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Investing in gold?

Posted by absnet on 21 November 2009


As we already know, for centuries gold has been confessed in its unique blend of near indestructibility, beauty, rarity and  its status as a universal currency. Empires and nations have sought to possess gold as a medium of international exchange, as a store of wealth and in order to increase and preserve power. Individuals have used gold as a store of wealth and as insurance against the fluctuations and depreciation of paper money and other macroeconomic and geopolitical risks. Perhaps no other market in the world has the universal appeal of the gold market.

Gold can be said to be the world’s most liquid investment trading throughout the world daily. The market never closes and, as a result, you can buy and sell Gold in any country at any time. It’s price relatively stable. Gold can form the cornerstone of a conservative or aggressive strategy because it tends to move in the opposite direction of paper investments.

gold-coins-images

Gold is the ultimate asset and the purest form of money. It is the oldest, most durable wealth-preserving asset on the planet.  Governments can’t devalue it.  It has no debts, no board of directors, no politicians or central bankers that can mess with its value.  That’s why gold has survived every economy history has ever witnessed, and preserved investors’ purchasing power over a span of some 5000 years.

for your investing security, diversification and risk management is key factor. You should not put all your investment in one type of asset. So a healthy portfolio should includes a wide range of assets including a variety of equities with exposures to different market sectors and regions; a variety of different countries bonds; a diversified property portfolio; a cash component and a 5-15% allocation to gold-related investments and gold bullion or gold coins.

Some exposure to gold should be included in all diversified portfolios. A good rule of thumb would be a minimum allocation of around 10% to gold and related gold-investments.

Gold bullion (gold in its physical form) is the ultimate safe haven asset and a great way, if not the best way, of ensuring wealth preservation and for passing wealth from one generation to the next. Once the solid base or core holding of gold bullion is achieved in a portfolio then other investments in gold such as mining stocks and mutual funds and other more speculative gold investments can be considered.

Gold is more accessible to the average person because an investor can easily purchase gold bullion, from a dealer or, in some cases, from a bank. However, with the advent of more advanced financial instruments, gold, along with other commodities, has become much easier to invest in without having to buy the physical metal. There are now exchange traded funds (ETF), that replicate the movements of the underlying commodity, giving investors direct exposure.

for a description on how valuable gold is, if you had purchased $25,000 of gold coin in the early 70’s and held on to it during the oil crisis, inflation, devaluation of the U.S. dollar, Savings and Loan scandal, recession, tech and internet bubble, cooked books, 911, and a real estate bubble you could sell that gold today for $524,999.00.

interested in gold investing?

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