Online Stock Trading Tips

The reason why you are reading this article because you need to know why you should invest in gold right now. Gold is a precious metal that is commonly used in jewellery, coins, electrical conductor, etc.

The following are the positive reasons:

1.) In times of recession, stocks will fall so as the value of money. This means all assets could be seized or virtually zero because of recession. If you keep gold, you can use this to buy something in the recession where all cash is virtually worthless.

2.) When the economy is in bad times because of war, disease, etc. Stock price will fall but gold will increase in price. It is because the demand is great.

3.) Gold does not depreciate in value through time. Gold prices might fluctuate, but the overall trend of gold is increasing prices. Never in the history of gold prices that it went down drastically.

See the price history of Gold:

4.) So if you are afraid that the overall value of your financial asset will decrease because of the economy (like if the purchasing value of the dollar will depreciate a lot), the best way is to put your money in gold because it is not affected by an economic crisis.

5.) Unlike oil which are consumable resources (it will be depleted any time soon thus becoming an obsolete investment), gold is not. After being mined, gold is not consumed but transformed into different forms such as coins or jewellery.

With the outlined above reasons, one will think: “So how will I be going to invest my money now that I understand the importance of investing in gold?”

The best answer is to split your investment portfolio and adjust it according to the economic situation.

The rule is to allocate higher % of gold in the portfolio during bad times and lower it in good times.

For example, since today the economy is not good, you might want:

% of asset invested in stocks = 30%
% of asset invested in gold = 60%
% of asset invested in others = 10%

But when the economy fully recover (starts of obvious bull trend in stocks), you might invest as follows:

% of asset invested in stocks = 60%
% of asset invested in gold = 30%
% of asset invested in others = 10%

Related posts:

1. How much money do you need to invest in stocks?
2. How to invest money in Philippines stock market

This entry was posted on Tuesday, August 24th, 2010 at 3:50 pm and is filed under Money Management. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.