value of gold : Gold – The Sound Investment

The value of gold continues to grow. This isn’t speculation—this is an empirical fact. While your shorting stock trader may look at a day-to-day slide as an indicator of decline, this simply isn’t the case. Many people have been brought up with the notion that sound investment means investing in low-risk stocks. Unfortunately, a “low-risk” stock doesn’t exist—only “lesser risk” stocks exist; and usually, these stocks are ones that are so inflated in price that the barriers of entry for your average investor are just too great.

Even if one were to get their hands on one of these stocks, a single painful reality still exists: a stock can default, plummeting to something of literally no value. Sound investment, then, is investing in something that has been shown to produce a return and has never hit rock bottom.
One such asset is gold, and other precious metals. Investors shouldn’t be discouraged when gold prices take a slight dip. More often than not, the “economic experts” who urge people to remain upbeat and positive about the failing stock market are the same people who try to strike fear into people when gold so much as falls by a few dollars.

Take, for instance, one example. From an all-time high in June 2010 to a slight decline in July of 2010, gold dipped only 5%. On the other hand, during the same period of time, the stock market has dropped between 7% and 8% across each of the three major United States markets—with no all-time highs, and week-long slides. Yet you hear these same fear-driving experts telling unsuspecting investors to liquidate their gold and precious metal assets in favor of stocks that are likely to “rebound.”

Unfortunately, those who get caught up in this usually end up losing substantial portions of their portfolios and watch from afar as the gold they once physically held in their hands increases in value yet again. This is the simple truth: liquidating a long-term asset, such as gold, in order to invest in a short-term asset that is being advertised as long-term just doesn’t tend to work.

If you are actively investing in gold or are looking to enter the market, the best advice one can give you is this: do not be deterred by miniscule dips. These dips often provide a great potential entry point for new investors, but do not necessarily negatively impact investors who are looking to hold onto their assets for multiple months at a time, if not years.

If history is any indicator for the stock market, it should continue to be a volatile investment path. If history is any indicator for gold, it should continue to appreciate and act as a safe-haven for long-term, responsible investment.

Which would you rather bet your hard-earned money on?

For more information on gold stock investing, including how to get on the right path to diversifying your investment portfolio with gold and other precious metals, call United Gold Group at (800) 615-1513, and ask for a Senior Account Representative who will be more than willing to get you started.

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.