Gold investment for portfolio diversification

 

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Gold investment for portfolio diversification

Author: Dreeme Kochi

At a time when financial heavy weights are on the brink of a disaster, it seems natural that attention seems to have moved to the one currency that is in limited supply – Gold. Gold investments have become more lucrative than any other time in history. Gold investment is a foundation asset within any investment portfolio. In difficult times, investors seek to protect their assets in the form of gold investments. The stability that gold provides has remained constant for centuries. In the fact that it has no default risk, gold investments offer investors a guarantee against drastic movements in value of asset classes. 

Traditionally, investment portfolio’s have assets such as stocks and bonds. Diversifying into gold investments can protect you against fluctuations in other asset classes as risk factors that affect gold are quite different from those that affect other assets. Portfolios containing gold investments are more solid and less volatile.

Over the centuries Gold has acted as a hedge against inflation. Value and purchasing power of many currencies have declined in the past, mainly due to the rise in prices of goods and services. Investors often diversify their portfolios into investing in gold to counter the effects of inflation and currency fluctuation.

Gold and investments in gold have proven to be the most effective hedge against weaknesses in the dollar. The dollar is the world’s main trading currency and a rise or fall in dollar prices effects gold prices. At a time when the dollar is steadily weakening, gold investments are proving a hedge.

Gold is also less volatile than many other equity indices. It tends to behave more like a currency. To reduce risk in your portfolio investing in assets with low volatility is necessary.

The price of gold swings in the demand and supply balance. Even though the demand for gold and investments in gold has been soaring, long lead times in mining translates into inelastic production of gold. Investments in gold have shown a steady rise recently, fuelled by the rise in incomes of people in key world markets.

All these factors have contributed to gold investment being the most sought after investment in this century. 

Gold loans are the best option for borrowers needing quick liquidity and intending a pay back within a year.

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Article Source: http://www.articlesbase.com/loans-articles/gold-investment-for-portfolio-diversification-5396274.html

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20 Responses to Gold investment for portfolio diversification

  1. Justin says:

    These answers should be from the CFA institute under their ethical conduct… These are two other questions:

    ~How does the Code of Ethics relate to these funds and to investing in general?

    ~In  investing  and  in  handling  investors’ money,  what  role,  if any,  should  moral  
    social convictions, and/or political correctness play?

    Please show sources if possible.. Thanks!

  2. Anandganesh says:

    Hi planning to invest some money in chit funds as I heard that It is giving high interest rates. Can anyone help me whether it is the wise way or all chit funds chea????

  3. Aaron says:

    i know little about how the market works, but am looking to invest some money in penny stocks. preferably a site with no minimum.

  4. ilovebasketball says:

    Many people made millions and billions before 2008, can people still do the same now in days? Has anything changed, not allowing people to abuse the system, and etc.? Thanks!

  5. BillTakesSchitz says:

    I have thought about doing it although it does seem like a losing proposition to me but I would like to learn more about it. I would appreciate any tips/suggestions/websites.

  6. N says:

    I’ve been reading about people investing their money in metals, gold, coins, etc. to have their value secured when the U.S. economy goes all “digital” (plastic money or something of the sort) or just that cash loses it’s value greatly.

    Then there’s people that also say they wouldn’t keep their money in banks. Is that bad or good? Would not keeping my money in banks affect the economy? Is it better to keep cash at home then or invest it internationally?

    Is it wise to open bank accounts in different foreign countries to keep it “dispersed” and when one country’s economy falls, it won’t be a big hit to the person that did so because he/she still has money in the other accounts? In what countries would it be best to invest money?

    If I have a good amount of money saved, should I be investing it in certain things that over time increases my amount of money, like stocks or bank investments? if so, what would be a good example?

    Thanks

  7. LizPierce says:

    What is keeping Americans and other people around the world from investing their capital in countries in Africa? Are people skeptical over the pace of Africa’s growth? What makes some African countries more economically successful than others? What’s into the future for Africa? Thanks!

  8. Justin says:

    Since Obama was elected Tuesday, most stocks have dropped. Smith & Wesson increased though. My question is that should I invest in .INX stock, S&P 500? -BC they are doing pretty bad right now. They will be back up? If not what stocks do YOU think are gonna rise?

  9. Peter says:

    I have an AR-15, and a Walther P22.
    Id eventually like to suppress both.
    As money is an issue, would you advise getting one can for both( a .223 suppressor), or just start with a .22lr can?

    I have been doing my research on the suppressor selections, but i still have yet to come to a conclusion. Which would you prefer?

  10. ARUNA says:

    Australian resident have experience in dentistry wants to become investor cum employee .dentist wants to invest in any existing dental clinic upto 100000 $ anywhere in australia . In any existing dental clinic.
    Preferred source of contact is through mail shivveshkumar@gmail.com.

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