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5 Reasons to Buy Gold

5 Reasons to Buy Gold

Gold is a secure and easy investment that should comprise a percentage of anyone's investment portfolio. While buying gold in the physical form of coins and bars is the simplest way to go, there are other more complex gold mining stocks and futures that are alternative ways to invest. No matter how you approach it, there are number of reasons to invest in gold.

1. Protect Against U.S. Equities and the Dollar

While bonds and stocks are vulnerable to inflation, gold provides a hedge against inflation since the price of gold negatively correlates with the dollar as well bond and stock returns. Not only does gold hedge against inflation, but it also can protect you in times of economic crisis. As we have seen in the last few years gold has continued to soar as the stock market tanked. Even with the market's rebound in the past year and half we have seen gold prices grown at an exponential rate in comparison.

2. Gold is Global

Unlike currency, gold can be purchased in one country and sold in another. There are no boundaries on gold and it be stored anywhere and hold its value. Furthermore, the demand for gold is global and has recently been on the rise in countries like China and India.

3. Gold Cannot be Printed

Whereas the treasury can print money whenever it feels the need, gold cannot be copied. There is a fixed supply of gold in the world and its rarity only protects its value. In fact, discovery rates for gold are declining and mines are becoming depleted at an accelerated rate.

4. There is Always a Market for Gold

Unlike particular companies or other commodities, gold is always easy to sell and so in times of need you can quickly get rid of gold, especially if you hold physical gold in the form of coins and bars. You can buy or sell one coin or many coins as there is never a restriction. Gold is extremely dependable and has numerous uses from jewelry, to medicine and even aerospace.

5. Geopolitical Safety

In a world increasingly under duress, gold offer financial protection from increasing geopolitical tensions. War in Afghanistan, recent conflicts between North and South Korea, the list goes on. I am not one of those people warning everyone to buy gold because doomsday is coming, but here is some comfort in knowing that gold will always maintain its value as a scarce natural resource despite what happens to economies and currencies worldwide.

Of course before you buy gold make sure to educate yourself and find a trustworthy gold broker. Gold should be part of everyone's diversified investment portfolio. The percentage of gold you own versus other stocks, bonds and other investment vehicles depends on your own circumstances.