Ideas on How to Become Rich - Investing in Gold Part II
Hi, I will now discuss about the potential of gold as a long term investment as this commodity does not wear out through time. Also its value is well recognised by everyone and by every country. Earlier I mentioned the reasons why gold is so sought after.
During the last few years, governments of the world have been buying and hoarding gold and have a hefty gold reserves in their national treasury. This is especially so of Asian economies like China and Japan who value gold as their alternative strategy of diversification in the monetary administration.
They do so because of their strategy for national security as well.
The governments of most countries including the United States argued that keeping reserves in gold enabled them to control the fluctuations in currency and other financial instruments as part of their macro view of economic development and growth.
Due to the intrinsic value of gold and the desire of the people all over the world to own gold either in the form of jewellery ornaments or in the physical form, gold investment should be part of our getting rich strategy for the future. Moreover gold is a barometer of one's wealth in the eyes of other people so it is a good financial asset to have.
Let me also share with you another very important reason for investing in this metal. It is because in times of crisis, gold is still the best form of investment because currency and other precious metals cannot provide the mental and spiritual wonders of gold. Gold does not tarnish unlike other metals. Also the world after the banking crisis in 2009, the environment for gold investment has gained prominence due to the lessening of confidence in the banks and other financial instruments coupled with the weakening of the US Dollar.
It is a good time to go into gold investment whether it is in the physical form of gold jewellery/bars or ingots or in the form of ETF (Exchange Traded Funds) or in the form of structured notes similar to those instruments traded in the markets. Structured notes are usually capital guaranteed where the returns of investment is based on the performance of gold.
As gold is a quasi currency, gold prices tend to rise when US dollar falls. This is evident during the past few years when prices of gold kept going up and the US dollar kept falling.
However if you wish to invest in gold, you have to first examine your own profile with regard to risks and your circumstances in such a way that you are able to take whatever outcomes of the market. In investment you have to take whatever outcomes of the market which is very volatile especially these few years due to the decrease in confidence of the financial systems in many parts of the world.
Another point you have to take note is the market sentiments which could be changed very quickly due to bad news or could rise very much due to some positive sentiments of the general world economic conditions.
Well, to be rich, one has to take certain calculated risks. Investing in gold has certain advantages. It is definitely up to us to weigh the pros and cons of jumping into this volatile gold market today. Do think about it, and have a thought about this idea.
Think about it but it is worth its weight in gold!
Cheers
Sally Klaus
Ideas on How to Become Rich
PS These are contributed ideas and thoughts, and by their nature do not constitute investment advice.
