subject: Gold as an Alternative Investment [print this page] Gold as an Alternative Investment Gold as an Alternative Investment
Of all the precious metals, gold is the most important metal and holds the greatest value. Gold has always been an inseparable part of Indian culture. It has been gifted at weddings and passed on from generation to generation as wealth. Today, when one thinks of investments, gold comes to the forefront. Although it cannot provide as convenient cash flow as actual money can, it ranks high in investment and savings value.
Investors see gold as a safer option compared to equity and bonds since its value is not influenced by crises that might occur in the social, economic, and political realms or currency related problems. It is not affected by social unrest, stock market crashes, war or inflation. The price of gold has only increased in recent years, making it a very attractive option for those wishing to make safe investments yielding high returns.
An important point in favor of gold investments is that it is a scarce metal. This means that the total amount of gold in the world is limited and estimated at 8,187 cubic meters. To investors, this would mean that the gold resources are only depleting and as history reflects, the rarer a commodity is, the higher is its value.
Gold has long been linked to capital in the Western society, and even at times used as a currency. However, obviously these dayspeople prefer to use paper notes instead of carrying around heavy metal bars. But it still thrives as an asset: the most convenient aspect of having gold as an investment is that it can be liquidated at anytime (usually over the counter) and will get a higher return than the original price that it was purchased at. There are many dealers that are willing to buy and sell gold whenever one wants to trade in it.
Gold investments can be made through direct or indirect means. The direct way is through physically owning gold. In this way, gold can be bought as bars, jewelry or coins. However, the best and safest way to own gold (for investment purposes) is in the form of coins of different weight denominations. Even though gold bars have lower premium values than coins, the conditions for their appearance are not very strict and thus invite instances of forgery. Valuing jewelry derived from gold also lends itself to forgery, and even often has high making charges. With these considerations firmly fixed in the minds of investors, it is no wonder gold coins are the most popular way of storing gold:coins are easy to recognize and verify with simple measuring devices, and they usually come with a certificate of authenticity.
The indirect methods of owning gold are through Certificates, Accounts, Shares in mining companies, Derivatives, CFDs and spread betting, and Exchange-traded instruments. However, these alternatives involve some level of risk and are therefore not as popular as investing in gold directly.
In a day and age where people now want to make safer investments with the best returns, gold features high in the ranking. After the economic depression, more and more people are turning to this precious metal for security. From the aforementioned facts it can thus be seen that gold is a credible means of investment and has indeed proved its mettle!
