Many people today who are looking for something to invest in always ask whether is gold a good investment or not. This is an age-old question which continues to arise; especially in times when the economy is as unstable as it has been in recent years. Yet time and time again, the answer to this question is always the same.
Gold can be a very profitable investment if it is done properly. Investing in the precious metals market is not the same as it once was.
There are many more investors these days which have led to the larger fluctuations in the market value of precious metals. At the same time, holding on to gold as a means of stabilizing one’s portfolio is no longer suggested by many experts.
While every one knows that there are limited supplies of gold, silver and other precious metals on this planet, and that it is this limited quantities that makes them so valuable, what most investors fail to realize is the going inflation rate.
In the old days there was nothing wrong with buying and holding onto gold because its value increased faster than the rate of inflation. Today however, while gold’s value steadily increases at a rate of about 2%, the inflation rate increases at a rate of 3%.
Is Gold A Good Investment Right Now?
What this means is that if you hold on to gold long enough, you will end up loosing more and more of your investment every single year. Yes, the value of the gold will increase dramatically as each year goes by, but what you can do with the money becomes more limited with each passing year. An easier way to look at it is to ask yourself what you could purchase with a dollar ten years ago and whether you can still purchase it today for that price.
This does not mean that gold is not a good investment though. What it means is that when you invest in the precious metals market you have to think ahead and plan for necessary trades to improve your standing. It also depends on whether you plan on investing in physical gold bullion or if you plan on purchasing notes and funds.
The most profit potential when it comes to investing in gold is the scrap metal business. Many people over the years have found it to be a very profitable investment. They head out on Saturdays and Sundays to visit the local garage and yard sales to see what trinkets can be found. Then they determine how much it is worth and attempt to get the item at the best price possible.
While most scrap metal investors then take these trinkets and sell them to scrap metal recyclers, a small select few go through the painstaking and dangerous process of refining the metals. It is important to point out that in the refining process, you will need to make use of various acids which will be responsible for dissolving the metals until you have a virtually pure product left. Disposing of these acids can prove to be a difficult process in some places.
For those who opt instead to sell their scrap metal to recyclers, finding a reputable one seems to be the most difficult part about investing in the gold. Some cities have precious metal recyclers while others do not. Those who don not have a local recycling center will have to sell their gold online and pay to mail it to the buyer. This can be very risky for someone who is new to gold investing.
In the end though, it really does not matter if you are planning on investing in funds and notes or even if you are going to invest in the physical metal, gold can prove to be a very profitable investment when done right. If you are wondering is gold a good investment, then you are already on the right path to making a good profit. Those who ask questions are willing to learn; and in order to win big when investing in precious metals, you have to be as knowledgeable as possible.
Take the time to learn as much as you can before you make any investment. A good investment always starts with a sound investment plan and strategy. You will only be able to develop a good investment strategy after you have taken the time to learn as much about the investment process, as well as the refining of gold, silver and the other profitable precious metals as you possibly can.Dan Craig