Gold Investing for 2014 and Beyond

Gold investing for 2014 remain strong because it continues to remain a time-tested proven method for preserving purchasing power for the investor. The purchase of gold still protects the worth of currency earned in today’s markets while maintaining its value long into the future.

Gold Investing 2014

Gold Investing 2014

By researching historical data, investors have long known that the worth of gold tends to fluctuate in waves, while increasing in value overall. This has remained a solid statistic over the last seven decades. As a monetary precious metal, gold performs extremely well during times of economic uncertainty. Additionally, when an investor owns the physical asset of the precious metal, the gold serves as the perfect solution for diversifying their portfolio. During times of prosperity, gold also tends to increase in value by the escalating demand caused by jewelry makers, electronic manufacturers and other consumer industries.

Worldwide Liquidity

Gold investing for 2014 will likely remain a solid investment strategy because the precious metal’s market is still an ideal platform for worldwide liquidity. This means that gold remains an investment instrument that is easy to buy, store, and resell at locations around the world. Because gold remains high in price for each troy ounce, it is still the ideal solution for transporting and storing wealth, and passing it on to future generations. In fact, investing in physical asset gold provides an easy solution for converting it back into cash, or bartering the product for services and/or goods.

The Lowering Spot Price

The spot price of gold escalated to an all-time high in the fall of 2011. However, since the beginning of the second quarter of 2013, its spot price has pulled back somewhat, creating head and shoulders charting with strong, well-defined signs of heavy resistance and support. Its low point in July 2013 became an ideal “buy-in” point for perceptive investors that were paying attention to the market. By year’s end, with signs that the dollar was continuing to weaken, the appeal of gold brightened, once again stirring excitement in the well-informed gold investor.

Looking Ahead to 2014

The adjustment in the spot price of gold was hardly unexpected. With an uninterrupted run up session that lasted for an extensive amount of time (2001-2011), a correcting/consolidation was not much of a surprise. The retreat of over a 20 percent loss over its all-time high is well within historic norms.

Even though the gold market has been bearish for much of the last two years, many gold analysts continue to be staunchly bullish on the precious metal. Many believe the correction/consolidation has finally been played out. History shows this “correction” to be nothing new. In the mid-70s, gold fell 50 percent, only to rebound to appoint 850 percent higher in the years to come. This is why long-term investment strategists are eagerly investing in gold in the market, to take advantage of the current low prices of the precious metal.

Making a Purchase

Because most analysts recognize that gold investing in 2013 remains strong, it is crucial to consider exactly how much of a gold product to purchase. While every investment strategy is unique, financial advisors often recommend a diversity of 10 percent to 25 percent of the total investment portfolio to include precious metals, especially gold. Many wealthy individuals maintain a minimum of 10 percent of their total wealth in a wide assortment of precious metals, leading with gold, and followed by silver, platinum and palladium. This diversity serves as an effective strategy for diversifying a portfolio against future financial calamity caused by economic crises, and for hedging against a declining dollar.

Varying Gold Instruments

A well-informed investor can purchase gold in a variety of different instruments. This includes buying gold stocks and funds, provided by brokerage firms. These gold financial instruments are often acquired as a stock or mutual fund, offering the investor instant liquidity without the need to hold onto a physical asset possession.

In addition, investors will often take physical possession of gold by purchasing bullion bars, ingots, rounds and coins. In general, bullion is struck at 99.9 percent purity that can be bought and stored in a safe or safety deposit box. This type of investment maintains its worth based on gold’s daily spot price, minus any premiums for the purchase, and/or when converting it back into cash.

In recent years, the government has allowed investors to convert an existing IRA (individual retirement account) into a self-directed gold-backed IRA. This allows for the investment of physical asset gold and other precious metals. This type of IRA provides the opportunity for the investor to purchase gold and have the asset managed through a custodian or trustee, while held in an IRS-approved depository.

While the spot price of the precious metal gold continues to fluctuate each day, it remains a valuable investment instrument for maintaining an investor’s wealth, and creating huge profits.