Gold, Stocks, or Bitcoin Investing: Which to Go for?

GOLD
Gold has been a desirable asset for past centuries. Historically, it signified affluence and represented a legal means of exchange. In recent times, gold is considered stable and highly valuable and this is evidenced by its well established value. Investors see gold as one of the safest investments, because of its ability to promptly level-up and hit back its value even in an economic downturn
Some investors however contend the profitableness of gold in a modern economic setting. Some argue that gold is an ancient antique that no longer possesses the economic value of the past. The pertinent question to ask is if gold is a good investment for you in 2020…
Gold still sells and more investors turned the gold way in 2020 may be due to the fall of stocks and bonds. A recent statista report showed that the global demand for gold increased significantly this year especially when compared to recent years. To further establish this point, the World Gold Council in a report suggests that central banks and other international financial institutions account for almost 0ne-fifth of the world’s supply of gold. And in another report, central banks of various nations significantly increased their gold reserves recently. Nevertheless, like any other investment assets, gold has its associated risks.
Investing in Gold
There are various ways to acquire gold for the purposes of investment however, here are three broad and popular categories.
Physical Gold
Gold Stocks
Paper Gold
Physical Gold: Acquiring physical gold is one of the oldest forms of gold investment, it simply means you possess real gold and can see and touch it. This form of gold investment may be in the form of gold bullion also known as gold bars or gold coins. Usually, it is obtained and sold at a price similar to the actual price of gold. Although this physical gold investment method is popular and old, it also comes with the burden and risk of security, transportation, insurance or storage.
Gold Stocks: Another way to invest in gold is by purchasing gold mining stocks. Here, you're buying stock in a company that actually produces or mines gold. One of the benefits of acquiring shares in gold mining companies is that you can receive dividends, unlike any other form of gold investment. In this sort of investment, you will also have to contend with a possible bearish market.
Exchange-Traded Funds (Paper Gold): Exchange-traded funds and exchange-traded commodities are instruments that allow you to monitor the actual price of gold without physically possessing the commodity. These instruments allow for electronic trading of gold, which is cheaper. However, you will still be at risk of the failings and uncertainty of the financial system.
Pros of Gold investment
Hardly susceptible to Inflation:
Economic downturn and market instability rarely affects the valuation of gold. In fact, investors tend to acquire more gold in an economic crisis to save their money from the fangs of inflation. Many investors consider gold as a good protection when the economy burns up or the economy goes south.

Gold Conserves Wealth:
Gold is one of the oldest forms of investments, and over thousands of years, it has effectively conserved wealth. At every particular point in time, it represents and holds great value notwithstanding when it was acquired.
Investment Diversification:
One of the major points for gold is that it diversifies your portfolio and adds a different dimension to your investment. Gold is not associated with shares, stocks or real estate.
Gold Can be a Tangible Asset:
Unlike stocks and cryptocurrencies, Gold is tangible and can be helpful especially if you’re investing in physical gold. This makes it easier to know the true value of what you own without having to rely on too much speculation.
Cons of Gold Investment
Gold doesn’t Yield Dividends or Interest:
Acquiring and storing gold would not yield any interest or dividend like stocks, you only make money when you sell off the assets at a higher value than you got it.
Transactional and Investment cost can be high: This is true especially for physical gold. Storing and transporting gold assets would definitely attract additional expenses.
Minimal gain overtime:
Although gold has shown to be a great long-term investment especially in an unstable market, it however does not show significant gains even in a stable economy.

