Gold as an investment has little to no counterparty risks compared to other investments. This means if you have physical gold coins or gold bars you don’t have to depend on another person performing certain duties for the investment to remain sound. On the other hand investments like stocks will inherently have a higher counterparty risk. Some of the things that can add to the counterparty risks associated with stocks are the managers of the company not doing a competent job; the shares of stocks in the company being diluted; or dubious accounting giving false sense of profitability.

Some of the things that can add to the counterparty risks associated with real estate are, the property taxes rising too fast, the cost of maintaining the property increasing, fires and natural disasters, (if you have your gold in a fire proof safe that is bolted down to the foundation of your property, your physical gold will usually be safe from most fires and natural disasters.) or governmental laws changing making it easier to take away property. (In the past governments did pass laws to confiscate gold, but gold coins and gold bars are easier assets to conceal and is also harder to confiscate than real estate.)

Some of the things that can add to the counterparty risks associated with holding fiat currency are, the government defaulting on its debt obligations, the central banks that issued the currency inflating the currency, or the people of the nation or other nations refusing to accept the currency as a medium of exchange. (Some may say; well couldn’t people refuse to accept gold as a medium of exchange? The answer is yes, but gold has a six thousand year track record, compare that to fiat currency that always becomes worthless in less than one hundred years; no exceptions.) Physical gold because of its low to no counterparty risks; makes it one of the safest and soundest investments out there.