Today, investing in gold and other commodities is occasionally seen by some investors as a little old and dated. However, what investor in their right mind would question such an investment? Especially if it was still producing a good yield on their original investment amount.
Gold has been traded among civilizations for thousands of years. Trading, as a whole, has been around for longer. The buying and selling of commodities is at the heart of people and communities around the world.
Gold, like some other commodities, are exhaustible. They cannot be replicated by machines. They come out of the earth, so there can only be so much gold in the world. Oil is another example of where there is an inexhaustible amount to be had.
Of course, other investment products, such as property can be built. There is a demand for it, but it the demand can be outstripped by the supply, simply by building more property. Gold does not have this supply problem. There is only going to be enough gold in the ground.
Historically, gold has always represented a great investment that holds its value. It is seen by many as an investment which appreciates during periods of financial instability. Locally you may not be feeling the financial squeeze. However, globally, we are still in that period of financial instability.
It is not just financial instability that will cause prices in gold to flux. Any instability can have investors rubbing their hands with glee. Political tensions, wars or military coups can all signal gold prices to flux greatly. It seems to work best for gold investors when there is some instability around the world. No wonder gold was used by wealthy investors to bargain for the escapes from such turmoil.
Gold is also one currency investment which has no liability attached to it. That is why it makes such an attractive proposition for many companies. It also makes an attractive investment proposition due to its links to wealth. Although banks may trade, and goods are paid for by paper. Most banks and economies around the world still have gold reserves. Therefore, there is a link between these gold reserves and the wealth of a country.
Gold is not like other investment products. So, investors have been using it to diversify their investment ranges. Property, currency and some other commodities can shift greatly over a short period. Therefore, it makes great investment sense to stabilize any investment portfolio and include gold.
As time passes, will gold ever be the commodity of choice for investors?
Who knows what the future holds? Who knows what will happen politically or financially across the world? However, we do know, from previous years and historic results, that gold can hold its own. However, like most investments, it performs best for investors when it makes up one of a number of investment products within a portfolio. Of course, this makes sense. Who puts all their eggs in one basket anyway?