I just wanted to take a little time to discuss Gold as an investment. As the worldwide economy staggers along, fear is in nearly every investment market from currencies, to stocks, to bonds, to oil, and real estate. Nobody really knows where to put their money or what will be safe. Therefore they are holding mainly cash. This is good if you are looking to maintain your wealth, but it will not grow your wealth, and in fact as inflation picks up once a recovery begins, your wealth will shrink. This is where gold can come into play.
Why Gold?
Gold is probably the soundest, safest investment in the world. It likely won’t return double digit percentage gains every year, but it will hold it’s value for the most part, and is a great hedge against uncertain times as well as inflation. The world economies have pumped trillions of dollars into the economy. This will likely lead to economic recovery, however when economies do recover, there will be extreme inflation in my opinion. This is why Gold is likely a great investment right now. Some experts predict it will go as high as $2000 – $2500 an ounce within the nest 2-3 years.
How to Buy Gold?
There are several ways to buy gold as an investment. You can buy and store physical gold which isn’t too bad since a normal sized safe deposit box can probably hold about $1 million in gold coins. Another way to invest into gold is to buy it through an Exchange traded fund that trades on the New York Stock Exchange with the ticker symbol (GLD). Sometimes the best way to invest in gold is just to buy gold mining stocks. As the price of gold rises the values of these mining companies will as well, since their assets are worth more.
As with any investment you should not put all your eggs in one basket. I would recommend maybe 10-15% of your total assets in Gold. If you think economic conditions will lead to Gold’s value increasing in the short term, then maybe a bit more would be ok.
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