5 Main Reasons To Own Gold And Silver

There are a lot of reasons to possess gold and silver bullion. The following are my top 5. Please remember when investing in any market to not rush into this market until you conduct your own due diligence. Additionally, you need to only allocation a proportion of your assets to 1 asset class. My own belief is a 10-15% gold/silver bullion allocation should be a given for financial insurance. One could even suggest that you can increase the percentage to the amount you trust a financial meltdown/crisis is possible. So, during a financial crisis, it could be considered a good idea to increase your allocation. As a matter of disclosure, a good share of my assets will be in precious metals until I believe the financial crisis is behind us.

Something else that I would like to mention before we look at the top 5 reasons to own gold and silver is that investing in gold should be seen as a way to preserve your wealth versus getting rich. Consider what kind of shape the overall economy has to be in for gold to be going as high as you might desire.. Many people are predicting gold going to astronomical levels and even though many of these arguments are sound in their logic, a run-away gold price, spells trouble in paradise. Ok, so onto the top 5 reasons

1. A Record of Maintaining Its Value Unlike the paper currencies of the globe that are only as good as the word of their issuing bank, precious metals have a history of maintaining their value over the ages. People have look to gold as a method to successfully pass on their family wealth from one generation to generation. As talked about previously, try not to get caught up in the price versus as looking to insure your assets. Its highly likely that gold will remain for decades yet our current financial system poses certain questions yet to be answered.

2.Out of Control Inflation or Deflation Deflation is usually a period from which prices contract, business activity slows plus the economy is burdened by excessive debt. It has not been seen globally ever since the Great Depression from the 1930s as far as today. During that time, the relative purchasing power of gold did well. We also have to consider that gold has no counter-party risk meaning it cant default. On the other hand and in an effort to keep the economy afloat, we have to guard against central banks printing too much of its own currency as it will devalue its citizens purchasing power.

3. Geopolitical Uncertainty Throughout time, gold has maintained its value not only in times of financial distress, but additionally in times of geopolitical uncertainty. This helps explain why gold is oftentimes called the crisis commodity. Essentially, investorswill usually seek gold on account of its relative safety when worldwide crisis are high. During these times, precious metals will frequently outperform other investments. For example, gold prices experienced a selection of their largest recent upswings during periods of tension with Iran and Iraq in 2007 and 2008. In the current geo-political climate on the earth, I think it is sensible one can anticipate more wars and conflict.

4. Liquidity and No Counter-Party Risk I expect corporate bond defaults may continue to rise as the next wave of the economic crisis unfolds. Moreover, the real estate market is anything but out of the woods yet. Actually, housing prices are continuing to show weakness. This will continue to have another large ripple effect throughout the economy. Remember that as goes housing, so goes the economy. Peoples ability to honor their obligations is becoming more of a challange and therefore,defaults on many assets could very easily continue to rise. These debts are mainly uncollaterized, just on someones word. You may refer to it as counter party or liquidity risk; the bottom remains that an ounce in your pocket or safe means that you no longer have liquidity or default risk. The gold and silver price will remain volatile for a while, however you never have to worry about a 1 ounce gold or silver eagle weighing less than an ounce.

5. Increasing Demand With coutries like China and india improving their financial status along with the prosperity of its citizens, investment interest in gold is rising. The rise of these emerging market economies is allowing more investors to invest a portion in gold and/or silver. In some of these countries, precious metals is definitely a engrained part of the culture. To illustrate, India is one of the largest gold-consuming countries. Through the Indian wedding season in October, India usually sees its highest investment demand. Now in China, investing in gold has been described as type of saving.Remember that India and China have got a history that extends back much beyond the U.S. That history includes gold as money or backing their currency.

Learn more about investing and owning precious metals at Atlas Precious Metals Exchange http://www.atlaspreciousmetalsexchange.com