If you look at major asset classes throughout history, one specific class stands-out as a safe-haven in times of trouble and a reliable performer when the market is backed by the bulls: precious metals and gems. Do you think it's coincidence that precious metals and gems were used to create the crowns of kings and queens? Is it any wonder Fort Knox has one of the most sophisticated security systems in the world? Are we surprised that the preferred gem for engagement rings is a diamond?
Gold, silver, and other precious metals are incredible assets to hold because they tend to be great places to store and grow wealth. As with any investment, you've got to know why it's important to own it and when its value is an opportunity to hold versus when to sell.
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Gold is a great example. According to Guildhall Wealth Management, gold has been used as a form of currency since 550 BC. People like gold as a benchmark to currency because it's a finite, high-demand metal and allows for easy trade between people who use different currencies. Thanks to years of expertise in the precious metals financial sector, the experts at Guildhall can help you learn about buying gold or silver in RRSP form, and can even help you with storage options.
Gold, as a resource and currency, has never really lost its luster. In times of plenty, gold is usually more affordable because other opportunities exist to earn money. According to Gold.org, in an unstable world, having part of your portfolio in gold can give you above-average returns as gold, like other precious metals, is often "negatively correlated" with the market. As the market turns bearish, people look for more stable investments and gold shines. For example, during the "great recession" gold returned an average of 32% per year from 2008-2012. One of the driving forces was not just its currency value but its use in a variety of technologies from TVs to mobile phones.
Silver, like gold, also has industrial uses but never seems to get the credit or demand of gold. This is an advantage to the savvy investor. The Silver Institute tells us that silver is found in everything from electrical switches to chemical-producing catalysts. But despite its versatility, it never beats gold in the popularity contest. But silver doesn't hide alone; platinum, iridium, and rhodium can all play a role in your investment strategy and because of their low profile, can possess great opportunity because they're usually undervalued.
Each day the world gets more complex. With war in Syria and Iraq, increased pressure from the Chinese, and artificially depressed interest rates across the globe, there is more need than ever for gold and silver hedging. Is it a surprise that (according to a recent Forbes article) wealthy nations are buying as much gold as possible? When diversifying your personal portfolio, an expert financier at Guildhall Wealth Management can help you get the most out of your investment. If history is any indicator of the future, precious metals and gems may be a wonderful place to invest because when times are good, they become more affordable and when times are bad, they're often the only assets to perform - both opportunities for you to profit!
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