STOCKS
A stock is an investment that involves buying a part of a company and thus being a shareholder of that company and sharing its profits, often referred to as dividends.
Companies also sell shares to the general public as a means of raising capital for their business, and anyone who purchases the required minimum number of shares will become a shareholder of the company. This type of investment is also known as stock.
Over the years, the stock market has yielded lucrative returns for investors, however, it’s not always rosy down there. The markets also crash, giving investors the potential of both benefits and loss. The National Bureau of Economic Research in a report revealed that the 10% of the wealthiest Americans own 84% of the stock market. History has taught us that the stock market can be really profitable, hence its popularity. Another report furnished by the Liberated Stock Trader suggests that 52% of adults in the United states have money in the stock market.
Notwithstanding the good reports and perceived popularity of the stocks market, people still loose tons of money while investing in stocks. It has been asserted that 40% stock fell at least 70% since 1980 causing a catastrophic loss which many never recovered from.
Types of Stock Investment
There are basically two ways of investing in the stock market they are;
Stock Mutual Fund or Exchange Traded Fund
Stock mutual funds are a pool of various company shares that are part of a common portfolio. If you invest in a mutual fund, you automatically purchase bits of various companies in a specific investment. Many investors prefer the Stock Mutual Fund because it allows diversification to reduce the risk of the investor. Diversification, however, is subject to the challenge of considerable financial participation.
Individual Stock
This is essentially the purchasing of a single share or a few shares from a particular company. This kind of stock constitutes more risk because if the company whose securities have been purchased goes bankrupt or liquidated, the shareholders will share in the loss.
How You Profit from Stock Investment
When you invest in the stock market, you make profits basically in two ways;
Dividends: Companies that have issued shares pay dividends to shareholders for defined periods of time (usually paid quarterly). Payment of dividends depends, however, on whether the business has made any income over the period. It is also important you know that some companies do not pay dividends.
Selling Off: This essentially means waiting until the value of the stock you have bought rises and then selling off at a higher price. This is the most common way for stock investors to make a return on the investment.
Pros of Stock Investment
You can build wealth: A good stock investment can be a great way to grow massive wealth due to reasonably high annual gains return. But again, the condition precedent for good yields and ROI is buying the stocks of an economically viable and profitable company.
Keeps you ahead of inflation:
Over time, the stock market has averaged an annual gain rate higher than the inflation rate. Suggesting that you got to have a longer - term perspective. Holding your investment over a period of time.
Easy to invest:
With the advent in technology, buying stocks is not as technical and difficult as it used to be in the past. You can now buy them online; all you have to do is to set up an account with an online broker and in minutes you have your investment portfolio. You may also buy stocks through brokers or financial planners.
Sell off when you like:
The stock market has a good liquidity rate. This means that you can sell-off your stock investment at any time you wish. This is unlike investments such as real estate where you need to list and wait for a buyer.
Doesn’t require much knowledge:
Although it is highly recommended that you do some research and have good knowledge before investing in the stock market, you can however take advantage of the services of robo-advisors, stock-brokers and investment managers.
Cons of Stock Investment
Volatility of the Stock market
The stock market is notorious for being highly unstable and volatile, prices are always fluctuating and as such you could lose your money if you are not careful and attentive. It’s better not to regularly look at the price volatility or you just may enter panic mode. And there is no better way to lose your stock investments than to trade under panic.
Uncertainty:
Every investment comes with some level of uncertainty, but ‘uncertainty’ Is highly associated with stocks. You could lose all your investments if a company performs badly or there is an economic recession.
It requires patience:
Growing significant profit or wealth through stocks takes quite a long time. Sometimes, it could take decades to have significant yields from your stock investment. If you are looking to make quick money, then stocks may not be for you.
CRYPTOS IN A BIT (BITCOIN)
Cryptocurrencies have been a controversial topic since it became internationally recognized in 2009, with some investors challenging its feasibility and longevity. These reservations, while not yet well-founded, are understandable due to some uncertainties surrounding the global development and regulation of cryptocurrencies, but do not undermine the fact that cryptocurrency is becoming a more common and internationally appropriate investment choice with a market cap valued at $237.1 billion.
Cryptocurrency is an electronic-based means of exchange that utilizes encryption protocols (cryptography) to protect financial transactions and regulate the development of additional units.
Think of it as currency, but not in tangible form, but on the internet. It cannot be removed and retained physically, but it can be a beneficial instrument of trade in any transaction as long as it is accepted by the parties to the transaction.
There are currently over one thousand types of cryptocurrencies on the crypto market, however, bitcoin remains the pioneering and dominant one amongst them all. Hence its popularity.
Bitcoin Investing
Investing and profiting off bitcoin requires majorly the act of buying and selling. You make a purchase when the monetary value is low or is anticipated to increase, and then resell the coin when the value goes up. You may hold it in the long-term or short-term. The volatility of bitcoin allows for steady transactions. Over the past six years, the price of Bitcoin has soared and from $333.60 on November 3, 2014, to a peak value of approximately $20,000 on December 17, 2017. There have also been numerous dips in prices in the same period.
Pros of Bitcoin Investing
Good Liquidity:
The increasing adoption of bitcoin has made it a popular demand and a veritable medium of exchange. Bitcoin is currently one of the most liquid investment assets. With very low fees, you can easily exchange Bitcoin for money or commodities like gold etc. The high liquidity associated with bitcoin allows for short-term gains.
Less complicated transactions:
Bitcoin transactions require the same process and same transaction fees notwithstanding the locations of the transacting parties. This is unlike normal money transfers that usually have higher processing fees and sometimes stringent requirements especially with cross-border transactions.
Privacy:
The crypto-technology used in bitcoin enables users to fully isolate their Bitcoin accounts from their public or known personality if they want to do so. It is almost impossible to find out who the users of bitcoin are.
Independence
Bitcoin is not developed or regulated by any state body, such as a central bank, or body corporate, it has no political power. Since it operates beyond any political framework, it is also much harder for governments to freeze, seize or maliciously regulate bitcoin units.
Increasing Acceptability:
The growing acceptability of bitcoin both for personal use and in commercial transactions has increased the growing confidence in its appropriateness.
Cons of Bitcoin Investing
Wildly volatile:
The bitcoin market is highly susceptible to wild and rapid fluctuations, making it difficult to maintain a decent investment. Although bitcoin's volatility often provides short-term benefits to speculative traders, it makes the currency undesirable for more cautious long-term investors.
Susceptible to online hacking and theft
Bitcoin transactions usually occur via the internet using a mobile app or a website, this makes you vulnerable to cybercriminals and hacking.
Limited to no regulations:
In the bitcoin world, you are on your own as there exist very minimal regulations to protect your investments. This could result in fraudulent and unethical practices by other investors and thieves. If you want to invest in bitcoin, you’d have to rely on the safety of the system and you to safeguard your investment.
Restricted use:
The use of bitcoin as a means of exchange is still very restricted and limited, as only a few online traders have approved its acceptability.

Choosing between Bitcoin Investing or Gold and Stocks
No legitimate investment (gold, stocks or bitcoin etc.) is a get-rich-quick scheme, and all of these investments come with their attendant risks. In deciding, you should understand the benefits and risk of your potential investment options, and choose what best suits your needs or wants. That said, if you’re willing to see what the cryptocurrency world holds in store, then now is a good time to invest in crypto.Our next blog post on how and when to start Bitcoin investing