Investors Choose Gold

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Despite its reputation as the king of precious metals, during good economic times, gold is not often thought of as an investment.

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This is because, unlikeHowever during bad economic times, like periods of depression, many investors tend to use gold as a reliable store of value asset. This is because its value is intrinsic and not dependent on someone else’s promise to you. Bonds, on the other hand, like US treasuries, are debt instruments. Basically, you lend money to a borrower like the US Government . They will return your money and give you an annual yield on top of that. So if you just want to preserve your capital, many people, companies and fund managers buy bonds so they earn interest on their capital and then get back their money when the bonds mature.That is great. Except now we are in an environment where there is a lot of uncertainty.

 

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