Gold: The best investment

A couple of weeks ago I said about the importance of gold as an investment. You can read it here. Do you know that the gold price is increased by $200 per ounce, thats an increase by 12.5%.

This increase is due to the shaky stock market. Gold moves opposite to the market. Its the safest investment. Now its getting close to $1750. I think for now it will not increase as it did in previous two weeks. It will move slowly and its the best time for people to buy gold. It will take another month to increase at that speed. You can buy gold bar or gold coins. I am happy that I invested in gold instead of shares.

Gold is consider as the best investment. It helps you during any crisis. Unlike shares and other type of investments, you dont lose anything in case of loss(which is not possible). You will have a minimum guaranteed amount.

Gold as an investment

Image via WikipediaAmong all the prescious metal, gold is the most popular as an investment. Gold is used as an investment from years. Throughout the history of the human civilization, old has played an important role in the currency and trading activites. Gold helps you during major crisis. History is the evidence. In all the major crisis like world war, inflation period or any other economic crisis. Even when the stock exchange fails, gold helps you.

Gold helps you anytime. It can be bought and sold anytime you want. If you don’t wanna sell your gold, you can get a gold loan. The increase in th price of the gold will be more than the interest you pay.

My dad gave me some money to buy a new car when I was in the first year of the college in 2007. But I bought 20 pounds of gold instead of a car. I got a gold loan for that 20 pounds of gold and bought another 10 pounds of gold from the loan amount. Today the value of the gold I have is more than three times the amount I paid for those 30 pounds. That day the only thing I thought was that if I buy a car then I will pay three times the value of the car untill in the next 4 years on gas, service and maintainence( the four years for my graduation). 

 The price of the gold depends on some reasons like demand, central bank, industral needs, short selling, war or national emergency etc. the interest rate of the central bank and the price of the gold are interdependent. When the interest rate increases the gold price decreases and decrease in interest rate will increase the gold price.

The most traditional way of investing in gold is buying gold bars. Another way is to buy gold coins. The gold bar genrally carries lower price premium then the gold coins. But the gold bars carry risk of forgery due to their less stringent parameters for appearance. Buying jewelleries is another type of investment. It can be considered as a investment as well as a form of adorment.

For gold investors, gold certificate helps to avoid risk and cost associated with the transfer and storage of the physical bullion. Bank may issue gold certificate for allocated and unallocated gold. Unallocated gold certificates are a form of fractional reserve banking and doesnot guarantee an equal exchange for metal in the event of a run on the issuing bank’s gold issuing.

Many bank offers gold different kind of gold loan where gold can be bought and sold like a currency. People has to pay tax at some percent of their profit to the government. The percentage depends on their investment. From January 1, 2012, all the purchases that exceeds $600 per year will be required to fill IRS tax form 1099 due to section 9006 of the U.S Patient Protection and Affordable Care Act.

Riskless Investments

Investment is putting money into something with the expectation of gain, that on thorough analysis, has a high degree of security of principle, as well as security of return, within an expected period of time. Everyone invest his\her money somewhere. Investment also involves risk. The risk level of the investment depends on how much money is involved and how much return does we expect from it.
But many of us are either afraid to invest or dont know much about investments. For those people  their are some risk free investments.

1. Bank deposits:   The easiest way to invest your money. Even though its doesn't give much returns like other investments, its still a better option. You can use the CD i.e Certificate of deposit ( or term deposit). It offers a higher interest rate and is virtually risk free.
2.Retirement plan(401k): Investing in your retirement plan is a best place to invest. Its very useful if we utilize it well. Many of us realize its important very lately, when we have few years for retirement.
3. Real estate: Investing in the real estate is never considered to be a waste. Every year the value increases. Even though it is risky while buying it, but if you own it, its never considered to be a loss.
4. Gold:  It is been used as an investment from years. Of all the precious metals, gold is the most popular as an investment.^[1] Investors generally buy gold as a hedge or harbor against economic, political, or social fiat currency crises (including investment market declines, burgeoning national debt, currency failure, inflation, war and social unrest.) Its known to everyone that whenever their is a crisis like war or stock market crashes, gold value increases. As per my analysis gold value is increasing at the rate of 30% p.a.
Their are plenty of ways to invest your money but these are simplest risk free investments for people who either are not ready to take risk or don't know much about investing.