Our fascination with gold is almost as old as the history of humanity itself. Its rise in prominence finally culminated when first golden coins officially became a currency in Asia Minor in 600s BC. Today, although it was replaced as a monetary unit a long time ago, gold still strongly affects national economies through its influence on official currencies. Still, in spite of its obvious value and significance in the overall economy picture, how does gold fare as an investment? Actually, it holds up pretty well.
A Very Long History of Holding Value
In the absence of a better term, gold is very reliable. Its history of holding value for more than 2,000 years makes it even more appealing than some national currencies to the chosen audience. Namely, people like to look at gold as heritage which will overcome all current economic turbulences, and be suitable to be passed on to future generations. Upon observing this issue from the long-term standpoint, this reasoning makes much more sense.
An Opportunity to Diversify the Investments
Putting all your eggs in one basket has never been a sound business decision. The more diversified your investments are, the bigger your chance for success. Investing in gold will give you an opportunity to do exactly that. Even when you opt for this particular kind of investment, dealers like GoldMart will offer you enough different options so you can further diversify your portfolio, and thus keep your investment more secure than if you didn’t.
Vulnerability of the Most Common Currencies
The US dollar and the entire US economy – the global economy in fact – has recovered from the crushing 2007-2008 global financial crisis. Still, no matter how encouraging current economic indicators might seem, it is just a matter of time when the next crisis will tear everything down again. Some economists are predicting the next great recession as soon as 2018. Even if we write off the more pessimistic predictions, it is obvious that the next great blow is going to happen sooner rather than later. In that case, having such a durable commodity as gold seems like a good idea.
All currencies face inflation, and the US dollar is not excluded. Although we have not seen two-digit numbers since the 1980s, the inflation rate devaluates American currency each year. Historically, gold has been a great hedge against aggressive inflation, because when the costs of living increase, its value usually tends to rise.
Troublesome as they are, financial uncertainties are, unfortunately, not the only thing pushing gold into the focus of your investments. The other variables you should pay attention to are geopolitical developments, and as we can see, some decades-old geopolitical issues are far from being solved. Not only that, but a new crisis appears seemingly on a daily basis. It should be noted, therefore, that during similar situations in history, gold usually outperforms other investments and saw much better price movements.
Old Romans used to say that “history is life’s teacher”. Well, if history has thought us anything, it’s that people will always value gold. Remember this important lesson and do not write off gold.bars while planning your next great investments.