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Why invest in precious metals

August 11, 2010 by  
Filed under Silver Investment Basics

Why is investing in precious metals such a good idea? There are too many reasons to be all-inclusive. The best reason is that due of current economic and world events it’s the only place park your money. Uncertainty has become the common theme and we are told to believe that the situation is getting better, but the its hard to believe from current events. These days to invest in the stock market you need nerves of steel and a supply of antacid medicine. The past ten year return for stocks has been 0%, that is if you were not lucky enough to invest in the Nasdaq in 2000, which has not recouped 50% of its value in March 2000. The truth is that returns for stock during the ten years was negative when you factor in the effects of inflation.  This was during a ten-year period when corporate profits and real estate was growing substantially. Now, that the world economy is in recession and both the real estate market and corporate profits are falling, stocks are not asset class to invest in.

Gold on the other hand has gone up four times in price since 2000 as investor realize that the precious metal because they feel it is represents value. On a historical perspective when adjusted for inflation gold is still undervalued.  Investors are now purchasing more of the precious metal as both as an investment and hedge in uncertain times.  The trend is clear, as nations such as China and India have made large acquisitions recently to protect their wealth. Gold is a depleting asset and limited in supply, mining production and new fields have been decreasing putting/exerting greater pressure on the price of the metal.

The trends in gold are evident/clear and with each passing day as economic uncertainty increases additional investors are flocking to gold to both invest and protect their wealth.





Max easly is a trader with 30 years experience


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