You only need to read the news headlines to realize that the economy, as we know it, is profoundly changing. The forces on the economy and your investments range from bombings to political revolt to managing unbelievable amounts of debt in many countries. How do you protect your financial resources in this environment? Stock market investments over longer periods of time have shown steady growth, in the short term maybe not. Investments in the stock market are volatile, subject to market forces and manipulation by the big banks and hedge funds and require nerves of steel. Market manipulation happens more often than you realize because the big investors know how to play both sides of a stock investment and don’t mind working hard to make it happen.
What can you do to protect and grow your hard earned cash? Gold is the investment choice for difficult economic times. Gold is not subject to the volatile currency trading environment and can be sold to anyone, anywhere.
Does this mean you have to store gold in your home or in a safety deposit box? The answer is, only if you want to. The current price of gold makes it possible to store a valuable stash without clearing out a room in your home, if that is what you choose to do. Storing gold in your home always brings risk of theft, so be alert to that possibility. You can buy gold funds and/or invest in gold mining companies. Any stock investment requires that you do your own due diligence and/or obtain the advice of an investment professional, so you are fully informed about what you are buying.
Regardless of how you choose to invest in gold, it can be your safe haven and a secure investment in these troubled times. Gold prices have already soared and according to investment experts it still has a long way to go. Not only can you protect your investment you can enjoy profits from the growth of gold prices. The volatility and problems in the world certainly don’t appear to be going away any time soon and with gold at least you don’t have to lose sleep worrying about your investments.
Reasons to Invest in Gold
The dollar is falling. “People aren’t necessarily worried about inflation pressures,” says Stephen Platt, a commodity analyst at Archer Financial Services in Chicago. “They’re more worried about the devaluation of the dollar.” Historically, gold has been the asset of choice for people who lose faith in their currency, and gold and the greenback have had a seesaw relationship since the 1970s, when currency prices were first allowed to float. When one rises in value, the other tends to fall. Owning gold is increasingly seen as a hedge against the hazards that come with holding the dollar, the world’s reserve currency.
Central banks in emerging nations are buying. The central banks of India, China, and other developing nations have been purchasing huge quantities of gold, in part to diversify against the dollar. Recently, the Reserve Bank of India bought 200 metric tons worth $6.7 billion from the International Monetary Fund. Shortly after India’s announcement, the central banks of Sri Lanka and Mauritius reportedly bought the metal, albeit on a far smaller scale. Grant notes that while central bank holdings of gold are hefty in the U.S. and much of Europe, the metal still represents a small slice of official reserves in Asia. “China is the sixth-largest official owner in the world, with just over 1,000 metric tons, but that sizable hoard amounts to less than 2 percent of total reserve assets,” he notes in the latest issue of Grant’s Interest Rate Observer. Ji Xiaonan, an official at China’s State-Owned Assets Supervision and Administration Commission, recently said that “though it’s not known how much the Dubai crisis will affect the global and domestic economy … this may give China an investment opportunity to use part of its foreign reserves to buy gold and oil reserves.” If emerging nations boost their gold holdings to, say, 10 to 25 percent of reserves, Grant says the change “would represent a tremendous amount of demand.” [Click Here to read the full article from CBS]