Investing in Gold Continues to Be a Sound Strategy

Investing in Gold Continues to Be a Sound Strategy 5.00/5 (100.00%) 1 vote

Long before stocks, bonds and even money, there was gold. Since the moment it was discovered, gold has been a valuable commodity every civilization in the world has coveted. In modern times, this hasn’t changed. Despite the countless options, investing in gold is still a popular choice. However, for many, now doesn’t seem like the time to start. The recession has made everyone hesitant about where to put their money and for those who are new to investing in gold, it can seem like a risk best worth avoiding. Although a certain degree of caution is wise, investing in gold remains a wise choice. Continue reading to learn why this is.

Gold’s Value
As mentioned, historically, gold has always been valued. Long before scientists learned it was good for so many practical applications, humans were simply attracted to it. Obviously, this hasn’t changed.

Of course, the fact that gold is necessary for everything from mining to aircraft and even satellites also helps increase its price. As technology continues to advance, expect gold to continue to play a role. With more and more countries industrializing, more and more of them will have use for these technologies. The result will be an even higher price in gold.

Why Investing in Gold Makes Sense Now
Precious metals always go up in value when an economy is down. Gold is probably the best example of this. When the recession hit, gold spiked in price. That’s because so few options seem available to investors. Countless companies tanked, brining their share prices to zero. Some national banks, viewed by many as steadfast cornerstones of the economy, fell apart as well. Even people’s savings aren’t safe. The government’s efforts have all amounted to printing more money, which raises inflation and devalues the dollar.

Investing in gold isn’t the same as buying shares in a company though. Gold can certainly experience fluctuation, but not to the extent that publicly traded companies do. The precious metal will never declare bankruptcy, for example, or get caught for insider trading. What’s more, gold always retains its intrinsic value. No amount of printing dollars is going to take away from gold’s ability to conduct electricity or resist corrosion. As such, there will always be a market for its use.

Methods for Investing in Gold
Generally speaking, there are three main ways to invest in gold. They are investing in exchange traded funds, buying the physical thing and investing in the mining companies that harvest it.

Exchange traded funds essentially work like normal shares except that their price is tied directly to that of gold’s. In many ways, then, it combines the best of both worlds. ETFs will not suffer from the same forces company shares will, yet they are far more liquid than precious metals are.

Many people prefer to hold the actual thing though. There are many options for investing in physical gold. A lot of people favor bullion as it is often a convenient size and is usually 100% the genuine article. Others invest in gold by buying rare coins. This method can often produce greater returns due to the currency’s historical significance.

Lastly, investing in a mining company that harvests gold can reap many of the same benefits as the other methods. As demand for gold rises, these companies will post better returns.

Keep in mind that investing in gold doesn’t have to mean a portfolio that is nothing but the precious metal. Many people opt to anchor their portfolio by making 10% of it gold. This way, no matter what happens with the market, they know their gold will provide stability.

Though today’s economy is not the best for taking risks, people need to put their money somewhere. The simple truth is that, with so many traditional options unreliable, the best choice may be gold. There are plenty of ways to invest in it and even more to believe it will pay off.