Since the financial crisis reared its ugly head in 2007, many UK citizens have suffered financial hardship. The uncertainty has left many wondering what to do with the money that they do have and where it is best invested. Property prices have of course plummeted and are still some way from their peak in 2007. In addition, many stock and share prices have fallen, leaving investors nervous. However, one commodity that has remained strong during the last few turbulent years has been gold. So why is this?
A law unto itself
When it comes to gold there is only one factor that investors need to worry about, and that is how the demand for gold is impacting on the selling price. With other investment vehicles you have to consider a range of other factors, such as interest rates with property. If you have shares in oil then you have to worry about stability in the country from which the company drills the oil. Then there is a chance that the company in which you have shares could be involved in an environmental disaster, which would see your share price drop sharply.
In contrast, gold is traded on its own merits. It is not linked to the power of any other currency or impacted upon by other markets. Plus, the fact that gold is a finite resource means that it will always be in demand. In fact, the demand for gold is greater than the amount that can be mined each year. A demand that is only going to heighten as the population of the world increases. So, whilst the returns to be made on gold may not be as great as more high risk investments; it will always yield some return if you are patient enough. A much welcomed security for many investors in these times of economic instability.
Investing in gold
The prospect of investing some of your money in gold may initially seem like a daunting one. Indeed, there are a few ways to invest in gold, including:
- Buying options and futures
- Exchange traded funds
- Mutual funds
- Junior gold stocks
The options listed above can however be somewhat confusing if you are relatively new to the world of investment. The alternative and more straightforward method is to invest by purchasing some gold bullion. Owning physical gold might seem a bit crazy, but we aren’t talking about huge bars of gold here. You can start of buying gold coins and then move onto ingots if you find that you like the idea of buying and investing in gold. Just be sure to put in place adequately safe storage before you buy and also to check that your insurance policy has you covered. Alternatively you can consider having your gold kept at a specialist storage facility.
Article is provided courtesy of UK Gold Bullion – buyers and sellers of a range of gold and silver bullion products.