With the economy suffering from such a crisis most people have a large number of concerns regarding making any kind of investment. In the past, people thought of purchasing stocks, dollars and gold as a good way of making investments. However the global recession seen in the last couple of years has caused major financial losses to the investors. In such conditions a lot of people turned to investing in gold thinking it to be the best opportunity for sustainable growth opportunities. The question is, is that true? There are certain things that need to be taken into account to decide that.
When we talk about any kind of investment we look for bigger returns. The bigger the returns the more satisfied you are as an investor. However compared to other investment opportunities, gold has sustained its status as a profitable genre for investment because it does not offer much loss. This argument can be easily justified through doing a bit of research and comparing the gold rates over the last couple of decades.
Through the data available online it is evident that the gold prices have considerably multiplied over the years. If you bought gold in the 1980's at a certain price you can look for a good 3 to 4 times more profit if you sell it now. However comparing it to the inflation in the recessionary economic period the world has suffered from in the past, the returns are not substantial.
Currently the economy is going through a highly unpredictable phase and you can not really say anything about the rates you can expect the very next day. No matter how steep the loss has been, gold has never gone down to zero which makes it a likable investment. However the fact that the ratio of returns from gold investment is very low makes it unpopular amongst the masses.
One of the reasons for relatively less return on gold is the gradual dollar growth in the market. Another important factor that contributes to it is the fact that nowadays investors normally prefer selling their gold to recover bad debts and losses they have to face in the current declining conditions prevalent throughout the world. All these factors have led to making gold a very unlikely investment amongst the capitalists.
The question now is with all these elements in mind is gold investment cracked up both in the long and the short term? The answer is, YES. For people looking for long term returns the increase in gold prices does not parallel the rate at which inflation has occurred. For those seeking short term profits, it is highly inadvisable to buy the metal at such a high rate.
Therefore according to the experts and experienced investors, gold is definitely not a favorable option for making short term investments. However for a long term stable investment that offers a safe place to keep your money, the opportunity will always be available.
James T Monaghan is an investment advisor offering the latest information on how to invest in gold and municipal bond funds.
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