Gold Price On An Incline - Now Is The Time To Invest
Gold Investments Are Very Different
Gold is unlike a bond. Gold pays no interest. But, Gold cannot become worthless like a bond can. The values of both rise and fall in free market trading.
Gold is also not a stock.Gold has no employees, no unions, pays no health insurance, has no overpaid CEO, no need to borrow money from a bank, and is recession-proof. Gold simply sits there in your vault quietly doing its job. You can see why for the average stock broker or financial advisor, Gold remains a total mystery.
Sadly for their clients, stock brokers seldom recommend investing in Gold or Silver. Despite the remarkable year-over-year gains they continue to ignore the gains being generated during the current bull market.
Stocks and Bonds prosper in strong economic times and bear higher risks in bad times. By contrast, Gold ignores recessions and does well when these and other traaditional investments fail.
Gold investments also acts as an anti-currency. Here at home, Gold soars in value when the U.S. Dollar is falling. Better still, Gold loves and thrives on inflation events that Bonds hate and destroys the buying power of cash, Bank CDs, or other debt instruments.
And last, but not least, Gold investments are among the last private investments safe from the prying eyes of Government agencies.
There is a time and place in every portfolio for Stocks, Bonds, Real Estate, Commodities, Cash, and Precious Metals. There are very good reasons why this is true.
Maximum Profits Investing in Gold
In uncertain times, like we find outselves in today, precious metals will act more like a currency preserving wealth and resisting deflation forces. There have always been unique periods in American history in which Gold and Silver suddenly act if they were the most scarce commodity on the planet!
During those decades, the investment demand for precious metals exceeds the supply, prices are bid up, and the profits can be dramatic. Let's take for example the last bull market for pecious metals in the 1970s. the price of Gold multiplied by 24 times while Silver multiplied over 30 times. With gains on that scale, Gold and Silver are hard to resist as pure profit plays.
Gold Survives & Prospers in Bad Times
In fact, in recent years, the price of Gold and Silver have more than quadrupled. Impressive indeed! Yet, those gains are far from the 24-30 times of the past leaving us with the opinion that there are still substantial gains still ahead in this bull market.
By contrast, Stocks, Bonds, and Real Estate all depend on the U.S. and World economy to be strong and growing. Right now, it's not. The U.S. is barely struggling out of a severe two year recession, the mortgage crisis still continues, the Government still owns huge chunks of the nation's banks, runs the entire mortgage industry, manages the world's largest insurer, and barely saved General Motors.
The Best of Times, the Worst of Time
Even through these trying times, gold investments (and Silver) make remarkable gains during the worst of times.
1. Wartime Historically, precious metals rise in price during times of war, acting much like a commodity. The more uncertain the future, the better Gold performs. The Federal Goverment increases deficit spending and borrowing to pay for expensive wars. At present, the U.S. continues an 10? year war in Iraq, a war in Afghanistan, and the seemingly never-ending war on terrorism.
2. Recessions Precious metals increase in value during periods of persistent recessions or depressions. During weak economic times when there's high unemployment, the Government borrows heavily to stimulate the economy. Debt is justified in an attempt to replace the lack of consumer/business spending with inefficient Government spending programs.
3. Monetary Inflation Politicians typically create pork-barrel spending programs, expand the monetary supply dramatically, increase the debt of future generations, and eventually create rising inflation problems.
4. Low Interest Rates Anyone with savings held in banks suffer today from artificially low interest rates. In times like these, many investors turn to Gold and Silver to replace the missing returns from traditional cash investments.
At this point in our nation's history, investors face an uncertain future. Liberal spending this year has multiplied the budget deficits far beyond what we declared was "out-of-control Bush Republican spending."
by: Andrea Fox
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