Gold will remain to be the decisive factor in dollar hedge investment.
As an investment, gold ownership, gold mining stock or gold mutual funds directly oppose the dollar.
Whenever the dollar plunges, gold is expected to rise.
In a little while, we will present a number of ways to position your portfolio so you can gain from the gold bull market.
For the moment, we put emphasis on the great potential of gold's future.
The real probability of gains in the years and decades to come will not be seen in the traditional blue chip industry of the US.
This is considered obsolete and no longer competitive in the international market.
The growth of the economy in the future will be found in gold.
Though the world economy continues to stay away from the gold standard, real value will always be based on the gold's tangible value, whether or not this is acknowledged by the central banks.
This has been the case way back in history, and it will always be so.
This means that, despite fiat's popularity, we will always stick to the gold standard.
The following paragraphs will enable you to learn five ways of gold investment.
Certainly one will suit you best and your choice will depend on your experience and knowledge of the product.
Direct ownership Gold bullion is like no other, in terms of pure value.
The biggest downside of gold ownership is that there is a tendency to trade it with a wide range of prices.
So, you cannot expect a fast turnaround time.
You will purchase at a retail price and sell it at a wholesale price.
To break even, you need a high price jump.
However, gold should not be seen as a provisional asset, but rather as a defensive asset since it holds value.
When your dollars decline in value, a great way to preserve value is through gold.
Gold is best owned in the form of minted coins.
Exchange-traded funds The latest outburst in exchange traded funds or ETFs offers a more attractive way of investing in gold.
ETF is a mutual fund that can be traded like regular stocks on the stock exchange.
Its portfolio is set in advance and stays that way.
Gold mutual funds Some people are cautious about investing in physical gold.
However, they still want to know more about this precious metal.
Gold mutual funds are the best option.
They hold gold stock portfolios or stocks of companies mining for gold.
Most investors would select such companies, which is a conservative move.
This is safer than acquiring cheap shares in comparatively young companies.
Junior gold stocks This is a more speculative level of stock.
There is a lower probability for Junior Stocks to own mines that are productive.
They may also opt for exploration plays that can earn more potential profits, but with greater risks of loss.
This has a smaller capitalization compared to senior gold stocks.
This type of investment is suitable for investors that have a higher risk tolerance and are open to the probability of losses based on gold in favor of the prospective triple-digit profits.
Gold options Options allow experienced investors to speculate about the prices of gold.
They can speculate on the movement of prices in whichever direction.
When they buy a call, they are hopeful that the prices will increase.
A call fixes a buying price, so when the price goes higher, the margin between the current market price and the fixed option price becomes greater.
Whenever they buy a put, prices are expected to fall.
It is very risky to buy options.
There are more losses than wins.
As a matter of fact, 75% of the purchased options expire with no value.