Invest in gold to build your financial fortress –
Dodge the headwinds and tailwinds

Despite the inflation moving northward and the stock market crash, things are certainly not rosy for the investors who are thinking of building a balanced portfolio. With the spiraling debt level in the US and the rumors of yet another financial fiasco in the year 2012-13, the Americans are worried about the ways in which they can make ends meet with such touch economic conditions. If you’ve accumulated a huge amount on your credit cards and you’re looking for some advice on debt consolidation, you should check the authenticity of the company as the number of scams is on the rise. On the other hand, if your motive is to make money through investment and use the proceeds to repay debt, you should certainly opt for gold investment. You approach any financial advisor and he’ll ask you to invest in gold as this excellently diversifies your portfolio and acts as an inflation hedge. Have a look at some reasons to invest in gold when there are many other financial assets.

1. Provides enough safety to the investor: As the US economy is extremely volatile, most investors are looking for ways to shift their investments to safer financial assets that can ensure surefire returns. Gold is something that doesn’t rely on the borrower’s resolution to pay just as in case of a bond or a stock. Therefore, you should invest in gold as there is enough protection from the risk of defaulting.

2. Acts as an inflation hedge: You must be aware of the fact that the purchasing power of most of the global currencies have decreased with time due to inflation (the rising prices of services and goods). Despite such changes in financial behavior within the nation, gold has consistently maintained the same purchasing power. This implies that the value remains constant in terms of the amount of real goods it can purchase.

3. Allows diversification of portfolio: Experts say diversify or die. Yes, this is the mantra of an investor, irrespective of the financial assets he is investing in. Diversification of assets protects your investment portfolio from sudden and unnecessary fluctuations in the value of a particular financial asset. Usually, it is seen that the portfolios include stocks, bonds and money equivalents but when you invest in gold and add this to your portfolio, it becomes less volatile.

4. Physical market of gold gets stronger: The physical market of gold is gradually getting stronger day by day and you can see this with the increasing acceptance of the jewelry shops and the designer products. This suggests that there will be enough acceptance of higher prices despite the financial condition of the people.

5. Gold can often be used as a hedge against the USD: This yellow metal, gold is often used as a hedge against the dollar as it is seen that when the price of the US dollar decreases, the value of gold increases. Therefore, you can be sure that no matter how much the economy suffers and the value of the nation’s currency falls, the value of gold will always be on the rise.

If you want to stay financially equipped, you should look forward to invest in gold in the form of gold bars, gold ornaments as this is something that offers you maximum liquidity. Consider the benefits mentioned above before you invest in gold so that you may be motivated enough. Instead of getting advice on debt consolidation, you can easily earn bucks through gold investment and build your financial fortress.

Article by Jason Holmes

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