Should you buy gold to diversify your investment portfolio
The world economy is very unstable right now leading a lot of investors to rethink their entire strategy and to buy gold makes sense as its a great insurance against an uncertain economy. Gold is more in demand now than ever before which is one reason it should be purchased but there are many other reasons smart investors are turning to this precious metal to improve and diversify their investment portfolio.
Gold is the Ultimate Insurance in Unstable Times
One question many investors ask is, “Where should I put my money to keep it safe?” Many are now realising that physical gold is the answer as it has been around for so long. The United Kingdom and Greece are two examples of countries that are in the midst of difficult financial times and gold is one investment that you can count on as it always holds its value. Gold has never been worthless and never will be.
Gold may be used to hedge against other investments because the value of it tends to go up when other investments are on the decline. As the stock market drops, gold prices increase and the same is true when the bond and real estate markets take a downturn. Inflation and deflation are less of an issue when you invest some of your money in gold and interest rates or currency problems won’t be of much concern.
Gold has value no matter where you are traveling as its recognised as a currency the world over. Gold coins and bars can be secured for you in a vault with your chosen provider or can be taken with you if you have to leave unexpectedly or when you find yourself without currency due to government turmoil. People are always willing to accept gold for payment whether you are purchasing goods or services as everyone recognises the value of gold.
When you buy gold bars or bullion, you are purchasing a physical asset and one that is timeless as gold is unlike paper money in that it cannot be devalued. Governments, when they find themselves in need of more money, often choose to print more using Quantitative Easing and, when this occurs, paper money goes down in value while gold often goes up. During times such as this, gold bullion, often in the form of gold coins, can be used to pay for the goods and services needed.
Gold Protects Your Wealth
Confidence in both the banking systems and the economy is at an all-time low which is why many are looking for new ways to diversify their investments. Gold is good for those who are looking for long term investments as it protects and preserves a person’s wealth while eliminating the risk of the investment becoming worthless. It always holds significant value holding on to its price per gram, making it a low risk security asset for investors the world over and the long term forecast for gold remains good as the economies of the UK and the Eurozone are very unpredictable.
This isn’t the main reason gold bullion is such a good investment either. It is safe and non-speculative and designed for the long term. Investing in gold allows you to reduce your risk of major losses due to under performing investments, such as real estate, stocks, shares and currencies.
Control Your Wealth with the Help of Gold
When you purchase gold, you have the opportunity to hold your investment in your hand. Although you can hold a stock in your hand, to some extent, it’s just not the same as holding gold bullion or gold coins and physical gold allows you to have complete control over a portion of your investment portfolio. There is no need to hold it in a safe deposit box or turn it over to a fund manager although these options are available for those who would prefer to store their gold with a third party. With gold, you have ownership and true control while remaining responsible for your financial future rather than leaving this task for someone else.
To have this ownership, gold coins and bars must be purchased. The same can’t be said of electronic or paper gold. When you have physical control over the investment, you and you alone determine when, where and how it will be used and how it may be used and it can be bought or sold with no delay while payment will be received instantly.
The Future of Gold Prices
Gold prices began rising in August 2007 following on the heels of the banking crisis and over the past five years has tripled in value. This trend is continuing as investors are still unsure of the economy and where it is going although this could change at any time meaning investors must do their own research on gold. Gold should be purchased to diversify your portfolio, to safeguard your future and for profit.
The High Demand for Gold Continues
Gold reserves are low which demand is higher than ever in many countries. For this reason, many expect gold to be highly valued for years to come. The World Gold Council in the Third Quarter of 2011 shows gold bullion to be in record demand with China and India being two countries where this trend is the strongest, but France, Germany, Turkey and Switzerland have also seen large increases in customer demand.
Why Now is the Time to Buy Gold
Consumers and Central Banks alike are buying record amounts of gold. Shouldn’t every investor do the same? Many are under the assumption that they can’t afford to get into this market, but nothing is further from the truth as seen by consumers in countries with much worse economies. Everyone should have a minimum of 5-10% gold in their investment portfolio, with this gold being in the form of coins and/or bars which are easy to exchange for goods and services. Having this type of gold ensures you are protected during touch economic times.
Uk Gold and Silver Dealers
The Real Asset Co Ltd
8-9 Talbot Court
|(203) 287 8130|
Centre City Tower,
7 Hill Street,
|(0121) 634 8060|
The Week UK - 1 day ago
Investors are now awaiting the outcome of the European Central Bank meeting in Frankfurt on Thursday, when ministers will discuss interest rates and monetary policy. Last month saw a surge in gold...
Reuters UK - 5 hours ago
Gold is highly sensitive to rising U.S. rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced. Minutes from the U.S. central...
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