My thoughts on investing in gold

Hello everyone. This is Nobinobi Asset.
Last time, I talked about the “Rule of 72,” which helps in understanding compound interest.
This time, as promised, I will share my own thoughts on investing in “gold,” which has different reasons for price movements compared to stocks.

◆ Gold is an asset with a different nature than stocks or bonds

Most assets generate returns by “producing something,” such as corporate growth for stocks or interest income for bonds.
On the other hand, gold itself does not generate interest or dividends. The value of gold is determined solely by the balance of supply and demand, based on the belief that “everyone believes gold has value.”

◆ Why it is called a “safe asset”

Gold has a tendency to be bought as a safe haven when the stock market is in major turmoil or when geopolitical anxiety rises. It is also considered to have its value re-evaluated as a real asset during inflationary periods when prices are rising.
Since it tends to move differently from stocks, there is also the idea that incorporating a portion into your portfolio can enhance the effects of diversified investment.

◆ How to invest in gold

There are several ways for individuals to invest in gold.
Pure gold accumulation: A method of accumulating physical gold with a fixed amount every month.
Gold ETFs/Investment Trusts: A method that allows you to buy and sell in a securities account just like stocks.
Gold mining stocks: A method of investing in the stocks of companies that mine gold (this is affected by corporate management as well as gold prices).
In terms of compatibility with index investing, using ETFs or investment trusts to incorporate it just like other assets is an easy method to handle.

◆ In my case

When I first started investing, I was accumulating pure gold little by little.
However, I didn’t have the knowledge I have now at that time,
so I thought, “This isn’t really going up much,” and I quit.
Looking at the recent price increases, I feel frustrated, but perhaps that is just how investing goes, and
the foreign stock index I accumulated instead at that time has been doing its job properly, so I think it was fine.
It is often said that investing is like driving while looking in the rearview mirror, but based on that experience, I have no choice but to look forward.

◆ Finally

Gold is an asset held with the expectation of a “protective” role rather than an asset that grows. I hope you will use this as an example of the idea of mixing in an asset with a slightly different nature into a stock-centered portfolio. Next time, I will talk about my thoughts on the “FIRE” lifestyle.
Look forward to it!