Many people in the industry will tell you straight up that gold as an investment is perhaps one of the best options for diversifying any portfolio. Anyone for that matter will tell you that gold is one of the safest investments possible these days. It is constantly increasing in value at a rate of about 2% annually.
Before the recession, it was considered that the two safest investments anyone could make was in purchasing land and owning gold or any other precious metals. However, the housing market crashed and as a result, millions of homeowners owed more to the bank than their home would ever sell for. At the same time, Platinum used to sell much higher than gold, but it has recently dropped well below the value of gold.
Today, gold is still the strongest and most reliable investment that anyone could possibly make. It flourished through economic breakdowns all over the world and throughout time.
As a matter of fact, whenever the value of the dollar decreases the value of gold increases substantially. Many people invest in gold simply to give them something to fall back on if the entire economy were to fall.
However, if you plan on making a lot of money with gold as an investment, you are going to need to start off with a lot of money in the beginning. The value of gold by the ounce is quite high and to get an amount of any real investment value, you will need to start with several thousand dollars.
Then there is the rate of inflation which affects the value of the gold. On any average year the value of gold increases at a rate of roughly 2% annually. However, the rate of inflation and thus the cost of living increases at a rate of almost 3% every single year. Because of this, you lose 1% of the value of gold for every single year that you hold onto it. However, by numerical standards, when you sell the gold years later, you will get more cash than you initially spent on the gold; whether or not that money will go as far as it used to is dependent upon the inflation rate.
If you want to use gold as an investment in the short term, than you are going to need a lot of leverage; some serious buying power. While the value of gold is fairly stable, it does fluctuate in small amounts every single day. To make any profits from these fluctuations, you need to be able to buy tons of gold at a time.
Since most people don’t have a couple billion dollars to purchase a ton of gold, most instead opt to invest in gold funds. Known as gold exchange traded funds, these investment pools are not actually the purchase of gold, but rather investing into a company that invests in gold. They take your investment along with countless others and use all of it for the leverage needed to buy large lots of gold at a time.
It is important to remember that while these funds are great for short term gold investing, one should not hold on to them for very long times because there is the chance of losing some if not all of your investment. In recent years, several of these funds have gone belly up leaving their investors with nothing. Those that do not die, end up losing more and more value with every single passing year.
While many people chose to invest in gold online and through a broker, many more people opt to have possession of the actual gold. There are many places to buy physical gold in your city and all over the internet.
You can start by checking out your local coin shop and seeing what they have to offer. Keep in mind that you will be paying a little bit more than the bullion’s worth in gold because the shop needs to make a profit.
You may however choose to shop for gold online at the many different websites that offer it. In making a purchase online, no one actually sees you buying it and since it is delivered to your doorstep, no one will ever know that you have gold in your home. After all, if anyone knew, there is the potential that your home could be a target for robbery.
Just be safe and make sure that you are making a well-informed decision regarding your gold investment. If you take your time, your investment will be a safer and more profitable one.Dan Craig