During periods of economic growth, it is easy to believe that investing in stocks will help you grow your wealth at the exclusion of other investments. However, we have seen both in the dot.com era and in the recent recession that investing in stocks at the exclusion of other investments (like gold coins, real estate, etc.) leaves you vulnerable to stock market turbulence.
In 2008, hearing that a family had lost 50% or more of their college education savings due to the drop in the stock market was not unusual. For many of these families, their children were already in high school and would need the money in just a few years. While they felt they were prepared for the future, the economic downturn proved otherwise.
Benefits of Investing in Gold
If there is one thing this most recent downturn has taught us, it is to diversify investments. One investment you may want to consider is gold coins. Gold bullion can help improve your investment portfolio because during times when paper stocks are down, gold prices are often up. The reverse is also true. While you may be losing money in the short term with your paper stock investments, you will often be gaining money through your gold investment.
In addition to providing stability to your portfolio, gold has an impressive track record. It may lose money in the short term, but it has always maintained its value over the long term. In fact, since 2002, gold has increased in value significantly, climbing from approximately $300 to approximately $1,600 in 2012 with a peak of $1,900 in 2011.
Gold can also help protect against inflation
During periods of high inflation, the value of gold has historically risen. While your paper money may have less value, the gold you have invested in will most likely rise in value.
Tracking the Price of Gold
If you want to enter the gold market, knowing the price of gold is essential. In times of economic uncertainty, the price of gold can fluctuate substantially, so it is important to know the average price so you can buy as low as possible. Organizations such as Lear Capital offer the price of gold daily; they also offer investment advice if you would like to consult someone before investing in gold.
Interest in gold tends to wane during periods of economic growth, but as we have seen recently, gold becomes a valuable commodity during times of economic difficulty as well as during international instability and rising inflation. Gold also serves as an excellent investment to diversify your portfolio and ultimately protect you from paper stocks’ volatility.
Post by Melissa