Why Gold is a Good Investment in 2016
Gold looks great. Gold looks good on you. Gold is a very powerful color. Gold has historically been one of the most attractive precious metals on the market. But besides cosmetics and social status, gold is a very powerful investment vehicle. The real value of gold goes beyond the things that people can see. If anything, gold can provide peace of mind. Let's face it. We live in a very uncertain world. The stock market can crash tomorrow, there might be a mass unemployment, there can be a lot of civil disturbance and there might even be a natural disaster this year or the year after next...
All sorts of things can happen that can really shake our confidence and really make us feel uncertain. It is precisely those times and those situations that gold is built for. If you are looking for peace of mind and a sense of security when everything else seems to be falling down all around you and falling apart, gold is it. This peace of mind is the greatest of the many benefits you get in investing in gold. However, the benefits of investing in gold are quite long. Here is just a short list of what would otherwise be an unlimited number of benefits of investing in gold:
1) Gold protects your purchasing power
When the price of commodities like food, sugar, oil, rubber, you name it shoot up, guess what else shoots up with it? There is one obviously wrong choice. The price of the dollar doesn't shoot up with the price of commodities. On the contrary, the price of dollar sinks when the price of commodities goes up. After all, the price of commodities the world over including gold, coffee, sugar, oil, rubber and a lot of other things are priced in dollars. So if the price of commodities goes up logically speaking, the price of dollar goes down. You have to think of it that way.
So if the price of commodities is shooting up, it's not the dollar that the value is shooting up as well. The dollar is losing value so what other commodity shoots up with the basic commodities? You guessed right! Gold. When gold does this, it protects your purchasing power. Why? You hold on to gold as an investment. When it shoots up, your investment is worth a lot more money and inflation doesn't eat into your purchasing power. You could always cash in that gold very easily and quickly to get today's dollar value for that gold.
This is why throughout history, through times of famine, war, social disturbance, plagues, you name it, people have always sold everything else, bought into gold and protected themselves that way because wherever they go with their stored wealth, they can easily cash it in and start a new life or rebuild. That's how gold worked back then, that's how gold is working right now and that's how gold would probably work way into the future.
Make no mistake about it. Gold protects your purchasing power and your assets. This is one of the biggest benefits of investing in gold. This is not a theory or a speculation; this has been proven again and again throughout history. If you are stomped or scratching your head as to the benefits of investing in gold when it seems like there are so many other lucrative investment vehicles to invest in now, just consider the discussion above.
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2) Gold is internationally recognized
Regardless of whatever cave, hidden valley or isolated region you go to, chances are that the people there would prize gold. That's how universally recognized gold is. It's a universally recognized store of value. Why is this important? Why is this listed in the many benefits of investing in gold? Well, when a commodity is universally recognized then its value is universally recognized. When its value is universally recognized by many different people of different colors, races, religions, ethnicities and language groups, you can be assured that your gold holdings will have value regardless of where you go in the world.
We live in a very unstable time. People migrate due to disturbances all the time. War can break out in many different parts of the world. As a result, people find themselves on the run. People find themselves moving from point A to point B. In many cases, they never intended to make the move but they had to do it. Whether it's overnight or at the last minute, they had to do it. They had to leave everything behind. They had to just leave with the clothes on their back. However, if they are carrying gold, regardless of where they go, regardless of how isolated their new home is, they have the means to start over again. Among the many benefits of investing in gold, this is one of the most crucial because portability and universal acknowledgment is a direct measure of value.
The same cannot be said about real estate certificates or precious art. If you are forced to migrate to the other half of the planet and people there haven't heard of Andy Warhol, guess what? All those amazing Andy Warhol prints that you are holding are instantly worthless. The same goes with your real estate deeds. People in that part of the world where you relocated at to escape violence and destruction have basically rendered your real estate holdings at the other half of the world worthless. See how this works? There is only one exception to this and that is of course gold.
If you are still stomped regarding the benefits of investing in gold, think about its portability.
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3) Gold has many industrial uses
It's easy to get caught up in the market for precious metals. As you probably already know, there are other precious metals that are worth more than gold. Their daily prices are much higher than gold. In fact, considering that gold has been trading sideways in the past few months and it seems that sometimes gold slumps, that gold might not be a good investment.
It's easy to think this especially if you compare gold to the many other precious metals out there that are doing quite well. However, don't let this fool you. The reality is that gold has many industrial uses. It also is used all over the world as a form of jewelry. If you put these two factors together, you have a strong based demand.
The same cannot be said of other precious metals. Take the case of palladium for example; palladium is used for the catalytic converter of cars. However, if there is a law that passes or there is a cheaper substitute found, guess what will happen to the price of palladium? You have to think of precious metals this way; you have to look at how broad their industrial base is and how broad their jewelry use is. If you are trying to compare the different precious metals out there, they don't hold a candle to gold's base industrial use and base jewelry use. Among the many benefits of investing in gold, you have to always consider industrial and jewelry usage. Why? This impacts the scarcity and the underlying base market demand for this precious metal.