The price of gold peaked around 1980 and fell significantly shortly after. From there though, it has had its ups and downs, but its price always seems to rise if you give it enough time. Buying gold is considered a good investment despite the changes in price, and here are four reasons you may want to consider adding some gold to your portfolio.
It's a Precious Metal
According to Investopedia, gold is a metal that has been used for money and trading since around the year 800 B.C. It is a yellow metal that is mined from the ground and is considered a luxurious type of commodity that people respect and admire. It is something that wealthy people have always enjoyed owning, and the U.S. uses it to back up the currency produced.
Gold is something that is used to produce jewelry and other valuable items, and you can invest in gold by purchasing bars, coins, jewelry, and other items made of gold.
Diversification Is Essential For Investing
Any financial planner of investment advisor will tell you that one of the most important elements of a portfolio is diversification. Diversification means spreading out your money in a variety of different investments.
By doing this, you will reduce your risks. If one investment fails and you have 10 different kinds, the other nine probably will not. On the other hand, if you have all your money in one investment and it fails, you could lose your entire savings.
As you diversify your portfolio, your investor may suggest buying into:
- Mutual funds
- Certificates of deposit
- Real estate
Each of these can be a great investment, but it's not wise to put all of your money in one type. Forbes recommends investing roughly 5% or less of their money in gold, but financial advisors may suggest more or less than this percentage.
Gold Is Strong
The World Gold Council suggests that investing in gold is a great investment because gold is strong. Gold is used in the U.S. to control inflation, and this gives gold a unique type of strength. Although the prices of gold fluctuate, the price almost always seems to rise over time.
If you are nearing the age of retirement, choosing gold might not be the best investment option, but it is a good choice for people that have time to let it increase in value.
Gold will always be worth money, and one of the reasons for this is because there is such a high demand for it. The majority of gold that is sold today is recycled gold. Mines cannot find enough new gold to keep up with the demand for it, and that is why recycled gold is so popular.
There Is Less Risk With Gold
When you invest in stocks, the companies selling them could easily go bankrupt and you could lose your entire investment. The same thing could happen with real estate investments and many other types, but this is not something you will experience with gold.
No matter what happens to the stock market, the economy, or the world, your gold will always have value. Gold is not something that is only valuable in the U.S., which is another reason gold is a great investment. Gold is valuable and in demand all over the world, and this is because gold is considered a universal commodity.
If you ever decide to sell it, you will not have to worry about finding a buyer. People always want gold, and you will easily be able to sell it when you want to.
If you are interested in buying gold, you should look for a reputable gold dealer. While gold prices fluctuate, the price per ounce may currently be around $1,200, and you can purchase as much as you would like. Have a peek at this website for more information.