Posts Tagged ‘Buy gold’

Why buy gold

[ Tags | Buy gold | Gold investment ]

During very long period of mankind’s history gold was, actually, “money” – a measure of value for other goods. Now when somebody talks about reasons for buying gold, he or she usually means gold’s unique ability to save money, and as a rule such words as ‘inflation’ and ‘portofolio diversification’ are pronounced.

INFLATION
Gold — an excellent way of protection against inflation. When buying power of any currency falls, the prices for gold grow and catch up with inflation. While the US Federal reserve system starts a press, the basic strategy for protection your investments from inflationary and currency risks there is a gold.

DIVERSIFICATION OF PORTFOLIO
Many investors combine investments in gold with their stock and bond portfolios to reduce risk because of gold negative correlation with stocks and bonds.

Other words gold price increases when the value of traditional paper investments goes down.

MAKING MONEY
When we speak ‘investment’ we mean something that can bring us profit. It’s really tricky question whether is possible to make a fortune on gold. The gold price is typically not very volatile, that makes difficult to earn money on price fluctuation. It’s a very trait that makes gold convinient for saving money but not convinient for making profit.

The average investor traditionally uses gold just as a ‘safe haven’.

But if you take a look on this chart it will be understandable, that during last 10 years gold hasn’t made its owners more poor.