Gold is still soaring, after record highs, it is hitting record highs again. Gold has been a unit of value, a currency, for longer than the economic systems that we have now. The same economic systems that created the global credit crunch. Fiat or paper money is a loose system whereby the actual value of the paper issued has nothing to really do with the face value of that paper. Dodgy investment strategies lead to massive risks being taken and the outcome was the economic crash. Gold is a metal and whilst the sale value may outstrip the metal value gold is still a safer bet than paper based investments. So how can you get some gold?
- Contact a reputable gold firm
- Buy for the long term
- Don't go all gold
A diversified investment strategy is key to managing your risk. The subprime crash was caused by diversifying through asset classes rather than across asset classes. In short lumping different mortgages together is through the class and does not spread risk. Likewise with your investment strategies, to quote the cliché, don't put all your eggs in one basket. A judicious mix of types of asset including gold is safer than putting all your money into one thing. Gold will continue to be a fall back for as long as the global economic uncertainty continues.
There has been very little in the way of legislation to curb the excesses of the fiat system and it is entirely possible the entire cycle of risky investing followed by a crash can occur again. In South Africa we do have some legislation to protect us in the form of the National Credit Act, which enabled us to partially decouple from the global economy, but we are still linked in and prey to the vagaries of outside influences of which we have no control over. It may be a case of buying high now, but gold is expected to remain strong, and the global economic travails are not going to disappear tomorrow.