- What are the advantages and disadvantages of buying dollars?
- What are the advantages and disadvantages of buying digital currency?
- What are the advantages and disadvantages of buying gold?
- Should we buy digital currency or gold?
- Should we buy dollars or digital currency?
- Should we buy gold or dollars?
Factors affecting the fluctuation of the price of dollar, digital currency and gold
Buying and selling dollars, digital currency and gold are popular areas of investment among people all over the world in the contemporary era. The price of dollar, digital currency and gold is affected by many political, economic and social factors in the world. For example, in recent years, due to the epidemic of the corona virus and its negative impact on the global financial markets, many businesses faced a recession.
This caused many investment methods that have always been profitable in the past to fluctuate today and face double investment risk. This made people review the existing investment methods and examine the advantages and disadvantages of each of them. In the following, we examine the advantages and disadvantages of investing in the three areas of dollars, gold and digital currency.
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Benefits of investing in gold
From the past to the present, gold has always been one of the most popular investment sources among people. In the past, buying gold was done only in the form of coins and physical gold, but today, in addition to buying coins and physical gold, you can also buy gold coin deposit certificates and gold investment funds.
Ease of buying gold
To buy physical gold and coins, just go to a gold shop and buy the gold you want at the current price. As you can see, in this method, you do not need to register on a special site or acquire special knowledge and expertise, and you can buy or sell gold only by knowing the daily price of gold. Therefore, buying physical gold is one of the easiest investment methods.
High liquidity of gold
In the topic of investing with little money, we mentioned that liquidity is one of the important pillars of investment. Buying physical gold is one of the methods that has high liquidity and is very suitable for investors who cannot ignore their capital in the long term; Because these people can sell their gold whenever they need their money.
◊ Also read this article: How to calculate the gold coin price bubble?
High profitability of gold
Since the price of gold in the global markets has a positive trend and grows every year, buying physical gold in the long-term horizon can bring good profits to investors. Therefore, after a period of time, gold buyers can see a significant return on their investment.
High security of coin deposit certificate
One of the ways to buy gold is to buy a gold coin deposit certificate. By purchasing a gold coin deposit certificate, you become the owner of a certain number of coins, but the advantage of this method is that the risks of theft, loss, and damage that exist with physical coins and gold are completely eliminated in this method.
Low fees in the gold fund
Gold-backed investment fund is another way to buy gold. Among the advantages of this method is the low fund fee compared to buying physical gold. Among these funds, we can mention the Kian Gold Investment Fund.
Guarantee of the central bank from the gold fund
Since the activity of all investment funds in Iran requires obtaining a license and having the guarantee of the central bank, therefore, by buying shares of the gold fund, investors are safe from common frauds in other methods, and buying gold in this way is considered a safe method. .
The possibility of investing with little money
The possibility of investing with little money, including the benefits of buying gold through a gold-backed investment fund, is that you don’t need to pay the amount of a whole coin, but you can also buy the units of this fund with small amounts of money and earn profit.
Disadvantages of investing in gold
Difficult to maintain
Among the disadvantages of buying physical gold is the difficulty in maintaining it. Because, as you know, gold, like any other valuable object, faces the risk of theft and loss.
Impact of global factors
The price of gold is determined globally and since this price is affected by various factors and various political, economic and social news, gold buyers should wait for the fluctuation of the gold price due to the occurrence of various events around the world, which can be one of the disadvantages. Consider investing in gold.
Buying gold is considered a long-term investment, and this investment method is suitable for people who have a long-term time horizon in investing. Because although the gold market is profitable in the long term, it faces a lot of risk in the short term.
Low liquidity of the gold fund
One of the rules governing the funds is that after registering a sell order, it takes two days for the money to be deposited into the person’s account. This indicates the relatively low liquidity of the gold fund. But considering the advantages of this method and considering two days as not a long time, the risk of liquidity cannot be considered as a big and fundamental problem of the gold fund.
Advantages of buying digital currency
Fast and easy transaction
Although buying digital currencies may seem complicated, it is actually a very quick and easy process, and you can even sell a large number of digital currencies quickly.
The most important feature of digital currencies is its high security against hackers and governmental and non-governmental institutions. The protocol used in digital currencies is so complex that it cannot be tampered with, controlled or hacked.
The price fluctuation of digital currencies is unlimited and this has made digital currencies a tempting opportunity for investment. The profit that investors have made from buying and selling Bitcoin, Dogecoin, Litecoin, Ethereum, Ripple and other cryptocurrencies in the last one year is so amazing that no other financial market can even match it.
Disadvantages of buying digital currency
Lack of transparency
The encrypted nature of digital currencies allows the identity of market participants to remain hidden. Some independent sources consider this market to lack clear rules and state that this market is the basis for black, criminal and money laundering transactions. Governments do not have a positive approach to the lack of clarity in the rules and regulations of the digital currency market. Tax evasion is the least concern of governments regarding transactions and capital attracted to the digital currency market.
In the previous part, we mentioned the unlimited volatility as one of the unsolicited advantages of digital currencies. But note that this unlimited swing is like a double-edged sword; Because as much as unlimited volatility can be profitable for professional traders, it is also disadvantageous for amateur traders.
Advantages of buying dollars
Buying dollars for investment has the advantage that its liquidity is very high and buyers, whenever they want, can go to the exchange and sell their dollars and receive Rials.
Another advantage of buying dollars is that you have your capital in cash and physical form, and you don’t need to go to a special institution to access it.
Disadvantages of buying dollars
The dollar is considered a physical commodity and buying it brings the difficulties of taking care against risks such as the risk of being lost, damaged, stolen, etc. for the buyers.
Affected by global factors
One of the disadvantages of investing in the dollar is its influence from political and economic factors around the world. Therefore, if you buy dollars, you have to constantly wait for the impact of many unforeseen factors on its price.
Should we buy digital currency or gold?
If we want to choose one for investment between gold and digital currency, we must check the advantages and disadvantages of buying each one. Although gold buyers can be confident of making a profit, they should have a long-term investment perspective. Although digital currencies are very profitable in the short term, they are associated with a very high risk.
Should we buy gold or dollars?
Calculating the price of gold in Iran depends on two factors: the global gold price and the dollar-to-rial parity price. Therefore, by buying gold in the long term, the price of global gold and the dollar will increase and good profits will be given to gold buyers. But buying dollars brings with it problems, among these problems, we can mention the entry of dealers into the market and the drop in the price of the dollar.
Should we buy dollars or digital currency?
In our country, due to inflation and economic conditions, buying dollars and euros is mostly considered profitable, but buying digital currencies is much more profitable for investors. The important point in choosing these two is the level of risk tolerance of people. Because buying digital currencies is associated with a much higher risk than buying currency.
Buying dollars, digital currency and gold are among the popular areas of investment in recent years. All three of these assets are globally valued and the economic, cultural, social and political events of the countries of the world lead to the fluctuations of these markets.
Knowing the advantages and disadvantages of buying dollars, digital currency and gold will help you to choose the right area when deciding to invest in each of these markets, taking into account your risk tolerance, investment horizon and the amount of your capital. do.