What do you know about investing between stocks or gold? If you still feel so green in this world, then you have to look at the advantages of two investment instruments. Which one will you choose later?
When it comes to investing, most Indonesians tend to be conservative and will not choose something that is high risk. Therefore, most of them are more interested in investing in precious metals, such as gold.
Meanwhile, those who are able to see opportunities in a big risk will invest in the capital market, namely stocks. Both of these investments are arguably quite popular among the public. However, both of them offer mixed profits.
Stock investment is generally classified as equity, which means that the shareholders are part of the company that issued the shares. Meanwhile, gold or precious metal is categorized as a commodity investor who physically owns gold for his investment.
Before discussing stocks and gold one by one, it’s a good idea to know the differences between these two investment instruments.
Form of Investment
Gold is a form of investment that can be seen and touched. Meanwhile, the investment shares are in the form of a certificate which states that you are part owner of the company.
However, if the company goes bankrupt or goes out of business, then the certificate has no value. In contrast to gold whose value tends to survive in the future.
Because stocks represent the ownership of investors in a company, the company will strive to create products and services that can provide value to many people. Therefore, it can be said that stock investment is an active business because the profits are influenced by the company’s performance.
Meanwhile, gold is more reactive, so that no effort will increase its value. Gold price movements are highly dependent on market conditions and the economy as a whole.
Cash Flow or Income
When you buy shares of a company, then you will receive the results in the form of dividends that the company distributes depending on the profits the company gets. In addition, you also receive benefits in the form of capital gains when the share price is higher than before.
How about gold? To be sure, you will not get any income until the gold is sold. Gold owners will also incur additional costs, such as administrative costs, physical printing costs, to rent storage space.
Diversification Is an Art of Investing
In the long term, investing in the stock market may be able to provide the best returns for various purposes. Meanwhile, gold provides more protection value for your wealth or investment in order to secure your property.
Investing in the stock market is an attractive option for aggressive investors. However, if you are afraid of investment risks, start with investing in gold. Investing is a game in managing a portfolio so that the investment products you have can provide large returns.
This is where you need to diversify so that if there is one investment that loses money, it can be covered with the gain from other investments.
That was an explanation of the advantages between stocks and gold that you can consider choosing.