Why Should I Buy Gold?
Gold is a natural metal that is inherently valuable. This means the value itself lies in the gold. Compare this to paper money. The printed paper itself has no value. It is the value we give it that makes it worth something. So while our currency is subject to wild swings in its value, the gold standard remains much more steady and valuable. You can freely trade and exchange with gold anywhere in the world. The same cannot be said for many currencies. In fact, the gold reserve is what is supposed to back up the dollar. Ideally, there would be an equal amount of gold for every dollar in circulation.
As our volatile and uncertain market continues to cause uncertainty, gold values have remained strong and increased. Gold has remained valuable throughout history as almost all cultures have shown an affinity towards it given its beautiful shine and refinable texture. In 2009, however, gold is being looked upon as a utilitarian measure. Many are purchasing gold in large quantities in hopes of avoiding any dollar, euro, or other currencies drop in price. Many people who invested early have made a significant chunk of money off buying gold at $300 an ounce or lower. Gold currently tops $900. Some have predicted gold prices will continue to rise as our global recession continues.
While the upside of making money from gold is certainly there, you should look at gold as more of a fundamental investment to your portfolio. It is an insurance of some type as it diversifies your currency investment. As we have seen recently, both the dollar and the euro have suffered and many have lost large fractions of their networth simply from the value of their money – not anything they were invested in. Try to add at least 5% of your portfolio to gold gradually. Obviously, the bigger foundation you build, the more stable your currency will be.
The key to gold is you need not worry about the value plummeting or gold going bankrupt. Gold always maintains its relative value and becomes even more sought after in times of economic uncertainty. There are several online bullion stores as well as available stock options with which to trade gold.
February 7, 2009 12:58 am