Gold has found a very unique place in the world. It is in demand almost anywhere you go. Its beauty, along with durable make-up, has made it valuable and much sought after by kings, paupers, nations and outcasts.
For many years gold was a standard of currency across international borders. It has also been a source of wealth for those able to accumulate it and hold onto it through time.
With the general economy of the world in great turmoil many people have turned more to gold than any other item. But why has it been the source of so much attention?
Basic Investing Principles
Successful investors are keenly aware that a diversified portfolio is one of the principal keys of continued success. Placing too much of one’s assets into any specific investment choice opens up the risk to loss. People will spread their money around different investment vehicles such as cash, property holdings, large corporation stocks, small mutual funds, options and bonds. When one or more of these investments takes a turn for the worse the investor simply pulls the funds from that source and places it temporarily in another source.
Up until the recent recession many people had chosen to move money from bonds and options to place them in land deals. Real estate was climbing to an all time high and investors could see the potential profit in land. Now that home prices have decreased many people are staying away from those types of investments and leaning towards gold.
The High Performer Gets More Funds
Along with diversification is the principle of putting more funds in an area with higher potential return. Using the earlier example, most people would usually invest more heavily in stocks than bonds or options. While bonds are very stable, they do not typically have a high rate of return. In contrast, stocks, although they do come with risk, typically outperform bonds on a regular basis.
Over the last 10 years the price of gold has literally skyrocketed from a price of $750 per ounce to over $1,400 per ounce. That is a 100% return. During this same time period many people have seen stagnation and even a loss in many of their stock holdings. Therefore, people have turned to gold as the new high achieving investment choice.
Various Methods Available
Purchasing gold is becoming easier due to the higher demand. Most shrewd investors still keep an eye out for British sovereign coins and krugerrands since these coins hold value well. The sovereign in particular has an intrinsic historical value. There are also ways of purchasing bullion without actually possessing the coins.
Perth Mint offers their certificate programme which allows people to purchase the bullion in unallocated accounts. The customary charges of shipping, holding, insurance, and custodial related fees are not necessary since the actual bullion is not delivered to the owner. This makes the purchase and investment into gold a much easier transaction and safer.
Gold has proven to be one of the most stable investments available for centuries. Its ability to hold up to the test of time and retain its appeal makes it a fine choice for any investor.