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Should You Invest In Gold?

Published 07 Jul 2020

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By Fi Life Team
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Should you invest in gold?

 

On its own? Probably not.

But as part of a diversification of your assets classes you invest in, probably yes.

Let’s recap the asset classes that you should spread your investments over:
  • Cash/fixed deposits/money-market funds, covering at least 6 months of expenses
  • Property
  • Fixed income/bonds
  • Equities
  • Commodity/precious metals…..like gold

Why is gold considered an important asset class?

  • It is a “crisis commodity”. During times of crisis, when most other assets start to suffer downward pressure, the price of gold usually goes upwards. This “negative correlation” makes it an ideal balance to other investments
  • It is a reasonable store of value to guard against inflation or a depreciating currency

What are the downsides to investing in gold

  • Unlike most of the other asset classes above, gold is not an income-producing asset. Your returns are determined solely by the market price of gold
  • Like everything else, gold prices can go up as well as down

How do I invest in gold?

  • You can buy gold exchange traded funds (ETFs) designed to track the price of gold. Although the largest gold ETFs (e.g. iShares Gold Trust, SPDR Gold Shares) are listed overseas, you can buy Tradeplus Shariah Gold Tracker on Bursa Malaysia
  • You can also buy physical gold closer to home, like the Kijang Emas gold coin from Maybank. But you’ll have to figure out how to store it safely, or hire a bank safe deposit box from a bank to store them (but you will incur safekeeping fees)
  • Alternatively, you can invest in gold through HelloGold, a Shariah compliant mobile application which enables you to buy and sell 99.99% investment-grade gold in denominations as small as RM1. HelloGold is backed up by actual physical gold bullion stored at the vaults of BullionStar International. And if you’re pro-user you can actually ask for the physical gold that you own to be delivered to you, anytime

Should you want to learn more about investing in gold, look our for our BFM Ringgit & Sense Webinar featuring Rajen Devadason of RDWealthCreations and Robin Lee of HelloGold, moderated by Wong Shou Ning of BFM and our founder, Malek Ali. In the meantime, you can learn more about gold as an asset from Robin Lee (CEO & Co-Founder of HelloGold) here.

Sign up for a HelloGold account today and use the code: HELLOFI to get RM10 in gold when you save a minimum of RM100.

This promotion is valid from 6th of July to 2nd of August 2020 for first time users only. Terms & Conditions apply.