For thousands of years gold has been used as a form of money and a reliable investment commodity. However, in the present day, most countries use cash which could be coins or paper notes. Most people have money in the bank which day access either by withdrawing the cash when they need it or they perform transactions through the use of debit or credit cards. They could also write checks when they need to make purchases or pay for services. It would be strange to see a person bringing out gold to pay for services or goods at the mall or grocery store.
Why should you invest in gold?
If we cannot use gold for our day to day purchases, then why should we invest in gold? Well, that is an excellent question. One ounce of gold in 1970 was equivalent to 37 US dollars, but by 2010 the same ounce of gold was worth over 1,400 US dollars. Therefore, gold like other precious metals can be used as a hedge against inflation deflation or currency devaluation although some people question the validity of this statement.
I have my own personal reasons for being Interested in gold as an investment vehicle. Last year I realized that I was getting very close to retirement. I decided to increase my contribution towards my 401K retirement plan. However, I noticed that each time I contributed money which was deducted from my pay, within a few days I lost more than I contributed. This went on for a few months and then I decided to move all my funds to a stable fund that would pay 2-4% annual interest.
The other reason is the possible devaluation of the US dollar. The US government is in trillions of dollars of debt. They are also printing Dollars without any consideration for the value of the dollar. Foreign countries a beginning to doubt the value of the dollar. The US has a very strong country both politically and in influence. However, one does not know how long this will last. If there is another US economic downturn the dollar may lose value and gold will be a reasonable hedge.
How and Where to Invest in Gold
There are different ways a person can invest in gold. You can invest in physical gold which includes gold bars, gold coins and gold rounds. You can also invest in non-physical gold which would be things like gold certificates exchange traded products and gold stocks. Make sure you choose a trustworthy and reliable company when you decide to go ahead with your purchase. Most of them provide a free investment kit which you can request for and make an informed decision.
Gold prices may fluctuate but they can never be as volatile as stock prices. I have personally invested a large sum of money in very promising biotech stock which ended up losing practically all its value. The value of gold is not likely to ever become Zero so investing in gold is much safer for the regular Joe or Jane like myself.
I have tried my hands on many investments strategies and I think investing in gold now when the price is relatively low compared to recent years is a wise decision. You might also want to discuss with your financial adviser and win him or her over as soon as possible.
Thanks for reading and happy investing