Amid uncertain economic conditions and rising geopolitical risks, gold is once again attracting attention among investors.
Long known as “gold for times of crisis,” it has reigned supreme as a safe-haven asset.
Why is it trusted to such an extent and included in investment portfolios?
In this article, we’ll explain the rationale behind gold’s status as a safe-haven asset, its pros and cons, and even recommended investment strategies for beginners.
1. Why Is Gold Considered a “Safe-Haven Asset”? Three Key Reasons
The key factor that sets gold apart from other assets—such as stocks, bonds, and fiat currencies—is its “universal value.”
- Scarcity as a Tangible Asset
The total amount of gold on Earth is limited; it is said that the amount mined to date is roughly equivalent to about four Olympic-sized swimming pools.
Since it cannot be artificially produced, it is unlikely to experience a sharp drop in value due to oversupply. - Credibility as a “Stateless Currency”
Fiat currencies like the yen or the dollar carry the risk of becoming worthless (counterparty risk) due to the issuing country’s economic collapse or loss of credibility.
However, because gold has intrinsic value, it is not dependent on any specific country and can be exchanged for cash anywhere in the world. - Strong Resistance to Inflation
During periods of “inflation,” when prices rise and the value of money declines, the price of gold—being a physical asset—tends to rise.
It functions as a “hedge” to maintain the purchasing power of assets.
2. The Benefits and Risks of Investing in Gold
When investing, it is important to understand not only the advantages but also the unique characteristics of the asset.
Benefits
Generally, gold tends to be bought when the stock market crashes. By including it in a diversified portfolio, it acts as a “cushion” that helps limit losses across the entire portfolio.
Even when viewed over decades or centuries, its value has never dropped to zero, making it suitable for long-term holding.
Drawbacks and Risks
- No Interest or Dividends
There are absolutely no “income gains,” such as stock dividends or interest on deposits.
Profits consist solely of “capital gains” resulting from price fluctuations. - Impact of Exchange Rates
The international price of gold is determined in U.S. dollars.
When purchasing in Japan, a strong yen carries “exchange rate risk,” as the yen-denominated price will decline. - Storage Costs
When holding physical gold (bullion or coins), you face the risk of theft and incur storage costs for safekeeping.
3. [For Beginners] Main Types of Gold Investments
Nowadays, there are plenty of ways to invest in gold starting with small amounts, even without owning physical gold.
| Investment Strategies | Features | Who This Is For |
| Pure Gold Savings Plan | Buy a little bit each month, starting from a few thousand yen | Beginners who want to steadily build their assets |
| Gold ETF (Exchange-Traded Fund) | Buy and sell in real time, just like stocks, through your brokerage account | People who want to operate their business cost-effectively and efficiently |
| Gold Coins and Bullion | Keep the physical item on hand | People who value a sense of ownership and hold onto their investments for the long term |
| Gold mining stocks | Investing in gold mining company stock | People looking to make a big profit from price fluctuations |
4. When to Add Gold to Your Portfolio
Gold is not an asset to invest all your capital in; the standard approach is to use it strictly as a “guardian of your assets.”
Generally, it is considered ideal to allocate approximately 5% to 10% of your total assets to gold.
The key to minimizing risk is to use a dollar-cost averaging strategy—gradually increasing your holdings during economic booms when stock prices are high—to prepare for recessions and periods of turmoil.
Summary: A Partner in Uncertain Times
As a “safe-haven asset,” gold is not merely a tool for making money; it is “insurance” designed to protect your valuable assets from inflation and economic crises.
Why not start with a small amount of physical gold or an ETF and aim to build a solid asset base that can withstand the turbulent waves of the times?
