Why Buy Gold?

Are your finances protected? Gold has been the foundation of wealth as a monetary basis for centuries. In the year 2010, with the recession and ongoing crisis worldwide in financial markets, investors from all walks of life are adjusting their portfolios from “paper assets” to buy Gold IRAs, Gold coins and Gold bullion for protection, insurance and growth against uncertainty, terrorism and the eroding effects of hyper-inflation. American Bullion is here to assist you for all your needs from A to Z.

The U.S. dollar is shrinking in value. It is no surprise to anyone; a dollar does not buy what it used to!

The U.S. Government is printing money at an increasing rate and the Federal Reserve Money Supply has doubled since 2008! The new global economy which has developed over the last ten years has seen a boom in the development of China, Brazil, India and Russia. The world is awash in U.S. dollars as the U.S. has sent trillions of dollars abroad to pay for products, services and commodities. According to a government report, the U.S. Dollar Index is down 37% since the year 2001.

Therefore, if you had $ 100,000 in U.S. dollars in 2001, and the buying power has been shrinking every year, in early 2010 buying power would be reduced by $37,000. Simply put, the U.S. dollars in your pocket bought you fewer products and services each and every year. With the federal bailouts and federal economic stimulus packages approved by Congress during 2008-2009, the U.S. Money Supply has skyrocketed. The U.S. dollar is being “watered down” in value.

Gold, on the other hand, has steadily increased in value over the last ten year cycle while the U.S. Money Supply has more than doubled. Gold prices have increased approximately 350% from 2000 through 2010. Many institutions buy gold for protection against the paper markets, including the 152 year old insurance company Northwestern Mutual Insurance, who in 2009 purchased $400 million in physical gold for portfolio protection.

Gold is one of the precious metals that investors can dive into. If you’re hesitant about buying gold, this article covers a few reasons you should buy gold.

8 Reasons Why You Should Buy Gold

Inflation Risks

One of the top reasons you should buy gold is inflation and the numerous damages it causes. Inflation can be referred to as the loss of value money experiences over the years. So during inflation, if investors leave their investment in cash rather than precious metals like gold, silver, etc., those investments depreciate.

Investors who wish to avoid the damages of inflation can protect themselves by investing in gold or other assets. Hence having your savings in gold/investing in gold will help reduce your risk by a huge margin.

Deterioration

If you’re looking for an asset that doesn’t deteriorate, then gold is yours. Gold does not deteriorate regardless of when you bought it. If you buy gold today, your gold will not lose value in ten years because of its age. The jewelry industry mostly uses gold because gold jewelry w made ten years ago costs the same as gold jewelry made today, making it easy to sell old gold jewelry or exchange them for new ones. 

So if you’re hesitant to buy gold bullion, think about the security and the good returns you’ll end up in the long run. 

Savings

Everyone needs to save for the future. But with the possibility of inflation and the inability to invest certain amounts in assets like real estate, saving can become quite a hassle. Gold helps investors avoid various hassles and easily save by buying gold. Once you’ve invested in gold, you can rest assured that your money is safe for the long run, and you’ll be able to get good returns on your investment.

Investors who are new to the gold market should first understand the market’s intricacies and the best form of gold that would benefit them. Understanding all this information would help prevent you from making mistakes.

Crisis Commodity

During various financial and geopolitical crises, gold can retain its value. Gold’s ability to withstand whatever crisis is going on is one of the reasons why investors should buy gold. Due to this ability, gold is often referred to as the crisis commodity because while other investments are depleting or causing losses during world tensions, gold is one of the major investments that withstand the crisis and outperforms all other investments.

A crisis causes the people’s confidence in the government to fall, but this is when the gold price increases. 

Demand

There’s an ever-increasing demand for gold due to emerging market economies in the market. The increase in demand for gold can often be attributed to countries that intertwine gold with their culture. 

One of these countries is India, the second-largest gold-consuming country in the world. In India, gold is closely intertwined with their culture, and there’s also a high demand for gold jewelry in India. Plus, during wedding seasons in India, the demand for gold usually skyrockets.

China is another country that intertwines gold with its culture. In China, storing gold bars is the traditional mode of saving. Due to this tradition, China also affects the demand for gold.

Also, investors are missing the importance of investing in precious metals like gold. Their recognition of the importance of having funds and investing in gold has also caused an increase in the demand for gold.

Portfolio Diversity

If you’re looking for a reason to buy gold, the numerous benefits of a diversified portfolio should help in convincing you. The best way for investors to diversify their portfolios is by investing in funds that are not closely related.

Diversifying your portfolio helps investors reduce risks they might face during a bad market for stocks or precious metals. Investors who invest in stocks and precious metals experience an overall reduction in volatility.

Accessibility

One of the reasons investors should invest in gold is that it’s easy to access, buy, and sell. Investors can easily purchase gold from reputable sources, gold bullion, or ETFs.

The gold market is also one of the markets that investors can easily dive into. Plus, gold is always in demand, so it’s easy to sell whenever you want.

Price Stability

The price of gold is very stable, and this stability of gold benefits investors. Investors can rest assured that the price of gold would never decrease by a huge margin, even in a crisis. If you examine the price history of gold, you will recognize that gold is always stable despite global crises and events, making it a great buy.

Frequently Asked Questions About Buying Gold

Is gold safer than cash?

As a store value, gold is better than cash. Keeping your money in cash would barely bring any major returns, especially if it’s kept in the bank.

Also, during inflation, the cash would lose its value, making gold better and a safer form of investment. 

Is it better to buy gold coins or bars?

If you’re looking to invest in something with historical and cultural value, gold coins are the best to invest in. Plus, gold coins have great collectible value when compared to bars.

Is gold a good investment for the future?

Yes, gold is a great investment for the future due to the high liquidity it offers. It also works well as an investment cushion during emergencies.

American Bullion specializes in adding precious metals such as gold and silver into individual retirement accounts. To learn more, call 1-800-326-9598 and speak with a precious metals specialist.