You do not need specialist knowledge to understand that we are living in a prolonged crisis whose outcome is not foreseeable. You do not need to read Wall Street Journal to understand the mechanisms at work or their causes. Just plain TV or large headlines in any newspapers or less than that: your experience at work, firings, smaller pay checks affecting you, your family or neighbors or acquaintances will suffice for you to feel the dimension of this seemingly never ending crisis. Faced with that, the most vital question an instinct of survival or the desire to have a future will give rise to is plain and simple: how to preserve my wealth or enlarge it, in business terms what should I invest in?
For most of us, currency is the epitome of value: when keeping it, capitalizing on it or exchanging it for other values such as goods and services. Unfortunately, that is nearly over now, and a strong driver of the present crisis. Governments gave up the gold standard in favor of this mundane value, have overprinted money for decades and this monetary craze brought us here, in full-swing crisis. There are two big problems with currency: one is that it is not supported by any physical value, and the other that is a subjective value that the governments may change or regulate, therefore depends on the human factor, which is obviously, historically proved, fallible. None of this is applicable to gold, and this is what makes it unique among assets: politics has no grip on its value: it falls or it rises with the interplay between supply and demand. Ironically enough, although its condition is timeless, it seems the sole genuine asset of free markets.
So, if you want to defend yourself against a decrease in purchasing power, deflation, financial bubbles, currency crashes, the volatility of stock markets, you name it, all you have to do is invest in this perennial value, which is plain and simple value, no matter what. The next question you have to ask yourself is how you should invest in gold, what form is the most efficient.
Even if you do not have any experience, you may buy some gold bullion and own it. This is the most direct, physical form of investment. Of course, you will not get a quick return, but you may preserve your wealth intact and in troubled times it’s a first step. The cheapest ways to purchase gold are sovereigns, kruggerrands, other minted coins or simple bars. The first three are the best suited for small investors, while the last for large investors. If you want more than just to preserve, you intend to capitalize on their value, you may follow price changes, selling and buying accordingly.
However, there are better forms of gold investment, if you are inclined to speculate. Everything depends on what kind of investor you are, small or big, new or experienced, lay or specialized and on your appetite for risk. If you don’t have one, you would not go further than gold exchange traded funds, this portfolio being not exposed to changes. If you still want to remain in touch with the physicality of gold, you would invest in gold stocks of gold-mining companies. If you are willing to take risks and gamble for huger profits, you would invest in gold options and futures. But we meant to make gold investment simple for you. Or these are too sophisticated, and why you trusted gold in the first place is because of its physicality and permanence.