According to the investment pros at Wholesale Direct Metals, complaints about traditional investment assets abound. It’s not hard to see why this might prove true. The stock market has always proven shaky and uncertain, the value of the dollar is constantly plummeting, and the U.S. economy is lurching toward permanent disaster. Given all of this, it truly comes as no shock to find so many investors seeking alternative options—but which investment assets are the best?
One worth considering is gold. Simply put, gold offers many advantages, and has throughout history. For those looking to hedge against global economic collapse, or simply to further diversify their portfolios, gold is the way to go. There are several specific advantages offered by gold; Wholesale Direct Metals lists five of them, below.
Gold Provides Investors with Safety
When times get tough, economically—and certainly, they have in recent years—investors tend to seek ways to move their assets into slightly safer investments. For those simply looking to protect their wealth and to insure their savings, gold is a great option. When you have direct ownership of gold, you have wealth that you can hold in your hands—not wealth that depends on a borrower’s promise to pay, which is what you have with bonds.
Gold Helps Investors to Diversify
Diversification is one of the most important concepts in all of investment; diversification, of course, protects our portfolio from the fluctuations in a single asset’s value, or from fluctuations in a group of assets that tend to move together. Most investors “diversify” only by putting together different stocks and bonds, but true diversification means having several different asset classes. Experts recommend that you diversify by having at least 10 percent of your portfolio wrapped up in gold.
Gold Offers Protection Against Inflation
There is no denying the fact that paper currencies see their purchasing power diminish over time. Gold, however, has maintained its purchasing power more or less throughout history. Its value today is the same as it was a hundred or even a thousand years ago.
Gold Helps Investors to Hedge Against the Dollar
Along similar lines, gold is often used as a hedge against the U.S. dollar. Investors know that the dollar has not exactly performed well in recent year. Fortunately, gold offers a safety. As the dollar’s power diminishes, the price of gold rises and rises.
Gold Helps Investors to Manage Risk
Finally, it is important for investors to note that gold is less volatile than most commodities. In fact, gold is less volatile than most other equity indices. Including gold in your portfolio will significantly lower your portfolio’s risk, then.
Why Gold?
For those who have ever wondered what makes gold such an attractive investment, these five points should provide some answers. The bottom line is that, in an unstable economy and with an unstable dollar, gold is remarkably strong and secure. For most investors, that is reason enough to make gold a significant part of the portfolio.