One of the most valuable elements in the universe is also one of the most historic investments man has ever known. If gold was your guess, you are certainly right. Gold has always been one of the most tangible representations of wealth for hundreds of years that goes far beyond the sheer confines of a single currency form. Although the current market offers thousands of potential options for investment, gold is still on top of the list for many savvy investors who have an eye on security.
Here are 5 reasons why gold should be a part of your investment portfolio.
- The supply of gold is limited – One of the most important reasons to invest in gold. Only a set amount of gold is available on the planet, and it is becoming increasingly challenging and costly to access it. Just watch Gold Rush on Discovery Channel! Because of this reason, supply is limited. If there is limited supply and there is steady or increasing demand, it stands to reason that there is no danger of a decrease in the value of gold.
- Gold is a universal store of value – No matter where you go, gold is immediately recognized as valuable. If you take out a few pieces of gold in a rural village in Tanzania, Dallas, or Tibet, you will quickly be in business. If you combine that with an index fund, or even your pounds, dollars, yen, yuan, or rubles. Investing is fundamentally shopping – you shop for things to buy hoping that their value will increase and/or give you back money or increase your worth every year. There is a difference between investing and shopping and that is, at some point, you will need to sell the investment to buy other things. You cannot predict the future, but you can rest assured knowing that when it comes time to sell, your investment has been in demand universally since time immemorial.
- Gold can withstand inflation and deflation – One aspect of gold that makes it most appealing as an investment is that it is not tied to any single form of currency. If the United States is hit by inflation and the dollar becomes nearly worthless (which could happen if America continues to print money it does not have to support an economy that is not working), you can still buy and sell in other currencies around the world. In this way, gold has the ability to withstand inflation, deflation, and even the collapse of a banking system or country, all while it retains value in other parts of the world.
- Gold offers diversity to portfolios – A pivotal strategy for any investment portfolio is diversification, as risk can be mitigated and vulnerability reduced for investors. Although there are many forms of diversifying, one of the most popular and most secure things to do this is to invest in precious metals, such as gold. It can be extremely helpful in balancing out other investments like bonds, stocks, or real estate.
- Gold protects against government debt – In the last 10 years, the debt ceiling has been continually pushed higher by the US government to support the overspending by the Obama administration. This debt, inherently, causes a decline in the dollar. Because of this, many Americans are losing confidence in their ability to pay back those debts. More dollars and lower interest rates are created by the Federal Reserve and across the globe, Central Banks hold more dollars than any other currency. When they need protection for themselves, they buy gold.
As you can see, you gain many benefits when you include gold in your investment portfolio. It is one of the best decisions you could make financially. The whole idea behind an investment portfolio is that you cannot know which investment will be best for the future, so you choose half a dozen or so of them in the belief that some investments will do very well when others will just increase in value gradually. It is important for gold to be one of those elements (no pun intended) in everyone’s portfolio.
If you want an investment that offers protection and value at all times, there is nothing better than precious metals like gold. They have a wide range of uses in different industries and there is always a demand for them. This is why you should definitely include gold in your business portfolio. You will reap fantastic benefits with this investment, no matter how many years go by.