Stock Market or Gold? Which One Should Investors Prefer?
One of the most important questions for those who want to invest is whether to choose the stock market or gold. There is no clear answer to this question because both investment vehicles have advantages and disadvantages. In this article, we will try to help investors choose which one to choose by comparing the features, risks and returns of stock market and gold investment.
Stock market investment is a market where securities such as stocks, bonds, bills and funds are bought and sold. The advantages of stock market investing include:
- A lot of capital is not needed to invest in the stock market. Various investment vehicles can be owned even with small amounts.
- It is possible to obtain high returns in the stock market. Investing in the stock market, especially with a long-term and correct strategy, can provide a gain above inflation.
- Investing in the stock market offers tax advantages. Profits from stock trading are subject to 0% withholding. Income from certain securities traded on the stock exchange may also be exempt from taxation.
The disadvantages of stock market investment are:
- Investing in the stock market is high risk. Prices in the stock market are determined by supply and demand and are affected by many factors such as market conditions, political and economic developments, and company performances. For this reason, prices in the stock market may change instantly and unexpected losses may occur.
- Investing in the stock market is psychologically challenging. To be successful in the stock market, it is necessary to have skills such as patience, discipline, research and analysis. It is also important to avoid making emotional decisions in the stock market and not to panic.
Investing in gold means owning gold, either physically or non-physically. The advantages of investing in gold are:
- Gold investment is a safe haven. Gold is a commodity that historically maintains its value and whose demand increases in times of crisis. Therefore, gold investment provides a protection against negative situations such as inflation, devaluation and war.
- Investing in gold is easy. No brokerage house or market is needed to invest in gold. You can have gold by buying physical gold or opening a gold account in banks.
- Gold investment is a universal currency. Gold is an asset that is accepted all over the world and can be easily converted into cash.