Since the economy took a nosedive in 2008, financial pundits routinely speak about the benefits of investing in gold. Are these financial advisers merely attempting to sell their gold products or are they making a salient point about an investment that all individuals should consider? Each investor should decide what investment vehicle is the right choice. All investors should carefully weight the risks and the rewards while keeping their financial objectives in mind. To help investors decide if gold is the right investment choice, there are several possible benefits to consider.
Buying gold bullion, coins and bars is a great way to diversify a portfolio. Diversification can help improve the overall performance of an investment account and provides some stability during wild times in the stock market. Gold stocks or mutual funds can also be purchased as part of a diversified investment portfolio.
The Poor Economy
Investors look to gold when the economy is weak. A weak or declining U.S. dollar, low interest rates and mistrust in the banking and financial sectors of the economy often push people towards gold and other commodities. Fear forces investors out of the stock market and in to other investments. Gold provides protection against a weak economy as its price is not dependent on any type of currency
, including the dollar.
Gold prices tend to rise during times of inflation. Though inflation has been minimal in recent years, many experts predict that it will become a factor in the future. An investment in gold will be a hedge against future inflation because it retains its value and appreciates over time.
Gold is Tangible
Unlike investments in the stock market
, which are recorded on electronic statements, gold is tangible. It is something you can hold and is virtually indestructible. Gold is not only an investment, it is a possession. Gold also serves as a valuable metal in various industries. It does not corrode, is an efficient conductor of electricity, can be rolled into thin sheets, can be made into wire, and can be alloyed with other metals. As a result, it is used in many types of electronic devices and is in demand around the world. Gold has always been a symbol of status because of its unique blend of beauty, indestructibility, and rarity. It will remain in demand because of its lofty place in the investment world during times of economic uncertainty. No matter how much money you have for investment purposes, gold should comprise a portion of your investment portfolio.
Larry Goldberg is a blogger that is passionate about investing and finance. He currently blogs for Invest in Gold, a blog that helps new investors get in the Gold bandwagon to diversify their asset portfolio.