Gold has reached its all-time high of 1600/oz in July 2011. Do you own gold? Is gold part of an overall portfolio? There are 7 good reasons to buy and keep gold:
1. Demand exceeds supply: According to World Gold Council, there is increasing in demand for gold especially in China and India but the supply or production is rather inelastic.
2. Hedge against inflation: Gold is able to protect your purchasing power while paper money depreciates in value because of the rising price of goods and services. It is also a good hedge against the declining US dollar as gold is bought and sold in U.S. dollars and it is also the world’s main trading currency.
3. Preserve your wealth: Gold is able to preserve its value over time while other asset classes fluctuate in value.
4. Price of gold is all the way up The chart, which is taken from GOLDPRICE, clearly indicates the upward trend of gold. The outlook is positive as the demand for gold is growing.
5. An essential component of your diversified portfolio: As you don’t put all your eggs in one basket, gold should be an important part of your overall investment because gold has a very low correlation to stocks and bonds. It is able to maintain its value and reduce your overall portfolio risk.
6. Golden companion for the golden years: Gold is good for retirement. Holding gold is like taking an insurance cover for your retirement fund. When all else fails, you still can count on your gold. Gold is less volatile and more effective in protecting against negative events such as political and financial instability.
7. Care-free way to invest: You don’t have to worry about physical possession of gold. All you need to invest in gold is to open a gold account with one of the financial institutions. You are given a gold passbook and it is as good as the actual gold bar of 999.9 purity. You can continue to buy and sell gold in a hassle-free way.
Are you going to your friendly banker to open a gold investment account today?
(This article is for your information only, consult your financial adviser before investing)
