Gold Bullion vs. Stock – An Honest Comparison
Investors often compare between performance of buy gold bullions and stock. Though they belong to different asset class, primary aim of investing in both of them is reaping profit. According to some economic analysts, gold has better store value while stocks are enriched with better return value. But, this is not the full side of a highly volatile story called growth. Political stability is the major factor ensuring compounding growth of stocks and bonds. Stock market trembles when there is political instability. But, bullion market is less volatile in this regard. Its price remains more or less stable irrespective of political factors. To simplify, bullion market has better return on investment (ROI) over stocks and bonds even during political instability and turmoil.
Studies have found that return on stock is cyclic in nature. For long term and sustainable result, the investor has to maintain a diversified portfolio and should have the courage to face the lean period. A recent survey regarding preference of investors over stock in Google and investment in gold has proven the growing inclination towards gold bullion. During the survey period, both bond of Google and an ounce of gold had same market price. But, with in two months of survey gold price outpaced stock price by 30.77%. This indicates the superiority of gold and silver over stock market investment.
Demand is the vital factor deciding the price and return on any financial product. In this aspect, gold also outperforms stocks and bonds. Demand for stocks and bonds depend upon a number of factors including the concerned company’s current profit, future plans and anticipated growth rate. But, gold bullion demand is more or less steady. It means gold has the potential of offering steady return in both short term and long term. Gold has better liquid value compared to stocks and bonds. It can be immediately liquefied without help of any intermediary or broker. Investing in gold bullion has its own sets of limitation too. It is tangible in nature and prone to risks like theft. In this regard, stocks and bonds are less risky.