THE RIDGEWOOD BLOG.
The Ridgewood Blog Brings a Free Market Laissez-faire Point of View to Local, New Jersey State and National Issues.
The Basics Of Gold Investment
The Basics Of Gold Investment
For many people, the idea of investing in gold is a relatively unknown concept. After all, when we think about investment opportunities, we tend to focus largely on the traditional stock market, where we can buy and sell shares of companies. For some, this is a means of income, and for others it is a side financial venture designed to make a little more money over time. But gold investment is an entirely different concept, as it is done by literally purchasing physical gold bullion, rather than shares of any specific company. So, how and why is it done, exactly?
It is actually very easy to invest in gold, thanks to various online sites such as Bullion Vault, where you can buy, manage, and sell gold as you please. Unless you specifically want to keep your gold in your home, you may not ever see your gold bullion, but you can buy any amount that you want, and have it stored in any of a selection of vaults worldwide, to be kept safe until you wish to withdraw or sell it. Actually, the whole process is extremely easy and convenient, which means that if you do ultimately decide that gold investment is for you, there isn’t anything to hold you back from jumping right in. Deciding whether or not gold investment is a good idea depends more on your own preferences and personal decisions.
While gold bullion seems like a luxurious source of investment, you do still need to understand that the gold market is not designed for quick, or even significant gains. As compared to the ordinary stock market, and the average company, the price of gold is relatively stable, and is less prone to sudden shifts in value. For this reason, most people who invest in gold bullion to so to protect their existing monetary assets, rather than in the hopes of making a significant amount of money. If your money is tied up in gold, then it is less subject to negative economic shifts that can downgrade the value of your currency.
This does not, however, mean that gold is always a safer source for your wealth than currency is. Typically, the price of gold moves up or down with an inverse relationship to the value of the U.S. dollar, which means that in times of economic stability in the United States, the dollar is likely to be strong, and a gold investment may make less sense. Likewise, when the value of the dollar is dropping, gold becomes a more strategic investment. These are not concrete rules so much as general trends, but they can help you to understand when to trust the gold bullion market.
This is a guest post on behalf of Bullion Vault written by Micahel Andrus, a freelancer with experience writing about alternative forms of investment.
I would hope that people would not get excited about this tripe – this is crazy – it is obvious that the poster has no clue about the dangers posed to people investing in bullion. First of all, those wishing to invest in bullion must have a significant high-net worth. Secondly, gold is sold on the international markets and between private individuals and corporations. If the hallmark (age) of the bullion is over a certain date, it can’t make money – so it has to be smelted every three to four years. So what volumes of bullion is this poster recommending as an investor? Where is it stored? He does not tell you that the paper to the bullion is changed all the time with the international sale of the bullion. It is in Switzerland, Hong Kong, Germany, where? Who owns the consignment of bullion that the investor is investing in? What protection does the investor receive?
I have been involved in investing and trading of gold bullion for a number of years now and there are huge pitfalls with naive investors getting into “investment” programs pertaining to bullion. Right now, there are major international law enforcement agencies monitoring who is buying, investing, and moving gold. Why? Iran can only purchase its nationally required commodities with gold bullion. They are buying up tons of gold stored in various financial institutions around the world to pay for their domestically utilized goods/commodities. The law enforcement agencies want to ensure that no gold is being moved from Europe, the US, the Far East to banks used as covers for Iranian government agencies. I would just inform people to think very clearly of the dangers of getting involved in this kind of investment purchase. It is very dangerous and one in which most potential investors will lose a lot of money. Of course, they won’t be informed of this until it is too late.