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Advantages Of Having An Investment In Gold
At one point or another, we have all toyed with the idea of placing our investment in gold. This longing, or notion is very well founded for Gold is one of the most stable commodities the market has ever known. This precious metal has been part of economies for thousands and thousands of years. In fact, at some point in our history, Gold was recognized as a universal currency that could buy you anything in any part of the world. As long as you had Gold, you were considered a wealthy person.
Owing to that prestigious heritage, Gold has brought a lot of wealth and peace of mind to many investors in the past. It has, however, also brought a lot of heartache for those who lost money due to what is commonly referred to as the ‘Gold fever’. This is when the market goes into a frenzy as the prices for this precious market goes higher. Armature speculators then rush in to buy all the Gold they can get their hands on assuming that the prices will only go higher or at the very least remain where they are at that very moment. But we all know that the market doesn’t work that way. The commodities market can be very volatile; it fluctuates and sometimes it goes up and people make money and sometimes it plummets and people lose money. That is what speculation is all about.
Investment in gold might be the most reasonable decision you have ever made, but before you go buying into that Gold IRA, you need to have the facts. Do your homework thoroughly and consult with a trusted professional who knows the market well. Back in 2011, investors who bought heavily into Gold suffered some loses as the precious metal prices dropped across the Globe due to the economic down turn that followed. But just because the prices dropped doesn’t mean that they won’t come back up. What this goes to show is that Gold, just like any other investment, has an element of risk to it.
If you may be wondering whether or not Gold is the right investment for your 401k, you should ask yourself these following questions:
– Why Gold?
– What level of risk are you willing to assume?
The Risk Involved In Gold Investments
As valuable as Gold is, the main problem is that there really isn’t any traditional way to measure the value of Gold. What we know is that the value fluctuates as dictated by supply and demand. Which can be argued to be the main differential between when it comes to the price of anything. But you see, bonds pay interest and stocks pay dividends, the amount of which indicates how well the company is doing. Bottom line is that these other investment opportunities have a set way through which they can be valuated. Gold does not.
The value of Gold depends on supply and demand that is determined by the various global interests. Determining an exact value for this precious metal is speculation or guess work at its best. But all this does not negate the fact that Gold is generally a wonderful investment. Why?
The Benefits of Investing in Gold
1. It’s a great way to cushion yourself against inflation
This is the one thing that Gold is really good at. As inflation runs wild in the world, the price of Gold invariably rises and this places whomever holds Bullion in a very good position.
2. Excellent long term prospects
Yes, the price of Gold does fluctuate from time to time. But trend studies indicate that this fluctuation is only temporary. A long term look at the trend of this precious metal shows that it holds an upward trajectory.
3. Ease of purchase
We are all about convenience now, and Gold just so happens to be one precious metal that is very easy to buy. Be it online or walking into a land based dealer, buying Gold is not as difficult as most precious metals.
Couple all this with the fact that Gold cannot be manufactured and you have a supply-demand scenario that is very favorable in the long run. Yes, it may fluctuate like most things do in these volatile economic times, but if you take a critical look at the associated trends, you will see that Gold presents one of the most stable and advantageous investments you will ever make.