Gold: What Does The Long-View Look Like

Gold has always been a highly sought-after commodity—even in prehistoric times, apparently, it was coveted. It is mineral valued for its beauty and purity—but mostly for its exchange value. In periods of high market volatility gold becomes a repository for a different kind of value: faith. When the financial system looks bad on paper, value flees into gold.

Despite its repeated peaks in value, investing in it should be approached with caution. Those who know about the convoluted history of the precious metal have suggested that it is only possible to trade gold, not invest in it, due to the volatility of the economy. That said, it has been popular to capitalize upon gold’s potential during times of high inflation. Luxury goods like gold necklaces and Bertucci watches are rising in value due to market instability, which is certainly something for the adventurous to keep in mind when looking for an investment opportunity.

Devoting capital to any material whose value is reliant on times of instability, such as war or stock market decline, is a deterrent to those looking for a more guaranteed return on their contributions. Though gold has rapidly risen in value over the past several years – currently trading at more than $1,700/ounce – it is important to keep in mind that a decline in its cost is inevitable; it’s not if but when the bubble will burst. It is wiser to grow and protect wealth by looking for a good with a far better chance at steadily and concretely appreciating in worth, such as a mutual fund.

Though putting money into gold can help diversify a financial portfolio – that is, distributing wealth across a variety of economic resources and thereby reducing risk of loss – this goal can be accomplished by simply putting stake in a selection of opportunities that do not include the metal. Buying stake in gold and ownership of the same are wildly different animals. Gold will likely always be popular and made beautiful by its primary availability in jewelry manufacturing. Likewise, its shares in coins, electronics, and even the medical field (both in dentistry and for the treatment of various medical conditions) make it a reliable resource but not necessarily one whose value can always be counted on. Gold’s rise to prominence is unfortunately led by fearful investors instead of fueled by reliable fiscal data.

A reusable resource, gold’s reputation may further suffer simply given the prevalence of “cash for gold” outlets that hint at high returns on an initial purchase or gift. Just as one should be mindful of the adage “all that glitters is not gold,” so should financiers know to avoid businesses whose approach to marketing seems reliant on a variety of get-rich-quick schemes. A quick buck might be welcome news for those who view gold as more of a currency than a commodity, but rarely will that opportunity be absent of some higher, figurative cost.

Given gold’s limited dependability, it is wise to place one’s securities and trust in a safer and more trustworthy source. Few are in a position to gamble with the money they have worked so hard to earn, especially given the current economic climate. All monetary ventures come with a degree of risk but gold’s foothold is too shaky to trust. An investor’s wisest move, no matter what s/he bankrolls, is awareness of market fluctuations and which opportunities have a better chance at high levels of performance.

Thomas Stone is a freelance writer and investor. He’s become something of a connoisseur in precious metal markets and fine watches—particularly Bertucci Watches..