Why You Must Invest In Gold Today

Gold. Rare, beautiful, and unique. Treasured as a store of value for thousands of years, it is an important and secure asset. It has maintained its long term value, is not directly affected by the economic policies of individual countries and doesn't depend on a 'promise to pay'.

Completely free of credit risk, although it bears a market risk gold has always been a secure refuge in unsettled times. Its ‘safe haven’ attributes attract wise investors. Gold has proved itself to be an effective way to manage wealth.

Since the dawn of time, the price of gold has kept pace with inflation. Another important reason to invest in gold is its consistent delivery within a portfolio of assets. Its performance tends to move independently of other investments and of key economic indicators. Even a small weighting of gold in an investment portfolio can help reduce overall risk.

Most investment portfolios are invested primarily in traditional financial assets such as stocks and bonds. The reason for holding diverse investments is to protect the portfolio against fluctuations in the value of any single asset class.

Portfolios that contain gold are generally more robust and better able to cope with market uncertainties than those that don't. Adding gold to a portfolio introduces an entirely different class of asset.

Gold is unusual because it is both a commodity and a monetary asset. It is an 'effective diversifier' because its performance tends to move independently of other investments and key economic indicators.

Studies have shown that traditional diversifiers (such as bonds and alternative assets) often fail during times of market stress or instability. Even a small allocation of gold has been proven to significantly improve the consistency of portfolio performance during both stable and unstable financial periods.

Gold improves the stability and predictability of returns. It is not correlated with other assets because the gold price is not driven by the same factors that drive the performance of other assets. Gold is also significantly less volatile than practically all equity indices.

The value of gold, in terms of real goods and services that it can buy,has remained remarkably stable. In contrast, the purchasing power of many currencies has generally declined.

Traditionally, access to the gold market has been through: investment in physical gold, usually as gold coins or small bars,or, for larger quantities, by way of the over the counter market; gold futures and options; gold mining equities, often packaged in gold-oriented mutual funds or through the purchase of paper gold at certain banks.

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Gold: A Solid Investment

Make no mistake, the currency crisis is happening.

Rather than sitting back and letting it happen, protect yourself and profit from an economic upset that could basically render your dollars about as worthless as the paper they're printed on.

We saw this kind of debacle quite recently with the US subprime mortgage crisis, the first indicators of the 2007 - 2010 financial crisis, characterized by a rise in subprime mortgage delinquencies and foreclosures, and the resulting decline of securities backing said mortgages which led to tightening credit around the world and slowing economic growth worldwide. Prior to that in early 2006 a currency plunge triggered an avalanche of sell orders in emerging markets from Brazil to Indonesia. The Icelandic krona plunged nearly 10 percent in only two days, dragging down Icelandic stocks and bonds with it and subsequently spread to Brazil, Mexico, Poland and Turkey.

A precursor to this was the Asian Currency Crash of 1997, which sent stocks south like ducks in winter. Banks, insurance companies, real estate and bonds also fled the scene. The only viable option left was gold.

In the event of another such decline in currency values, gold will be worth at least 10 times its current value.

How is this possible?

Simple: Since gold cannot be made or printed at the whim of greedy politicos, it can't be devalued as quickly as the paper money that is printed whenever need arises.

When a currency is backed by gold, $1 in paper money has to be backed by approximately one dollar's worth of gold. Once a currency is no longer backed by gold, governments can print as much as needed. Naturally, most world governments have gone off the gold standard and that is why paper money has no intrinsic value.

As a result, most major institutions only speculate short term between those currencies and associated local values, such as stocks or bonds, and then they convert their profit into gold.

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