Throughout its history, gold has been considered a reliable store of wealth and protector of value. In fact, even today some refer to the yellow metal as the only true form of money there is. Although gold certainly has tremendous upside price potential, there are other reasons – arguably even more important reasons – to build a significant allocation in gold. Here are three of the simplest, yet biggest, reasons to own physical gold:
Fiat Currencies Fail
History has shown time and time again that fiat, or paper currencies, fail over time. Think about it for a moment. How can a piece of paper really retain its value when that value has nothing to back it up? The value of a dollar, for example, is what the Fed says it is. With nothing behind it, dollars can be created out of thin air and their supply adjusted with some simple keystrokes. When a central bank “prints” money to expand the money supply, the value of each unit of currency declines as supply rises.
Physical Gold Has Zero Counterparty Risk
Unlike paper assets, physical gold has no counterparty risk. Gold cannot go bankrupt, default, or manipulate its books to suit its purposes. As a commodity that is desired and valued all over the globe, the value of gold is simply the value of gold. There are no potentially hidden dangers when buying an ounce of gold, in fact, your risk is simply limited to the amount paid for the gold. Compare this to an investment in corporate bonds, for example. If a bond issuer defaults, you lose your investment and have nothing of value to show for it.
An Invaluable Resource for Portfolio Diversification
Gold shows little to no correlation to traditional stocks or bonds. Although the metal; can at times move along with these markets, it has a tendency to “do its own thing.” Because gold has little correlation to these other markets, it can be an invaluable resource for portfolio diversification. Not only can gold potentially help achieve higher returns while smoothing out volatility, but it comes with several bonus features as well. As a dollar-denominated asset, gold may potentially also provide a significant hedge against a falling dollar or rising inflation.
Why You Should Build an Allocation in Gold
The reasons listed above are some of the simplest, yet most powerful reasons to maintain a large allocation in gold. Adding this unique asset class to your portfolio has also never been easier. Simply pick up the phone and speak with an Advantage Gold account executive today about these and other potential benefits of gold ownership. Our associates are there to answer any questions you may have and can even show you how to build a significant allocation using an IRA account.
Don’t wait for the dollar to lose more value or for the next major collapse in stocks before acting. Explore your options for gold ownership today. Call Advantage Gold at 1-800-341-8584 to get started now.Tags: 401k gold, add gold to my ira, advantage gold, best gold companies, buy gold, counterparty risk, fiat currency, portfolio diversification