Humans have a strange, innate love of gold that has existed for centuries, guiding us in decisions and conquering nations. The scope of gold’s influence is wide and paralleled only by our love for it. When it comes to investing in gold however, it’s important to take a step back from these human tendencies and view it for what it really is – a profitable investment.
Just like every other type of investment, timing is everything with gold. Recently, the price of an ounce of gold has risen dramatically to reach its highest levels in recorded history. At the time of this writing, an ounce of gold fetches the fair price of $1,500, an incredibly high amount. This should be enough to make the prudent investor sit back and wonder if this is really the right time to be getting into gold. It’s a good question, considering that the number one rule of investment is “buy low, sell high.”
Is gold high? Absolutely. Should that be any reason to avoid buying gold right now? Absolutely not! The thing with gold is that unlike stocks, which represent a company, gold represents currency. In the event that paper currency fails, the world economy will fall back on gold, just as it has done for thousands of years. Look at the factors involved right now – the economy is at an incredible low, jobs are scarce, the US dollar is dropping, and gold continues to skyrocket higher and higher. That by itself should be a solid indication that gold is the one investment that will keep on chugging despite anything else that happens.
The proper way to invest in gold is to use a system called dollar cost averaging. When you’re doing this, it doesn’t matter what the current price is. If you’re unfamiliar with the term, read on for a description of how it works.
Dollar cost averaging is a system of investing a pre-set amount every single month. For example, you might6 invest $300 in gold at the end of every month, regardless of where the price sits. It could go up or it could go way down, but you’re still going to stick that $300 into gold every single month. By doing this, you’re consolidating your risks and leveraging into the market with greater protection. Gold is like any market – it fluctuates. You buy at the lows, you buy at the middle, and you buy at the highs. Throughout it all, you keep your previous investments and allow them to mature.
The reason this works so well is that the fluctuation keeps you secure. If you buy in the first month with gold at $500, the next month at $600, the next month at $450, the next month at $550, the next month at $700, and then the sixth month it drops down to $400, you’re still covered with your investment. Timing is everything with gold, and there has never been a better time to get started.
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