Store Of Value

What is a 'Store Of Value'

Any form of commodity, asset, or money that has value and can be stored and retrieved over time. Possessing a store of value is an underlying basis for any economic system, as some medium is necessary for a store of value in order for individuals to engage in the exchange of goods and services. As long as a currency is relatively stable in its value, money (such as a dollar bill) is the most common and efficient store of value found in an economy.

BREAKING DOWN 'Store Of Value'

What is considered a store of value can be markedly different from one region of the world to another. In truth, any physical asset can be considered a store of value under the right circumstances, or when a base level of demand is believed to exist.

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. However, currency can sometimes come under attack as a store of value (such as in hyperinflation). In those instances, other stores of value have proved their consistency over time, such as gold, silver, real estate and art. The price of gold, in particular, will often skyrocket during times of national peril or when a financial shock hits the broad markets, as demand grows for other widely recognized stores of value.

While the relative value of these items will fluctuate over time, they can be counted on to retain some value in almost any scenario, especially in those cases where the store of value has a finite supply (like gold).

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