In these uncertain market times, people are much more concerned about their money. Bank interest rates are down, stocks continue to be volatile, and prices across the globe continue to increase. Because of these factors and more, people concerned about their savings should consider gold investments. read more!
Precious metals have always been considered valuable. Dating back before the establishment of currency and money, gold was used in bartering. If a miner had found gold, he would often use it as a method of trade for goods or services that he needed. In many ways, this system is still in place.
Currencies are backed with gold & silver
Once money was established, a value became important. A rich person might have many ounces of golden currency while a peasant had only silver. Even though both metals held value, it had to be determined how much of one would equal the other. Time and trials established that silver was inferior in value. Thus, gold became the standard by which all currency was measured. View details from http://www.moneycontrol.com/news/gold/you-must-know-this-before-consideringinvestmentgold_1383449.html
Tied to value is also scarcity. Most stores of this metal are held above ground in depositories. Because it is much more difficult to mine and to find, its value becomes more important. On the other hand, the other metals are much easier to mine and get into circulation. Therefore, their value is often variable based on the amount in the market at a given time.
Historically, investments are looked at as a whole. If you picture a pie, each slice may be slightly bigger or smaller depending upon the needs of the owner. For a person who is comfortable with high risk, the piece of the pie that includes metals may be fairly small since gold has not fluctuated in large amounts. Instead, it may be used as a small percentage to simply round out a well-designed strategy.
Spreading the risk in your IRA
On the other hand, if a person is getting close to retirement, he or she may want to make their piece of the pie dealing with gold a bit larger. This strategy is good for people who do not want to see a lot of fluctuation in their accounts. The rates do not usually change with large swings, thus it is perfect for investors looking to live off a certain amount each month.
Another strategy tied to precious metals is that of a safe guard. The general belief is that having access to these elements helps guard against any financial crises. Prior to the market crashes of 2008, many people purchased to protect themselves if the market dipped too low. This strategy paid off for anyone in the stock market during the most recent crash. These individuals did not have their entire life savings wiped out.
Whether your purchase is for hedging against crashes or simply to round out one’s portfolio, it is important to diversify your portfolio. No one should place all of their money into a single form. The risk associated with such a move is immense. Instead, watch the values of precious metals and determine how much you may want to add to your personal collection. It is almost always a good, stable, safe bet.