Is gold investment a part of your portfolio?

Gold investment - even though many people freely trade in stock, derivatives and forex, they're often a little gun-shy when it comes to having a gold in their portfolio unless that gold is in the form of a bracelet or necklace. It's understandable. What once was used as a common form of exchange, often traded as coins to ensure a uniform value, was not only recalled by the government in 1933 but made a criminal offense to own, punishable by a fine and imprisonment for gold hoarding.

Gold investmentWhile people were compensated, as soon as the government had all the gold they deemed necessary, they arbitrarily raised the price. Silver wasn't affected by this act, but the same thing happened to it in 1934 with the Silver Purchase Act of 1934. One interesting aside was that all the 1933 Double Eagle coins were destroyed and only 20 remained illegally, with all confiscated by the US Secret Service but one. It sold for 7.5 million in 2002.

Gold investment has changed

In 1974, all gold investment restrictions were lifted regarding the ownership of gold, including gold bullion. However, most people no longer look to physical gold as a means of investing, just as they no longer consider silver investing that way. Gold investing now often takes the form of paper transactions, just as silver investing does. Many people look to gold exchange-traded funds---ETFs---as their gold investment. ETFs trade on stock exchanges and the investor always knows what's in the portfolio since it doesn't change.

More ways to invest in gold

Almost every company that sells mutual funds offers some type of precious metal fund. In many cases, they offer a gold mutual fund. These funds hold stocks of companies that mine for gold with solid track records. You don't have to go conventional or use mutual funds to invest in gold, you can also invest in junior gold stocks from smaller companies with gold mines that are far less productive. You can also invest in futures contracts in gold or silver or options on these contracts. These are popular ways to invest in gold, even though both are risky, trading options provide an opportunity to invest a small amount of money and are quite appealing to many investors.

Gold has always been the “Back-Up” investment

When the economies of large nations are failing, people look to gold as a “back-up” or fail-safe investment. It always has value and has had for centuries, since commerce and bartering first began. This shiny metal conducts electricity and doesn't tarnish, so it is in more demand from the electronics industry to use for new technology. It also has aerospace, dentistry, and the medical industry, which effectively keeps the price higher. 

Today, there is also the Bitgold site where you can trade gold freely for a small price, making taking ownership unnecessary. These gold site allow you gold ownership with no fear of governmental confiscation since it's not held by you, making it good for those in countries with great civil unrest. No matter what type of gold investment and silver you select, every portfolio should have at least some silver and gold. Most experts suggest approximately ten percent or less for a well-rounded portfolio.


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