During the Spring Festival, when people visit relatives and friends, it is inevitable to discuss financial investments during conversations. Unlike in previous years, the topics of discussion have changed significantly this year. In the past, people liked to talk about buying houses, trading stocks, and purchasing funds, but these topics are not as popular this year. Without a doubt, the hottest topics this year are buying gold or prepaying loans, which have become the two most common conservative choices for many ordinary investors.

Upon careful analysis, there is some rationale behind these two choices, but there are also some points that require attention.

01

Recently, the price of gold has increased to a certain extent, but this does not seem to affect its sales volume. Due to the increased demand for gold products in the market, domestic gold buyers have been busy purchasing large quantities of gold.

The current average price of gold is not low. The average price for investment gold is around 487 yuan per gram, while the average price for jewelry gold is about 540 yuan per gram. However, the sales volume for both remains very strong.

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The higher price of jewelry gold is related to the continuous increase in demand and also to the fact that the cost of jewelry gold is higher than that of investment gold. However, it is important to note that from the perspective of future investment liquidation, gold jewelry is not the best choice because there is a significant discount when reselling gold jewelry.

Another point that requires even more attention is the fluctuation in gold prices.In the last two trading days of last week, the international gold price suddenly plummeted significantly.

The price rose to $1,975 during Thursday's trading, but by Friday's close, it had fallen below $1,900, reaching a low of $1,874.5.

Although there was a slight rebound today, it still failed to return to $1,900. After the Federal Reserve's interest rate hike, it cannot be ruled out that the gold price will continue to decline.

The fluctuation of gold prices is a significant factor affecting investments, and everyone must fully consider future trends when managing their finances.

However, regardless, gold has the characteristic of preserving value, making it suitable for long-term holding rather than frequent buying and selling.

Even central banks are storing large amounts of gold to meet the need for risk avoidance.

Data shows that the total amount of gold purchased by central banks last year set a new historical record, and the scale of gold purchases is increasing. In just the fourth quarter, they bought as much as 417 tons, an increase of 18 tons compared to the third quarter.

With central banks also buying up gold, it's no wonder that ordinary families consider gold as a stable investment.

02

In addition, many people are also considering the method of repaying loans in advance.In fact, investing and managing finances is not just about how much profit one can make, but also about reducing existing risks and future expenditures.

If you currently have a sum of money and use it to purchase certain investment products, earning profits in the future is certainly a good thing. However, if a loss occurs, you might not even be able to preserve your principal.

In such a situation, if you use this money to repay a mortgage that had an interest rate of 5% or even 6% in the past, it is equivalent to reducing a significant amount of loan interest. This is actually a decent way of managing finances as well.

However, there are a few points to consider regarding early mortgage repayments.

Firstly, the newer the mortgage, the more worthwhile it is to repay; the older the mortgage, the less worthwhile it is to repay.

For example, if you applied for a 15-year mortgage and have already repaid it for 10 years, leaving only 5 years remaining, regardless of the remaining balance, it is not very worthwhile to repay it.

This is because in the early monthly repayments, the interest made up the majority of the payment. In other words, most of the interest has already been repaid, and what you are repaying early now is the principal, which doesn't make much sense and won't save us much in interest expenses.

Secondly, if the mortgage interest rate is relatively low, it may not be necessary to repay it early.

In recent years, many people who bought houses have interest rates of 5.5% or even higher, but it is also possible that some people enjoyed certain discounts in previous years or used housing provident fund loans, which have relatively lower mortgage interest rates. In such cases, one should carefully consider whether to repay the mortgage early.

Regardless, the most important thing is to analyze first whether there are truly no more suitable investment options available, as appropriate investing is often more important than repaying the loan as soon as possible.