Voices in Finance » gold price

Where Can An Investor Feel Safe In 2010?

J. Hamilton Fraser — Mon, 05 Apr 2010 16:56:15 +0000

Stocks have gone almost straight up for about a year now and it has to be making more than a couple of people nervous. If you were lucky or smart enough to have bought into the market most anytime in the last 12 months, you probably have a good gain. Anybody with new cash to invest though, might be wondering how long this may keep up?

The current price of gold is also at a very high point and that might lead you to question whether or not it is too late for that sort of investment. With interest rates so low, there simply aren’t many choices for any investor that is looking for a reasonable return without too much risk. Gold is viewed by many as a hedge against inflation and hard times and we certainly have that right now. It does seem though, that gold cannot keep up its torrid pace higher and higher.

Anyone who has invested cash in stock shares most likely knows the awful feeling when everything starts to go south and on a regular basis turns out to be a loser. When you put new cash in, you always must be prepared for the chance that you will lose money. With so many optimistic months in a row behind us and a lot political uncertainty at every turn, the market may be set to go back down. Jobs are still very hard to get, house prices have not begun to rebound, and the United States is in so much debt it is astounding. Those aren’t positive things for the stock market and our economy.

Anything you will be able to learn from studying “stocks for dummies” type books will tell you how to technically do it but not how to decide what to do and when to do it. Picking successful stocks, knowing when to put money in, and when to take money out is something that may be more instinct than something that can be taught. Choosing good stocks is difficult enough in normal situations but it might be near impossible when the whole market goes down. It seems that some hard times might be ahead in 2010 and investing with caution is the prudent thing to do.

How Does the Economic Crisis Affect Gold Investment?

J. Hamilton Fraser — Thu, 25 Feb 2010 14:00:52 +0000

Since ancient times gold has been linked to inflation. It is not that the price of gold doesn’t fluctuate, it does, but in the long run gold has always maintained its value. This is why in times of crisis, risk averse investors flock to gold, to hedge against uncertainty.

Is Now a Good Time to Invest in Gold?

When inflation is high, investing in gold is prudent. Many observers believe that with governments heavily expanding their budgets, to get the wheels of the economy running, inflation will, indeed, rise. This would suggest that now is the right time to put some of your capital in gold.

However, remember that there has also been a credit crunch. People find it harder to loan money than they used to. This will tend to dampen inflation. Thus, while gold investing might be a good idea, investors should remain somewhat cautious.

How to Invest in Gold?

If you have decided that you want to hedge against coming inflation, your next step is to find out how you want to invest in gold. The truth is, options abound.

One way, that might not be all that practical, is to buy actual gold and store it. This will be attractive for some, since actually having gold might be fun, however, financially speaking, it might not be the most rational choice.

Another way to invest in gold, is to invest in gold mining. This can be done by buying individual gold mining stocks or by buying shares in gold ETFs with a portfolio of gold mining stocks. The first option offers higher risk but also higher reward.

Finally, you can invest in a gold ETF that aims at tracking the price of gold. For many this offers the best compromise between practicality, risk, and rate of return.

Securing Peace of Mind

If the economic crisis is making you uneasy and you believe the actions of governments and central banks will lead to significant inflation, forget about forex investing and other volatile markets. Now might be the time to invest in gold!