Gold bars and coins myths busted: What to know now

Gold has been a popular investment over the past year, and for good reason. It's a tangible asset that holds its value well, even when the economy is shaky. It can diversify your portfolio and provide much-needed protection when other assets falter. And there are plenty of ways to invest in it.

One of the most popular of these is by purchasing physical gold in the form of bars and coins. It's a simple, straightforward process that can provide you with plenty of benefits. However, there are some common misconceptions that can derail investors' decisions. To make the most informed choice for your investment goals, it's important to be aware of these misconceptions and the truth behind them.

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Gold bars and coins myths busted: What to know now

Don't let these myths discourage you from investing in gold bars and coins.

Myth #1: Gold is a risky investment

While gold prices can be volatile in the short term, gold bars and coins are widely considered safe-haven investments. Gold has a long track record of outperforming other asset classes during economic uncertainty, hedging against inflation and shielding investors' portfolios from losses. This makes it much less risky than assets like stocks, which can lose value overnight with little to no warning.

Myth #2: Gold is outdated

Gold has been around for centuries, used by ancient civilizations as everything from currency to jewelry. This rich history may make it seem old-fashioned, but it's far from obsolete. In fact, it's precisely this longevity that makes gold such a smart investment.

Over hundreds of years, gold has retained its value despite market fluctuations and economic turbulence. The same can't be said for assets like paper currency, which can easily be devalued, or cryptocurrency, which could still prove to be a flash in the pan. If you want to add stability to your portfolio, gold is a great way to do so.

Myth #3: You must be wealthy to invest in gold

The cost of gold bars and coins varies depending on factors such as weight, purity and seller. But overall, minimum investment costs have decreased over time, making it possible for anyone to buy gold with a relatively small amount of money. With a wide range of sizes, coin styles and gold retailers to choose from, you can easily find a product that fits your investment budget.

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Myth #4: Only collectors buy gold coins

While many people collect gold coins for their historical significance or sentimental value, they're also a popular choice among serious investors. Many gold coins are valued above the spot price of gold due to their rarity, history and craftsmanship, and thanks to their small size, they're often easier to store than gold bars.

Myth #5: Gold bars and coins don't pay returns

The flip side of gold's reliability is that it doesn't yield as high a return as more volatile assets like stocks. That said, these assets are just as likely to plummet in value as they are to soar. By contrast, gold has historically held and increased in value over time, weathering economic storms that can decimate other assets.

Its returns may be more modest, but they're also steadier, which can make it a solid long-term investment to preserve your wealth.

Myth #6: Gold bars and coins are hard to sell

Gold bars and coins are globally accepted as a currency and are always in demand, which makes them highly liquid assets. Investors can sell their gold quickly and easily through a variety of channels, including online marketplaces, bullion dealers, auctions and pawnshops. Of course, it's crucial to research potential buyers and platforms before selling, but the same goes for any item you want to sell.

The bottom line

As with any financial product, it's crucial to understand any asset you're thinking of investing in. Take the time to do your research, know the pros and cons and consider how gold bars and coins fit into your investment strategy. Physical gold can be a valuable part of a well-balanced portfolio if you're able to separate fact from fiction.