The precious metals gold and silver have been tradable goods since ancient civilization and have remained the most popular metals for investment purposes. Over the last several years, more people have been investing in gold and silver due to a variety of reasons. California Gold and Silver Exchange (CGSE), a business that specializes in buying and selling gold and silver coins, cites the five most common reasons that people buy gold and silver. |
Market timing can be difficult for any investment, which is why investors do not only focus on day-to-day price movements when investing. They also seek to diversify their portfolio as diversification allows them to protect their portfolio in case one of their investments does not provide favorable returns. Precious metals’ low correlation to other assets makes them an ideal investment for people who want to diversify their portfolio. Since the prices of gold and silver move independent of stocks, the prices will not drop even if stock prices go down. According to California Gold and Silver Exchange, individuals who plan to retain precious metals for at least 3-5 years should examine their historical performance in relation to other investments to avoid losses.
Investors also buy gold and silver as a hedge against inflation. The price of precious metals generally increases as a currency weakens. In the 1970s, gold and silver prices shot up when price inflation reached 13%. After the Federal Reserve brought inflation under control, much of the gold and silver bullion and coins were sold and the returns were put back in paper investments. Many investment experts continue to argue that the prices of precious metals will increase in a period of high inflation.
Another common reason people invest in gold and silver is to preserve their wealth. The purchasing power of paper money continues to diminish over time due to immense monetary expansion programs. Since the creation of the Federal Reserve Bank in 1913, the dollar has already declined by 99%, and many people believe that it will eventually become worthless. Having too much savings in the bank can be a growing risk for investors. To counter this, investors have been buying gold and silver as precious metals have maintained their purchasing power throughout history.
Since the stock market is extremely volatile, U.S. stocks are often considered a risky bet by many investors. Company earnings rise and fall depending on the economic cycle and how businesses do. If a company goes bankrupt, investors may lose their assets. To avoid this, investors turn to gold and silver to hedge their positions.
People also buy precious metals to prepare for an economic meltdown. Gold and silver generally have the same recognized intrinsic value anywhere in the world, which means that they can easily be used for bartering or trading if the world reverts back to trading in commodities.
CGSE says that people buy precious metals for reasons other than financial purposes. Some buy them to display wealth and power while others use them as family inheritance. www.cagoldandsilver.com
About California Gold & Silver Exchange
California Gold and Silver Exchange (CGSE) is a family-owned and operated business that buys and sells precious metals like gold and silver. Based in Southern California, they offer gold and silver bullion, rounds and bars, and provide one of the highest payouts in the area.
California Gold & Silver Exchange
Address: 130 S Mountain Ave, Upland, California 91786, United States
Phone: (909) 985-4653
Related Articles -
California, Gold, and, Silver, Exchange,