Let’s first understand that different investments have pros and cons, and the choices we make are always customized to our personal circumstances, which include many variables. Some of those variables include the following: investment objectives; time to reach your goals; your risk comfort level; the value of your existing holdings; its unique tax consequences; your potential need for liquidity; and more. Here I have mentioned a few things that will lead each of us to our own decisions for our unique situations. Please note that I am not providing any investment advice, particularly in light of what I have just mentioned above (I am not a tax, legal, or investment professional, nor do I know anything about you or your particular circumstances). Let’s see how gold and silver fit into this picture.
So why gold and silver you ask?
The answer is because it has a place for almost anyone in your portfolio. Let’s review the reasons.
Both gold and silver are universal. That is, they hold their value anywhere in the world, no matter what local currencies are doing or what local economies are experiencing. Gold and silver is the world’s currency and, in fact, has been the basis of currency on our planet for thousands of years.
Of the many goals that people have, some invest to build wealth and others to sustain or protect wealth. I think it’s fair to say that most people invest to build a financial future or to protect their financial future. Because gold and silver are precious metals, they have an innate ability to hold value, which is perfect for wealth protection. This makes it ideal for saving a percentage of your investment and protecting those dollars by owning physical bullion. By doing this, you are also building your wealth.
It is true that there are risky investments that can give you a higher return, but it is also important to keep in mind that they are also more likely to give you big losses. High-risk investments have their place (for some people), but if you do venture there, make sure you know what you’re doing and make sure you’re diversified to mitigate that risk. Once again, gold and silver are a perfect place for a low-risk investment simply because they will always have value by nature.
Another important point is how it relates to the economy and changing economic conditions. Various economies move up and down around the world. These changes cause all types of investment to swing wildly. These changes cause inflation and even deflation in currencies around the world. Both the value of gold and silver also vary, but keep in mind this interesting point: You can buy practically the same amount of milk today with an ounce of gold as you could thirty years ago. How about stability! Don’t be fooled by small changes in value…it’s important to realize that both gold and (especially) silver have important functions in commercial use, and those demands have an effect on a daily basis.
So why are gold and silver a smart investment now?
In short, the answer is uncertainty. There are a lot of riots all over the world. We have threats of terrorism abroad and at home. We have changed world trade and power with the growth of China and other growing nations. We have a growing threat from North Korea. We have a US President who some citizens feel is exactly what we need, but other citizens are horrified at the very prospect of his presidency. Whatever happens here, the uncertainty is a good reason to have the stability of silver and gold in his portfolio at the moment.
An additional reason to invest now is the looming prospect some people feel of our currency imploding. People preparing for disaster are collecting gold and silver because they can use it as currency to trade for things that they would need in such a scenario.
Whatever your reason, precious metals can be a great addition to your portfolio or a great way to start your portfolio. Just make sure you learn how to shop the right way and shop with confidence!