If you’re like many investors, you’re looking for an asset you can count on in these tough economic times. Traditionally safe investments in stocks and bonds are looking unstable, and many are seeking a safe harbor for their hard-earned wealth.
The recession and persistent weakness of the global economy are bringing an increasing number of investors back to a time-tested and proven commodity: gold. Historically, gold has been a safe bet when nearly every other investment choice is in the tank, and the Great Recession is proving to be no exception to this rule.
The price of gold has been on the rise since nearly the beginning of the current economic crunch, and after a leveling off period, gold appears to be climbing once again. If you want to not just survive the recession, but also thrive in it, gold may be the investment vehicle you need to fight the economic headwinds and make progress in your journey to greater wealth.
Times are tough all over
The world truly is in a global economic funk, and in many countries the unthinkable is happening. Greece may as well be bankrupt, Spain is tottering on the brink and in the U.S., long the economic powerhouse of the world, debt and entitlement obligations are like a ticking timebomb waiting to explode and cause unprecedented economic turmoil.
Even municipal bonds, long thought to be one of the safest investments out there have begun to be doubted by investors concerned about state budgets and the governments ability to pay its obligations.
Historic value
Throughout history, nations and businesses have turned to gold as a safeguard for their assets in tough times. Until recently, most countries currency was backed directly by gold.
Right now there are a number of factors that are urging investors to return to gold as a mainstay for their wealth, including:
– continued instability in world financial markets. Stocks and bonds have been fluctuating wildly over the past two years, rising sharply only to plummet just as sharply shortly afterward. Gold has been steadily climbing in this time.
– the likelihood of high inflation greatly diminishing the value of currency.
– gold’s historic rise in value in times of economic turmoil. After the 1929 stock market crash, gold’s purchasing power rose seventeenfold within just five years. During the tough economy of the 1970s, the purchasing power of gold increased nearly fifteenfold. In our current slump, the purchasing power has increased threefold, so far.
There are factors that may decrease the price of gold, such as stock prices, geopolitics and basic supply and demand. All indicators appear to be pointing to a continued increase in the price of gold.
There’s an element of risk in all investments, but in an increasingly uncertain world, gold appears to be the closest thing any of us have to a sure bet to protect our assets and grow their value.
