Gold bullion is a precious metal that is respected in every corner of the world for its value and rich history. Coins containing gold first made its appearance around 800 B.C and the first coins made of pure gold were minted just three hundred years later at the time when King Croesus of Lydia was reigning.
From then on, gold has managed to hold its value throughout the ages.
Thousands of smart investors, particularly billionaires, view this precious metal as a means of passing on and preserving their wealth from one generation to the other. Although people understand the importance of gold, gold investments are still a tiny part in the total stock of financial assets. One of the main causes of this is the unawareness or lack of knowledge in its benefits.
From the point of view of investment or financial return, gold is definitely a high scoring option in comparison with other precious metals. The USD (US dollar) value of gold has increased by more than 450% in the last decade, thereby offering an appreciation or return of 45% every year!
One of the top reasons for gold investment is that this is a good way of diversifying the risks involved in investments. Moreover, investing in gold bullion is more profitable than investing in paper assets such as the dollar, bonds, stocks, mutual funds and so on. Billionaires and countries all over the world are purchasing gold & silver bullion therefore you too should grab your share of the pie.
When it comes to gold price bullion vs the value of US dollar, the yellow metal wins hands down even though the US dollar is considered to be one of the most important reserve currencies in the world.
The tumultuous fall of the value of dollar between the year 1998 to 2008 due to various reasons such as trade deficits, the large budget of the country, tremendous increase in money supply and so on made people rush towards investing in something as secure as gold. Although things begin looking up after 2008, the demand for gold still remains high. Thus, it is better to invest in gold than US dollars because of the security factor and the fact that the value of gold, i.e. the gold bullion oz price keeps appreciating!
As far as bonds are concerned, the investment of gold beats the same too because the value of gold generally increases at a much higher rate than the value of bonds. Also, out of the two investment options, gold has the highest return relative to fiscal stability. Gold also scores over mutual funds as far as investment benefits are concerned. Gold is a more stable investment as opposed to the highly dynamic mutual fund because gold is resistant to market fluctuations since its value always increases in the long run despite of the short-term issues. So, if your risk appetite is not that big then it would be wise of you to opt for investment in gold instead of in mutual funds, bonds or real estate for that matter!
It is extremely important for investors to not keep all their eggs in one basket, which is why the concept of portfolio diversification is necessary for all investors and they should have a good idea about it. By spreading the wealth instead of putting it all in a single sector, one would be reducing the risks therefore portfolio diversification is the way to go. Gold investment is the key to portfolio diversification because gold is a unique kind of investment in the sense that it is not closely correlated to other investments. In other words, gold has a negative correlation to other financial instruments including stocks. Thus, gold investments are a crucial part of diversified investment portfolios since its price increases in response to the events that are responsible for making the value of paper investments like bonds and stocks to decline.
Investing in gold offers a lot of benefits to the investor, which is why billionaires adore gold. If you are interested in making some investments in order to increase your wealth then you should start by investing in gold. This precious metal is known to be capable of retaining its value during times of financial uncertainty therefore the money invested in gold will definitely not go down the drain. In conclusion it can be said that investments in gold serves as a hedge against inflation and erosion of major currencies like USD. Thus, gold is an investment that is well worth considering by the rich and not-so-rich alike.