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“What are my returns on my gold savings-investment?”, “is it a low risk or high-risk asset?”

So you are deciding whether you should purchase gold as a savings investment; we’re glad you took the time to learn about what returns you can expect. To give you an answer, it’s important to firstly understand that high returns and high-risks come hand in hand; just as low-risk investments yield low returns.

Gold is considered a low-risk investment

What is a low-risk investment?

An example of a low-risk investment is opening a savings account at a bank. With most basic savings accounts, you earn extremely low returns (usually 0.1% per annum) but you can be assured that your money will always be safe. Gold falls into this risk-return category given its nature to hold its value as the cost of goods and services increases every year. What this means is that gold has shown to steadily increase with inflation. 

High-Risk

Assets such as equities are high risk, offering high returns at a lower guarantee

This means you can expect to earn higher returns in the form of capital gains and/or dividends. But like all high risk assets, there’s a good chance you might lose some or all of your money you initially invested. 

Gold is not a high risk asset because of its relatively stable performance in the market. Gold’s low volatility and steady increases will more likely offer you less returns compared to higher risk assets, but you can rest easy knowing it’s a much safer option to grow your money.

So does gold yield good returns?

All asset classes, other than cash, do not come with guarantees – they all have different risk/return profiles.

In a stable economy, gold can provide you with a safe, low-risk asset, as proven throughout history. In different circumstances, such as in times of financial crises and extreme market stress, gold has proven to outperform many other asset classes.

Why?

Gold has an excellent track record

Time speaks of gold’s value over the ages. When you look at the performance of gold over the last 30 years, you should be pleasantly surprised to find that gold has done remarkably well as an asset class compared to other high-risk investments.

Don’t just take our word for it – take a look at the historical gold price chart here and see for yourself why thousands of Malaysians are starting to save in gold.

 

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