Gold has been being used as a form currency for thousands of years and up till 1971 nearly each major dollar in the world was backed by gold. The fact is that gold is a rare, nearly indestructible item that man has coveted for a long time and will continue to covet. Although gold is currently seen as simply a commodity it's still traded for currency all over the globe.
Growth Rate
In September of 2005 if you purchased an ounce of gold you'd have paid $470. Fast forward five years one ounce of gold is currently going for around $1570 that is like having a huge interest rate on your initial investment, not bad for an investment. Experts predict the value of gold reaching $2000 an ounce in the very near future. With the values of major greenbacks taking place all over the world, the value of Gold is going up.
Diversification
One of the main reasons you must buy gold as an investment is to utilize it to diversify your portfolio. Stocks and bonds are great in small dosages but in reality they're simply pieces of paper that represent ownership or a part of a company. If that company that you own shares in tanks or an extreme situation happens like the market crashing all you will have is paper. Gold is tangible and indestructible thus it's much more secure. There are currently plenty of markets conducting gold transactions so it's very easy to buy and sell gold particularly in its currency forms like gold coins, bullions, and bars. This type of flexibility makes gold comparatively simple to liquefy into cash so gold’s liquidity doesn’t need to be a problem to discourage you from buying it.
Security
One of the biggest advantages of gold is the security it could provide given an all out economical disaster. If a economic disaster occurred which rendered the fiat currency system null in void nobody would want accept paper cash for goods or services. Individuals would be forced to return to doing what has worked for thousands of years before the fiat currency system, backing everything with gold. If you see people using a wheelbarrow to move an enormous stack of hundred dollar bills to buy a loaf of bread then you know you'll be sitting well if you've got a reserve of gold lying around.
Learn how to trade gold or practice your trading strategy with a FREE MetaTrader 4 Demo Account.
Posted on Wednesday, 28 December, 2011.
Subscribe to:
Post Comments (Atom)
0 comments:
Post a Comment