Many people have their own reasons to invest in gold, for many, Investing in Gold is about preserving and protecting their wealth.
Around £200 would have bought you 28 Grams of gold towards the end of 1990. If you had bought 28 Grams of gold and kept £200 as cash, the gold would now be worth around 650% more, Meaning it would now be worth £1500. However, the cash would not have increased in value and, due to inflation, would actually be worth less. Similarly, many choose gold to protect the rest of their portfolio from risk and to add diversity to their portfolio.
Only a few people would choose to invest all the money they have into gold as its always advisable to create a balanced portfolio containing different types of investments Many investors choose gold for that very reason, allowing them to diversify into different areas. This is said to be because the price of gold is usually negatively correlated to the stock markets; gold often arises when other markets fall. This is why, traditionally, gold is seen as a ‘safe-haven’ investment.
