Know Your Gold Investment

Investing in gold could use some variety of media such as gold bars (bullion), gold coins, gold certificates, gold savings, mutual funds with underlying gold mining companies, as well as commodity futures contracts in gold.

Pros & Cons Gold

Gold values tend to be stable and inflation has no effect (zero inflation effect). It is very rare that gold prices fell. Gold can also be used for the collection and jewelry.

Gold is also good to diversify. Suppose you have invested in stocks, bonds, mutual funds, property, or others; buy gold could be a good alternative. Moreover, in some countries reportedly declining gold production. Because of increasing scarcity of gold, surely the price will always rise.

Another advantage, the price of gold was set in USD. If an increase in the value of USD, you get two benefits at once, ie the increase in the dollar and rising gold price itself. However, if the opposite happened, it could be a double-edged sword.

When compared with investing directly in USD currency, gold is more profitable. In Indonesia, money changer currency appreciate cheap long output or folded currency. Not to mention there is a risk of false serial number. As a result, save the CAD currency must always be updated. Unlike the gold that can be bought and taken any action for a while.

The downside, especially in terms of storage and handling. Save a "hard assets" like gold is relatively risky and expensive. In addition, if the storage is less good, though covered with protective cover, allowing the oxidation and discoloration. Special-shaped gold coins, if you fall, dented, or chipped, it is difficult to be repaired again and can reduce the price. If I say, gold is less suitable for those who are careless or reckless.

Other deficiencies, the return is relatively stable and less exciting than stocks or property. Also, it is not advisable to invest in gold only in the short term (1 year or less). So, based on the strengths and weaknesses, in my opinion tend to be more appropriate gold for "hedging" than "investments."