Gold investing, believe it or not, is still considered a standard for monetary exchange in many countries to this day. Gold is probably one of the most liquid investments and is traded in the stock market 24 hours a day everywhere in the world. In other words, this means that you can buy and sell gold in just about every country. There are different formats you can choose from gold investing, such as gold bars or coins, gold accounts, gold mining shares, gold stock, gold futures, and gold certificates.
Gold investing, as compared to other market sectors, can be quite complex and intimidating for investors who have not yet researched it in depth. Gold investing stands out as a diversifier and with your stocks, bonds and cash, gold can help offset variations in the market. There are a lot of financial consultants that recommend having at least 5% of gold in their stock portfolio. Some gold investors believe that a reasonable distribution of gold in a moderate, diversified portfolio is 5% to 15% during a bull market in gold and is 1 to 3% during a bear market in gold. This allocation will provide stable insurance for your stock portfolio, portfolio diversification, and excellent long-term return on investment. With gold up in price 23% in 2006, gold investing offsets weakness in other investments.
Gold is in a bull market because its core investment fundamentals are so outstanding. The gold price, like every other commodity or stock, is ultimately driven by supply and demand. When gold investing, coins are a popular way to invest as they are easy to buy and sell. Gold bullion coins are priced according to their weight. The most popular bullion gold coins are the South African Krugerrand, the Canadian Gold Maple Leaf, the American Gold Eagle and American Gold Buffalo.
Traditionally, gold investing has provided the best protection against financial disaster and turmoil. In circumstances such as currency deflation or high inflation, gold investing offers you both safety and security. The extent of the upside potential for gold is a function of the amount of paper assets that would be sold off and converted to gold, in the event of a financial catastrophe. If you have only paper in your stock portfolio, know that gold tends to move in the opposite direction of paper investments when stock trading.
Gold investing in gold mining shares is when you invest in the mining companies searching for the gold and not in the gold directly. The appreciation potential of a gold share is depending upon the future price of gold. When gold investing, it is important to note that many mining firms sell their future production years in advance. This means that with gold mutual fund investing your risk is more varied. Some funds offer a broad mix of international mining stock.
Diversifying into gold during troubled times, provides long term investing protection for your entire portfolio. Gold investing should be based on macroeconomic considerations and investment atmosphere. These days, people are buying gold to protect their strong portfolio from a currency crisis, inflation, recession, and the fear of stock market crashes caused by economical and morale catastrophes on American soil.