With the rage of COVID taking over the world, the markets have fumbled all over the world. There are no clear of settling at the moment, and with the prospects of investments getting bleak, the only thing you can rely on is Gold and other precious metals. They have become quite an attractive prospect for investors, which comes as good news for the gold mining companies. If you are on the lookout for some options that will give you a sure shot return in uncertain times, you may want to invest in gold mining companies.
Why should you invest in Gold?
If we consider Gold's nature, it is a hard metal that will perform better when there is a slow economic and market growth. Even if the market is highly volatile, gold investors are safer with their investment. It has no connection with the falling economy or the weakening currencies as people can liquidate this hard metal anytime for cash exchange in case of an emergency. Several other factors that tend to impact Gold favorably remain in place, including easing monetary policies, fiscal stimulus, low to negative rates, and lackluster economic growth.
It has something to do with the previous sky-high profits that the gold mining companies made last year. Even if there is a considerable fall in the market right now, people are not worried as the gold prices will comparatively be in a calm state than last year. If we look at the growth for the past five years for the investors in the gold mining companies, there has been a considerable rise in the number of investors giving a high return on the investment to them.
Combination of gold and mining investment
It seems like the only favorable option at present. The experts suggest that 'the defensive characteristics of gold blend well with the upside optionality of the gold equities.' Despite popular thinking, the two have a shallow connection in the market of investment. So, if you are heading to divide and conquer the market, making a sound investment in the gold equities and companies that are in gold mining seems like a great idea for portfolio diversification. However, this diversification will only bear you profitable results if you are on the lookout for long term investment. It is not a market for short-term investors looking for quick in and out money from the market presently.
Until there is conclusive research on the conditions of the virus in the market, there will be a lot of volatile mobility. You will need to have patience if you invest in the hard metals or any related precious metal portfolio. In short, the experts suggest that 'For investors who allocate 10%-20% of their portfolio to alternatives as they pursue diversification and non-correlated return streams, we believe a position in gold and precious metals equities should represent a component of that allocation.'