Why invest in gold? There are many reasons, and in Part I of this article I outlined five good reasons to invest in gold: its high value, low volatility, concentrated wealth, portability, and value as a true asset.
In this thrilling conclusion, we’ll look at more reasons why investing in gold makes sound financial sense.
Reason #6: Gold comes in many forms
Gold is so popular and easy to work with that you can acquire it in many physical forms. While I don’t recommend investing in jewelry (high premiums) or gold nuggets (purity issues), you can easily purchase a wide variety of bullion types.
Gold bullion bars come in weights ranging from gram bars on up to multi-pound ingots. However, I recommend gold bullion coins, in particular the exquisite American Gold Eagles, South African Krugerrands, Chinese Pandas, and Canadian Maple Leafs.
If bullion isn’t your thing, you can always invest in an Exchange Traded Fund (ETF) or gold mining stock.
Reason #7: Gold is rare
There’s a very limited supply of gold on this planet. It’s been estimated that 60% of all the gold in the Earth is now above ground. Sure, that 40% is still down there, but it’s getting harder and harder to find and refine. (BTW, I share some really interesting info on why gold is rare in my Mini-Course. Why not check it out by subscribing now?)
Given its increasing scarcity, the value of gold can’t help but go up… at least until we figure out a way to go out into space and do some mining there. Even then we’d have to mine an asteroid, because the Moon is very poor in heavy metals. And when’s that likely to occur?
Reason #8: Gold retains its value and purchasing power
Since 1933, the same year FDR called in all U.S. gold and made it illegal for individuals to own the yellow metal, the U.S. dollar has lost 98% of its purchasing power. Gold’s purchasing power remains intact. Part of this is the fact that gold is a true asset; it always has value, no matter what.
On the other hand, a dollar is a promise made to you by the Federal government. It’s possible for that promise to be broken, whether deliberately or otherwise. Dollars are paper (or, recently, gold-tinted coins), with little or no intrinsic value. Not so with gold.
Reason #9: You can convert your IRA to gold
It’s a fairly simple matter to roll over an existing IRA into a gold IRA. All you have to do is find a gold IRA custodian, and have them walk you through the process. (We won’t go through that here). There’s no tax penalty for rolling over your money into a gold IRA, though some custodians might charge a small fee.
Now, be aware that you’re not going to be holding physical gold; the custodian does that for you. But fear not, because a gold IRA custodian can only purchase bullion of a high fineness. At times, it may take a while to make the purchase, because they’ll want to buy you the best gold possible.
Reason #10: Gold is popular in the developing world
The countries of China and India are home to at least a third of the world’s population — and the people of both countries love gold. It’s an integral part of their cultures, and in fact India is the world’s largest consumer of gold.
Both countries are developing rapidly; and as their citizens become richer, they’ll buy more gold, which will drive the price up.
See where I’m going here? You should seriously consider whether or not it makes sense for you to invest in gold today. Given its scarcity and the increased wealth in the world’s most populous countries, its value could well skyrocket in 10 or 15 years.
Agree? Disagree? Let me know by commenting below.