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Why Gold Is Considered A Good Investment

By Gorden Vester

Gold has always been a major investment, whether the economy is stable or not; but it is when it is volatile that many investors turn to gold over stocks or bonds. This seems to suggest that during times where it can be impossible to predict what the economy will do, gold is a safe choice of investment.

Gold is considered a ‘safe’ investment for a number of reasons. One important aspect of it is that is has a proven record of holding its value, throughout economic situations over hundreds of years. The value of gold did not vary anywhere nearly as wildly as the stock market, even during periods of economic crisis like the Great Depression and World War Two. This tried-and-tested history allows investors to feel more comfortable investing in gold, which will not stand to lose its value significantly, as opposed to stocks.

Another key point in gold’s security is that gold is not just an asset; it also holds status as a commodity. Markets such as electronics, which rely on gold for manufacture, are expanding rapidly and create a demand on gold. Luxury watch and jewellery brands are also a large part of creating demand as their customers are less likely to have curbed their spending in economic volatility, hence gold’s status as a safe investment that will not lose value suddenly or dramatically.

Gold has been a key part in establishing currencies all round the world over thousands of years. Due to this, gold is effective as currency worldwide and being internationally recognised, does not depreciate and therefore lose money for investors. The dollar and pound’s values can change considerably depending on the economy and many other variables, whereas gold is not linked to a specific economy or government and its variations are less noticeable.

As gold is a hedge for inflation, it earns itself the reputation as a safe investment. While stocks and bonds are declining, gold and other hedges for investment stay the same or even increase in value, meaning that an investor is much less likely to lose money.

Buy Gold Bullion online.

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Article Citation
MLA Style Citation:
Vester, Gorden "Why Gold Is Considered A Good Investment." Why Gold Is Considered A Good Investment. 21 Aug. 2010. uberarticles.com. 28 Jul 2014 <http://uberarticles.com/finance/investments/why-gold-is-considered-a-good-investment/>.

APA Style Citation:
Vester, G (2010, August 21). Why Gold Is Considered A Good Investment. Retrieved July 28, 2014, from http://uberarticles.com/finance/investments/why-gold-is-considered-a-good-investment/

Chicago Style Citation:
Vester, Gorden "Why Gold Is Considered A Good Investment" uberarticles.com. http://uberarticles.com/finance/investments/why-gold-is-considered-a-good-investment/


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