Breaking Down the Myths and Facts about Gold Investing
First-time investors often shy away from gold, thinking it’s only an option for the excessively wealthy. Here are some of the leading myths about gold investing to shine a light on this valuable precious metal.
Bring up gold investing in a room of average individuals and you’ll either get a bunch of quizzical stares or a heated debate over the merits of gold bullion investing. Many people have been exposed to interesting misconceptions about gold investing, while others simply do not know enough about this option to make a sound decision. Let’s investigate some of the key myths about gold investing and show why this option is such a smart move today.
Myth – “You must have to be rich to buy gold.”
Most gold investment firms enable their clients to purchase gold down to incredibly small increments. This eliminates the requirement to hold stacks of gold bars or huge bags of gold bullion coins.
Myth – “Gold is a high-risk investment.”
If anything, investments that are based on paper currency valuations or are heavily involved in the equities markets are riskier. Gold is a scarce natural resource, in high-demand, and used by industries as diverse as the aerospace field, jewelry manufacturers, and the dental field. Gold has value as a hedge against riskier traditional investments, like stocks and bonds.
Myth – “It is difficult to invest in gold.”
This is a common misconception, though one that is easy to accept when you look at recent history. Gold wasn’t the easiest investment in the past, though today the idea of investing in gold and never having to physically touch an ounce of the metal is a reality. Gold brokers and specialized, secure storage facilities do 99% of the work for the investor.
Myth – “Gold mining stocks do better than simply investing in gold.”
While some mining stocks have done quite well over the years, it only takes a cursory glance at the real numbers to show how gold as a precious metal outperforms the companies involved in its extraction and processing. From 2000 to 2014, gold increased in value by nearly 309%. The HUI benchmark gold stocks increased 122% during this same time.
Myth – “Gold only increases in value due to fear and speculation.”
While gold is a powerful hedge against market uncertainty, there is nothing hollow or fake about the real need for a skeptical eye regarding the domestic and world economy. The U.S. has $19 trillion in outstanding debt and our dollar has lost significant purchasing power over the past several years. With the world economy looking as perilous as ever, gold demonstrates its inherent value – not one that is perceived or contrived.
Gold is a powerful investment tool that should be a part of any smart investor’s portfolio. The Gold IRA, or individual retirement account, is one way to leverage the value and stability of gold, while creating a long-term strategy for real wealth building. For more information on gold IRAs and precious metals investing, contact American Bullion today.