Investments in Gold – Chapter 2: Advantages of investing in Gold

This is chapter number 2 out of 15. Read the rest:

Read Investments in Gold – Chapter 1: Introduction

• Historically, gold has held its value well, even in times when the value of the dollar has fallen. Due to this very reason, it is a good buffer for your savings against the danger of inflation.

 

• The supply of gold is limited. It cannot be created and has to be extracted from the ground. Because of this scarcity, gold can retain its value. Paper money on the other hand is a creation of the Central Bank. Uncontrolled printing of paper money can virtually render it worthless.

 

• The value of gold has been on the uptrend. Since 2001 alone, its value has quadrupled.

 

• As the economies of the two most populous countries,China and India, become more affluent, the demand for gold will continue to increase. This in turn will force the value of gold to rise even further.

 

• Comparatively, gold related investments have a tendency to perform much better than stocks or bonds during times of political or economic instability. A notable example is during the recent Global financial crisis. While prices of stocks and bonds fell dramatically during those chaotic times, the price of gold on the contrary has risen substantially.

 

• It is a proven store of value and even during times of wars. Its rarity, durability, portability as a storehouse of value and universal acceptance makes it an attractive alternative to money. 

 

• Nowadays, its appeal lies in the fact that gold is able to diversify one’s investment portfolio and safeguard the value of one’s wealth.

 

• There are several ways which one can invest in gold. One can opt to invest in actual physical gold in the form of bullions,  Krugerrands, rare or old coins, in virtual gold like E-Gold, gold futures, paper gold and spread betting. The following chapters of this guide will go about exploring the mechanics as well some of the risks involved in the investment of gold.

 

Read Investments in Gold – Chapter 3: Disadvantages of investing in Gold
Read Investments in Gold – Chapter 4: Guidelines for Investing in Gold
Read Investments in Gold – Chapter 5: Investments in Physical Gold
Read Investments in Gold – Chapter 6: Bullion Bars and Coins
Read Investments in Gold – Chapter 7: Numismatic and Semi-Numismatic Gold Coins
Read Investments in Gold – Chapter 8: Gold Certificates
Read Investments in Gold – Chapter 9: Allocated Accounts
Read Investments in Gold – Chapter 10: Paper Gold Investments
Read Investments in Gold – Chapter 11: Gold Stocks
Read Investments in Gold – Chapter 12: Gold Futures
Read Investments in Gold – Chapter 13: Technical Analysis
Read Investments in Gold – Chapter 14: The Motivations for investing in Gold
Read Investments in Gold – Chapter 15: Conclusion