Investing In Gold For Beginners

For centuries, gold has been a form of currency that is accepted by all nations in the world. It is much sought after because of its beauty, rarity, and also for its many industrial (and some medical) uses.

Even though gold is so valuable, a lot of people still do not know much about it as a great investment vehicle. Yes, you can invest your money in gold, and it is probably the best way that you can prevent your money from depreciating as a result of inflation.

Why Your Money Losing Its Value?

In the past, the amount of currency that a certain nation can mint should be backed by the amount of gold that it has in its coffers, this is known as being in the “gold standard”. But now, a lot of countries have removed their currency from the gold standard, they started to value their money in accordance with the strength of their economy, also known as its GDP. This means as long as the economy is good, they can print as much paper currency that they believe the economy can support.

But what happens when the country’s finances go sour? When this happens, the country will have more money than its economy can back up, thus making the currency lose value to compensate for the dip of the economy’s strength, this is called inflation. This basically means that a certain amount of money will not have the same purchasing power that it did in the years before the economy weakened and inflation set in. You can see this evident in the US economy at the moment, the dollar has lost much of its value in the world markets.

So Why Should You Invest In Gold?

Unlike paper currency, the value of physical gold is not dependent on the economic strength of any country. So, even if your country’s currency devalues and does not have the buying power it used to have, f you happen to have invested in gold, then its value should be protected.

The reason why gold is resistant to inflation is because it is accepted by all world economies, this is why there is a global standard value of gold; so wherever in the world you end up in, if you have gold, then you can sell it on the market and take the cash to purchase anything you want. So if you invest some of your money in gold today, you can expect that the gold will be able to preserve its value even after many years have passed; there is also a very distinct possibility that you can make a bit of profit as well, especially as the price of gold is expected to rise.

As you may have noticed earlier, it was suggested that you invest only “some” of your money on gold, and there is a good reason for that. You should use gold as a hedge to diversify your investment portfolio and to help preserve the value of your holdings. You should follow the old adage of “not putting all of your eggs in one basket”. How much you invest is up to you, but some of the leading investors have anywhere from 25% to 60% of their assets in gold.

Where Can You Get Gold?

Now that you know why you should buy gold, the next thing that you need to learn is where you can buy it. The old fashioned way of buying gold is by getting in touch with a registered dealer and you can also buy your gold from banks and other financial institutions.

But now, things have become a lot easier because you can now purchase gold from online dealers; but you should only transact with reputable companies who have an A+ rating from the BBB.

Originally posted 2017-01-07 12:09:31.

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