Investing In Gold

Do you know that gold has not been touched by inflation over the last sixty years? The same amount of gold that purchased one gallon of gas in 1940 will buy 1 gallon of gas today.

While paper money is subject to incredible fluctuations, and stocks fly, or crash daily, bullion keeps its value.

One reason is because gold and silver are becoming more rare. In 1971 the US government cashed in their gold reserves. Now, with silver, the demand is expected to outstrip the supply in the silver reserves within a few years. In fact, some investors are saying that silver may spike far above gold for a short time.

That is why many people are starting to invest in bullion, building their wealth in gold and silver, instead of cash. One million dollars at today’s value, in gold, is worth more than one million dollars in paper money.

All the gold mines in the world combined are only able to gather 2,500 metric tonnes of gold from the Earth. This gold supply, is quickly being dwarfed by the ever increasing demand for gold. The best estimates suggest that 4,000 to 5,000 metric tonnes of gold is purchased each year. Demand exceeds the gold supply by 60% to 100% annually, creating an acute supply shortage.

Investing in Bullion

There are several ways to invest in bullion and take advantage of the situation. Many people buy gold bullion, a type of coin that does not have a stamp or image, and no fixed monetary value.

Gold stocks, or gold derivatives also provide opportunities for investors to enter the gold investment markets. But, do not be mislead. There are risks attached to market tolerance and capital deployment as with any potential investment.

Building a Portfolio

Before investing in gold, consider what percentage of your portfolio should be invested in bullion. There is a unique feeling, something primal, satisfying, and secure, when holding a couple dozen coins in your hand, or feeling the weight of a bag of silver. Something clicks, and you suddenly understand the difference between accumulating money, and building wealth, true wealth that can last for ages.

Recession Proof

Many of us have endured set backs in the economy, but there hasn’t been a real, country wide recession in decades. However, while Rembrandts were given away for a single meal, bullion retains its value.

When a dollar is not worth the paper it is written on, a gold coin will still be traded without hesitation. That one million dollars worth of bullion, will now be worth more, while that one million dollars worth of cash, will now be worth much less – maybe not even $100 000.

Not only that, bullion can be carried across borders, and still retain its value.

As the NASDAQ bust painfully taught investors, any stock, no matter how solid can crash within hours. This will never, ever, happen with bullion. It has a self-intrinsic value not contingent on a person’s, or a country’s performance or promise to pay.

A stock market crash may eliminate your investment portfolio. Identity thief may cost you every penny in your pension or bank account, but, based on historical fact, any bullion purchased at today’s prices will command - at least – equal value in real goods for your great grandchildren a century or more into the future.

Article Source: http://www.contentspool.com

Mark Walters is a third generation investor who guides others to financial independence through the Creating Wealth Club www.CreatingWealthClub.com

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