Investing in Precious Metals
source : World Gold Council
Gold represents a unique investment opportunity—one that offers limited risk and unlimited potential. More and more, experts are advising the purchase of gold and touting its benefits in an investment portfolio. Below are four reasons why gold may be a wise investment for you.
- 1. Predictability
- Gold has a long history of steady increase that has met or exceeded the rate of inflation. One example of gold’s continued stability is that one ounce has consistently been able to purchase a mid-range clothing ensemble. Valid in the fourteenth century when an ounce of gold was worth £1.25 to £1.33, it was still the case between 2000 to 2008 when an ounce of gold averaged £269 (or $472). By contrast, the U. S. dollar bought more than 14 loaves of bread in 1900. However, today, one dollar will fetch only 3/4 of a loaf 1 .
- 2. Scarcity
- You may be surprised to learn how little gold has been mined. Only about 165,000 metric tons have ever been harvested. This amount, if grouped together in one ounce cubes, would compose a larger cube of only 20 meters 2 . Like all rare goods, gold’s value is derived in part from its finite nature.
- 3. Diversification & Hedging
- Because the price of gold does not react to many of the events that trigger fluctuations in securities markets, its value remains unscathed (or may even increase) when other investments will suffer. For this reason, many savvy investors use gold as a “safe haven” for offsetting the impact of potential losses in other financial markets.
- 4. Liquidity
- Another unique benefit of gold is its high liquidity. While some investments—for instance, real estate—can take time to sell, gold can be sold almost instantly on a number of precious metals markets. In particular, bullion coins are prized or being highly liquid.
To learn more about adding precious metals to your investment portfolio, call our knowledgeable account specialists at 1-800-967-INVEST.
- World Gold Council (http://www.gold.org/world_of_gold/story_of_gold/the_constant/) ↑
- World Gold Council (http://www.gold.org/world_of_gold/story_of_gold/demand_and_supply/) ↑
Adding Precious Metals to your Retirement Plan
As you approach retirement age, protecting the value of your IRA or 401K becomes increasingly important. Adding a precious metals component to a retirement account can be a wise decision that limits your exposure to risk.
Financial markets epitomize change and volatility. Too often, unfavorable fluctuations in stocks and securities are largely unpredictable. Inflation, national debt, catastrophes and even scandals have the power to quickly devalue an overly homogeneous investment portfolio.
In the face of uncertainty, expert investors tend to diversify their holdings. Gold is a widely used vehicle for doing just that. As such, the government currently allows for the inclusion of certain gold and silver coins in IRAs or 401Ks.
To learn more about adding precious metals to your retirement plan, call our knowledgeable account specialists at 1-800-967-INVEST.
