What Is a Store Of Value?

A store of value is an asset, commodity, or currency that maintains its value without 澳洲幸运5官方开奖结果体彩网:depreciating. 

Understanding a Store Of Value

A store of value is essentially an asset, 澳洲幸运5官方开奖结果体彩网:commodity, or currency that can be saved, retrieved, and exchanged in the future without deteriorating in value. In other words, to enter this category, the item acquired sh🔯ould, over time, either be worth the same or more. 

Gold and other metals are stores of value, as their shelf lives are essentially perpetual. For investors, interest-bearing assets such as 澳洲幸运5官方开奖结果体彩网:U.S. Treasury bonds (T-bonds) qualify, too, because they retain their value whil💧e generating income.

Milk, on the other hand, is a poor store of value because🅺 it will decay and become wort🐬hless.

Store Of Value Examples

Currency

A reasonably stable currency is essential to a healthy economy. A nation's money must be a credible store of value in order for its citizens to engage in labor and trade, 🌜save money, and spend it. A monetary unit that serves poorly as a store of value destroys all incentive to save or even earn, and reduces the ability to trade.

Precious Metals

Many economies throughout history have used gold, silver, and other precious metals as currencies because of their ability to store value, their relative ease of transport, and the ease of exchanging them for different denominations. In fact, the United States was on a 澳洲幸运5官方开奖结果体彩网:gold standard, meaning that dollars were redeemable for a specඣific weight ꧃of gold, up until 1971.

President Richard Nixon ended dollar convertibility to give the 澳洲幸运5官方开奖结果体彩网:Federal Reserve (Fed) greater power to influence the rates of employment and inflation, among other factors. Since then, the U.S. has used a 澳洲幸运5官方开奖结果体彩网:fiat currency, which a government declares as legal tender bu🤪t is not tied to a commodity of value.

Special Considerations

What comprises a store of value can be markedly different among countries and cultures. In most of the world's advanced economies, the local currency can be counted🔯 on as a store of value in all but the worst-case scenarios.

Stable currencies, such as the U.S. dollar, the Japanese yen, the Swiss franc, and the Singaporean dollar enhance their home economies greatly. They are resistant, although not immune, to 澳洲幸运5官方开奖结果体彩网:hyperinflation.

In those instances, other stores of value, such as gold, silver, 澳洲幸运5官方开奖结果体彩网:real estate, and fine art, have proved their worth over time. The price of gold, in particular, will often skyrocket during times of national peril or when a financial shock hits the broad markets, earning it a reputation as the ultimate 澳洲幸运5官方开奖结果体彩网:safe haven.

While the 澳洲幸运5官方开奖结果体彩网:relative value of such stores of value will fluctuate over time, they can be counted on to retain some value in almost any scenario. This is especially true if there is a finite supply of the store of value.