What is Store of value ?

Definition of Store of value

Definition of  Store of value

A store of value is any type of wealth, asset or commodity that retains it’s value over the period of time without deprecation. It is function of an asset that can be saved for future, retrieved in future and can be exchanged or sold in future, predictably on profit. It is also assumed to either retain it’s purchasing power or more profitable.

Brief Explanation of Store of value

In the past gold, silver and other precious metals were used as currencies and purchasing because these metals have the ability to store value. This theory is still applicable because plain money has this flaw of losing it’s value over the time , depreciation and inflation. However, few world’s strongest currencies are considered better value than any other declining weak currency.

Store of value includes gold, silver, any other precious ornament, bonds, stock and real estate etc. Category of store in value differs in one part of the world to another according to the demand, need, value, availability and importance.

 BENEFITS:

  • It returns more value than plain money kept in the bank accounts.
  • It is highly liquid but still less than money itself.
  • Money ‘s benefits as store of value decreases if there is significant change in rate or prices.

DIS ADVANTAGES:

  • One main dis advantage of keeping ornaments and commodities as store in value is that the are not as liquid as money itself (Although they always have active selling market).
Previous Post
Newer Post