Throughout centuries and around the world, gold has been a highly sought-after prize. King Midas was a legend thanks to his mythical ability to turn things into gold with just his touch. Since gold coins originated in 800 B.C., gold has held value as a monetary standard.
Modern investments can be overwhelming to the beginning investor. You are told to invest in low-risk, stable return stocks, but struggle to define which those are. Fortunately, most investors can agree that the long term success of gold investing is typically a safe bet. Included here are a few reasons to invest in gold.
Maintains Its Value
With the long-lasting success of gold, it is clear that this precious metal is able to retain value throughout the years. Many financial experts who worry about the crash of the modern market, proclaim gold to be a safe bet for its inherent value. While paper money is assigned value, gold is internationally inherently valuable. Gold is seen as a physical means of preserving wealth from one generation to the next.
Weakness of Other Currencies
The American dollar has been fluctuating in its value and is forecast to continue dropping in the coming years. When the dollar falls below other significant world currencies, people tend to buy out gold, unintentionally inflating its value. Gold has recently been valued for as much as $1,800 to $1,900 per ounce in the late 2000s, up from barely $1,000 in the late 1990s.
Good Bet Against Inflation
With the high rate of inflation, your sitting dollars are losing value. The price of gold tends to rise as the cost of living goes up; an example being following World War II. Prices soared in the five years during the highest American inflation ever seen. While stock market returns tend to plummet in times like these, gold managed to hold value and even increase.
Secure Against Deflation
Countless individuals are concerned about the coming crash of the U.S. dollar. They fear that the dollar will plummet and people will be left scrambling to find enough money to afford to live. During the Great Depression, gold managed to retain great value and even increase its value. This is due to the fact that the paper money has lost its assigned value while gold continues to be a precious metal.
Stable During Political Change
Government may come and go but gold remains a stable commodity worth investing in. For many people, when trouble in government occurs, they look to a stable financial resource; which is often gold. People know that even with international relocation, gold will be a valuable resource, enough to continue living and surviving even during uncertain political climates.
Categories: Precious Metals Market