Is Gold a Good Long Term Investment?

By Jack Wogan

There has been a lot of discussion lately as to whether or not gold is a good investment. Gold depends on the slump economy; it proves to be a good hedge investment for the short-term, because you can make a huge amount of money in a short period, but you can also lose a lot in a short period if you do not make it on the right time.

Gold is a risky long-term choice. It has historically been hit by inflation over a period of time, for longer than 10 years. While some investors say that sky is the limit, others say that the golden bubble will explode.

Many investors think that buying gold is a good long-term investment because it is a steady investment and is a great means of having a liquid and tangible asset at your disposal. Historically, it has been treasured in value over time. Many investors want to invest in gold, because it has proven to be more secure than other investments over the years.

Gold prices have observed an upward trend in the past 3 years. Although the earlier decades saw a comparatively poor performance, gold prices are likely to rise gradually over the longer term,; but, it is just a speculation. Due to uncertainty in the stock market and decline in the US dollar, investors are captivating an entire fresh look at gold as an investment option.

As a long term investor, holding on to gold investment is not an absolutely good option. If you are planning to invest in gold, it would be better to confer with an investment consultant. An investment firm can assist in deciding the right choice of gold investment products so as to hedge your portfolio.

If you are planning to invest for a long term, you should consider something that consistently moves in the right direction. The average rate of return monitored, as far as history may go, has been better than 2%. It has increased up to 4.4% in the recent years. If you had invested your money in a good index fund, you would have earned on an average 12%, in those same years. So, in other words, gold is a pretty risky long-term investment, with a fairly average track record. Although it is doing very well at the moment, one cannot count on it.

There is a myth about gold that if the economy were to ever completely crash, your best reserve would be gold because it continues to keep its value. The problem is the timing. Gold has never been a good investment over the last 30 years, and it is evident that to buy gold bullion will bring profits that will be dead before we see the big move up.

One can look at gold as a speculative investment, insurance policy or core investment. As a core investment, it is a poor option. Over long periods of time, one would not be expecting the purchasing power of gold to change. It does not pay any amount of interest or dividends.

Jack Wagon is a gold investment consultant. You can take his help to buy gold bullion. For more information about buying gold you can visit his recommended site at http://www.goldmadesimple.com/

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