Buying Gold as an Investment
Buying gold as an investment is an old age tactic of putting your money to grow and as insurance for future unseen dangers. It is a liquid and tangible investment. There are so many motives behind gold investment. Some invest in the hope of future increment in the value, some because they love the yellow metal, some other for price speculation and so on.
It can be a trading item, store of value, investment, insurance and others. You have the options of investing in gold, gold stock, gold bullion, gold certificates, options, forward contracts, gold linked notes and such other gold related options. Trading gold has also been an old established business. Trading may be like other currencies for future appreciation in the value.
Speculation is the main cause for trading. There may be different types of gold investors like people who store gold, people who include in their portfolio, banks who keep part of their deposit in gold, financial institutions, gold bugs, speculator, petroleum speculator, portfolio hedger etc. There are several ways of investing in gold. Bars, certificates, coins, account, exchange traded funds, mining companies, derivatives etc. are some ways for gold investment.
Gold may be included in your investment portfolio. Gold investment should be a part of your portfolio, but not the whole portfolio. You can invest in gold but with some research and knowledge. Investing is interesting but may be destructive for your assets. Like stock investing, in gold investing also you should do research and fundamental and technical analysis to become successful.
Gold is something that people have been using as a form of currency for over a thousand years. Gold signifies wealth and strength, and the person with the most gold is considered to be the richest. However, in today's world gold is just more than riches, it is an investment in the future. With the ever dwindling currency market and stocks crashing all around us, gold seems to be the safest of investments. Anybody will accept gold, no matter where you are in the world, because gold always has and always will have value.
The best thing about gold is that it always increases in value; if you compare today's gold prices with the prices of gold five years ago you will get your answer. Today more than ever people are turning to gold as a safe means of investing their money and solidifying their finances. Gold can be purchased in a number of forms ranging from the ever popular gold bars to gold coins.
From an investment point of view gold bars make the most sense, since the premium that you pay above the market price of gold is the lowest. Which means if you buy a 400 troy ounce .9999 gold bar you are paying far less per ounce if you buy gold in any other form. On the other hand you will need to arrange for transportation and storage of your gold bars. If possible also get your investment insured, so in case of a robbery you are 100 percent covered.
People often investing in gold for the following good reasons:
Gold is very compact - taking up very little space for the value of money Gold is easy to store - it doesn't rust, decay or dissolve Gold can easily be traded - gold has long been used as currency, being traded for other goods or services
Gold is independent - it can be transferred into any other currency in the world
Gold maintains a steady value - the price of gold may change but this is more a reflection of the inflation or deflation of a given currency.
Gold maintains a very stable value - where modern paper currencies fluctuate greatly and can become worthless very quickly (See Argentina Hyper-Inflation of 1980-2000)
Gold is not traceable - it doesn't have micro chips, serial numbers that are tracked, etc
Gold is not taxed - while you may pay sales tax to purchase it, it is not taxed as property (like your home or real estate)
Gold has no inheritance tax either - because it is untraceable and is a simple possession