Is Gold A Good Investment? 9 Time-Tested Reasons Why
Gold is a precious rare commodity with time-tested value. Anyone who possesses some gold in their portfolio will be making a very wise choice. This same choice has been made for centuries by wealthy governments and individuals because gold is a consistently valuable precious metal. Read on for more reasons to add gold investing strategies to your portfolio.
Is Gold A Good Investment? 9 Reasons Why It Is
1. Historically, gold will always have value, no matter what. Gold is one of those valuable materials to withstand the test of time as far back as 500 B.C. That longevity is significant proof of the prevailing power of gold. In our current bear market, the value of gold is dropping, but don’t let that scare you, this is the time to buy gold.
2. Gold is a smart buy if inflation is on the horizon. Why is buying gold a good investment strategy during times of inflation? Because gold has proven to be worth more during times of high inflation. In 1946, 1974, 1975, 1979 and 1980, inflation was at an all -time high but, gold saw a return of 130%. Buy now at low prices and see a big return on your gold when inflation levels rise.
3. Gold is priced low right now. Right now is one of the best times to buy gold as lower prices. Previously $1800 per ounce, it is now $1300+ per ounce. Snatch some up while the price of gold is still low.
4. Gold diversifies your portfolio. Adding around 10- 20% of real gold to your portfolio ensures you are diversifying your wealth. It is never wise to place your hard earned wealth into 100% paper investments. You want some assurance you will have some means of wealth if paper investments see a tragic decline. Gold keeps its value, but without the same kind of interest return stocks and bonds can produce. So, don’t buy 100% gold either. Balanced diversity of your overall portfolio is the smarter choice.
5. Real physical gold offers protection in a currency crisis. Events such as the Great Depression in the 1930’s are a good example of a currency crisis. But, even though the value of the dollar declined exponentially, gold’s value increased to soaring highs. With the current economic uncertainty, it is hard to pinpoint when and if another currency crisis will occur. However, when it does, history has shown us gold prices will explode again and help you survive a currency crisis.
6. Gold can be liquidated relatively easy. All it takes is a little research on your part to find the best market for the type of gold you want to sell. Know what kind of gold you have so you know the best venue for selling.
- Gold jewelry–Best sold at a used jewelry store or eBay or other retail outlet. Don’t sell only for the gold, but also the beauty and craftsmanship of the piece as a whole.
- Numismatic or collector coins–Find reputable dealers at The American Numismatic Association.
- Gold bullion–These government issued coins and bars come in standard weights and purities making selling prices straightforward and easy to find.
7. Other countries are investing in large amounts of gold. When countries want to collect gold, this indicates they are seeing it as good investment strategy either because they are preparing for the worst or because they know demand will be high. China consumed over 4,800 tonnes of gold in 2013 and is still collecting more. Dubai is preparing a new gold refinery capable of processing over 1,400 tonnes. This indicates a healthy demand market for gold. Why would other countries invest so much in gold if they did not see a strategic future advantage?
8. Gold can be sold in any country. In a troubled world economy, it is nice to know gold can be bought and sold freely in any country. It can also be converted into cash anywhere in the world.
9. The price of gold remains stable over time. Even though the value of the dollar declines, gold holds its intrinsic value as a piece of tangible property. Its value never changes except to fluctuate with the natural ebb and flow of supply and demand and current economic conditions. Its purchasing power is shown to survive in periods of inflation or deflation.
Evidence shows that adding commodities such as buying gold and silver is an extremely wise addition to your portfolio. Knowing how to buy gold is also very important. You want to make sure you have gold that will have a high resale value such as the American Buffalo or Canadian Maple coin which has a .999 purity level. Do your research and be a savvy gold investor. To summarize, why is gold a good investment? You will survive hard times with a balanced dose of gold in your portfolio.