Gold vs. The Stock Market Which is Truly the Better Performing Investment?

One of the biggest misconceptions in the United States economy is the state of the stock market. Many people base their faith in the economy on the performance of the Dow Jones Industrial Average (DJIA), often times because it has been publicized as the primary indicator of the direction of the market. Unfortunately for your average person, the DJIA is hardly as much of an indicator of the economy as it is hyped to be. The DJIA is a price-weighted, averaged listing of 30 companies, and is misrepresented as the whole market. In fact, not only is the DJIA an inaccurate indicator of the United States economy, but many experts argue that it isn’t even the most effective gauge for the health of the United States Stock Market. That title truly belongs to the Standard & Poor’s 500 Index (S&P 500). The S&P 500 is an index of 500 stocks, selected based on a number of factors: market size, liquidity (how easily a stock can be traded without affecting its price), and which industry it operates within.

So why shouldn’t you invest in the stock market? In order to understand this, it’s necessary to understand what it is. The stock market is, essentially, where shares are issued and traded to allow companies access to capital. It additionally provides investors with the belief that they are receiving an owner’s stake in the company so that they may receive a share of future earnings. In reality, though, the investor is receiving an unsubstantiated, un-backed promise based solely on the success of a company. Worse yet, since the stock market is driven by human interaction, the investor is almost always manipulated by the company’s executives, who have access to sensitive insider information.

In a heartbeat, a stable, multi-billion dollar corporation can hit rock bottom, leaving its investors in many cases with nothing to show for it. For example, in August of 2000, energy giant Enron (which had revenue in excess of $100 billion USD) had its stock peak at $90 per share. By the end of November of 2001, it was worth $0.61 per share. Here is the biggest pitfall with investment into the stock market: the worth of something deemed so valuable can literally become worthless. The saying of the stock market being this “high risk, high reward” place of investment still doesn’t hold, especially if you compare its performance relative to other areas of investment. Such an area includes gold, which is often mistakenly looked at as simply a safe investment with no high reward potential. Attached below is a simple chart outlining the performance of gold compared to the S&P 500, which clearly tells a different story:

Analyzing this graph, we learn two very important things. First, gold outperforms the S&P 500—the primary stock market indicator—by an amazing margin. Second, the stock market may not be as much of a “high risk, high reward” investment, leaving it only as a “high risk” investment. The bottom line is this: gold cannot ever be worthless, and it continues to outpace other areas of investment. It is always a good idea to buy gold.

Where should you invest your money, then? First and foremost, never put all your eggs in one basket—a diverse portfolio is always the smartest route to take. One of the best ways of diversifying your portfolio in such a way that ensures it always retains value is by investing in gold and other precious metals. Call United Gold Group at (800) 615-1513 today and talk to one of our Senior Account Executives to get on the right track to protecting you and your family for the future.

gold investment - Investing in Gold?

Gold is one of the oldest forms of showing who is wealthiest of all. Many battles have been fought over gold and other jewels. It has also been used as a form of payment throughout history and is used as a relative standard for currency equivalent to specific economic countries or regions.

It is for this reason; gold investment is one of the widest known way of accumulating for future. European and other countries implemented the gold standards during the mid 50s. Until the Second World War, these used to be dismantled to take care of the financial crises.

After the war, the wholesale gold bullion pegged the United States dollars to gold rate at US$35 per ounce troy. This resulted in a large amount of gold coins investment from people o all sections of society.

Since 1930s, the commonest benchmark for the gold price has been the famous London gold fixing. It is a twice a day telephone meeting of different representatives from the five major bullion-trading firms that also represent the gold dealers. The London bullion market has many wealthy dealers associated with it who make thousands of dollars by trading on the volatile nature of gold.

In addition to this, gold is traded continuously all over the world based on intra-day price that is derived from gold-trading markets throughout the world. Some of the factors that influence gold prices are the availability of gold in the market and its demand. This is very much similar to all other types of investments and commodities.

Many traders believe in creating scarcity by getting into unlawful practices such as hoarding. Though central banks and other official organizations all over the world keep a strict eye on the moment of gold, they still have only 20% of the total gold reserves.

gold coins - The Yellow Metal Sees a Steady Rise

Gold or gold coins have always been considered as an auspicious and valuable since centuries. The value of gold has never vanished during the past many decades even though other metals have more or less disappeared from the scene and for this reason, many people like to trade and buy gold coins.

The glitter of the yellow metal has made many people search for this treasure throughout the world. Yet, gold has never been out of value and quality during the number of years. Gold’s worth can be quantified due to its elegance, history, purity, and aesthetic sense over the years. It has been worn by Kings and Queens in the form of beautiful bracelets and necklaces, and often used as utensils in the palaces. Nowadays, gold can be found in ornaments, watches, mobile phones, clothes, shoes and many other accessories.

Today, gold is sold through retails banks, ornament shops, government approved gold coin shops and dealers, merchants and collectors. The wholesale gold bullion market is witnessing a huge rush of rare gold coins too.

There is a growing concept nowadays of certified gold that not only confirms purity but also considered full proof in terms of price. This type of certified gold comes in the form of gold coins and small bricks that are usually sold through banks or govt. licensed shops in the market. The gold coins are sold according the prevailing bullion rate in the market that shows the current price of the gold as per the market trends.

These coins are trendy, pure, and hold true value for money spent on them. You can use these coins as collectibles or can keep them for future investment purposes. The quality can be checked by hallmark of purity stamped as Karat on the back of the coin. Gold can be easily purchased and transferred from one country to another without any hassles. As such it is a truly international demand and presence, have a high liquidity, value does not get affected with changes in the economy.