Buying Gold to Protect Your Wealth

People around the world are becoming increasingly aware of the importance of buying gold to protect their wealth. When times are good and there is an air of confidence in the economy most people prefer to invest in stocks and bonds. However as soon as the tide turns and recession hits they tend to turn to the safe haven of gold.

Why is Buying Gold Beneficial?

The more fragile the economy, the more attractive gold becomes to investors. Although it can be expensive initially to buy gold, many view it as an essential investment for wealth protection. Gold is not affected by changes in the economy or in any industry or business. It has its own intrinsic value and it has proven itself historically to increase in value over time.

It is a fact that gold can overpower currencies too. The Eastern part of the world in particular views gold as a very important asset and emerging countries like India and China are increasing their gold reserves and reducing their dependency on the US dollar. In fact, it’s not an exaggeration to say that they are buying gold like crazy at the moment because between them they consumed 52% of the world’s gold purchases last year.

In the past decade, the real values of most currencies have fallen considerably whereas gold has not experienced such a downfall. In fact while most currencies have fallen in value, the value of gold has shot up. Since 2002 the price of gold has increased by 600%. This is a perfect example of why buying gold to protect your wealth is a smart decision.

Gold versus Paper Currencies

Inflation is the enemy of paper currencies even though ironically it is the continual printing of money that causes inflation. This is exactly why countries such as China and India plus billionaires and multi millionaires all over the world are trading dollars for gold right now.

Such are the times we are living in that the governments of many countries have lost control of their printing presses. The United States is a prime example. Since President Nixon decided to move away from the gold standard in 1971 and start printing paper money which wasn’t backed up by its gold equivalent in the nations reserves, the US National debt has increased from $414 billion to $14 trillion.

The purchasing power of gold will always be high even if paper money becomes worthless.

Planning Your Gold Purchase

Despite all this, inexperienced investors in gold should tread carefully and do ample research before they take the plunge and buy gold. Does that mean that it’s risky to invest in gold? Yes and no.

Yes because there are unscrupulous dealers around plus there are fakes and forgeries when it comes to certain gold coins and gold bars.  Not if you do your homework, research what type of gold is safest to buy, and you only buy from reputable, trustworthy sources.

The seller that I use exclusively now and recommend to all my friends is Regal Assets. I have always found them to be very helpful and trustworthy and they certainly put a lot of emphasis on customer service. I now have my own Account Manager there who is my main point of contact but whenever I have spoken to any of their other representatives I have always found them very knowledgeable about both precious metals and precious metals retirement plans which they can set up for you.  I have put a form to contact them at the top of this site. All you have to do is send them your name, email and phone number then one of their representatives will get straight back to you to discuss your requirements and to make arrangements to send you one of their complimentary Gold Investing Kits.

Buying gold should be a long term decision. It is not the right investment for people who are looking for quick gains for clearing their existing debts. Although the price of gold has increased six fold in almost a decade the ride upwards hasn’t been smooth and there have been short term ups and downs along the way. If you take a short term view you might win and you might lose. If you take a long term view you are much more likely to win.

The longer gold is retained, the more its value will increase. Gold is a relatively scarce metal and it is indestructible and portable.

A person’s investment portfolio should be a combination of high risk better returns and low risk and less return type of investments. Including gold in your portfolio will not only enable its diversification but also maintain stability. So when the market drops and you suffer losses on stocks, having gold in your portfolio will act as a hedge against these setbacks. This is because gold has a negative correlation with other assets such as treasury bills, stocks and bonds.

Gold thus acts as a solid measure of safety. Many financial experts nowadays recommend that you should allocate anywhere between 10 to 30 % towards gold in your portfolio. This will help to safeguard it and to protect your wealth.

A further benefit of gold is its liquidity. Having gold in your portfolio gives you quick access to cash should you need it at any time. The same cannot be said of other forms of investment such as real estate, stocks and bonds.

When planning your purchase of gold you should be aware that some forms give you more liquidity than others. Buying gold coins as opposed to gold bars is recommended for maximum liquidity. This is because you can buy gold coins in smaller denominations. It is easier to sell a number of gold coins as opposed to one gold bar of the same total value because you could sell the coins to more than one buyer.

Gold IRAs

Another way of leveraging gold to protect your wealth is to include gold in your IRA (Individual Retirement Account). A precious metal retirement plan can reduce the volatility of your retirement portfolio.  Including gold (or silver) can help make the safety and profitability of your retirement portfolio much more attainable. Gold IRA’s also offer the added benefit of enabling you to invest in gold in a very tax effective way.

The US government currently permits certain types of physical bullion and rare coins to be held in an IRA. You can learn more about this and how you go about transferring or rolling over your 401k or IRA into a precious metals retirement plan here:  Gold IRAs – Frequently Asked Questions

Buying Gold To Protect Your Wealth – Conclusion

The turbulent times facing global economies right now is putting the wealth of everyone at risk. Wealthy individuals as well as many countries’ governments are already taking steps to protect themselves by buying gold and there is no reason why everyday folk cannot do the same. We hope that we have demonstrated in this article why and how the individual investor should leverage gold to protect their own wealth and that of their families.