The recent tumult in the world markets has many investment pundits scratching their heads, wondering where the recovery that we were all promised has gone to. With the euro tanking, and the U.S. dollar looking to follow right along behind it, investors are scrambling again to find a safe haven to put their holdings and weather the financial storm. What makes the situation even more difficult to decipher is the fact that the talking heads will point to a 200+ point gain in the DOW average and say that we are recovering, while neglecting the 250+ point loss the day before, and the day after.
Wild swings in the DOW average, up or down, are not the sign of a strong economy, but of a weak one. If you fear the strength of your current portfolio, consider shifting your holdings where many spooked investors are looking – buy gold coins and buy yourself some stability.
How do gold coins help, though?
Gold has long been the basis for most of the currencies in human civilization. Because it is a precious metal, it possesses value beyond its traded spot price. The inherent value of gold stems from its versatility and its incredible usefulness in many different fields. Gold can be used in everything from jewelry to medicine to dentistry, electronics and engineering, and many other industries. It is malleable, it never corrodes or rusts, it is one of the most efficient conductors of electricity available in nature, and it can be melted down and reformed again and again. In short, gold has captured the imagination of man from the beginning of time.
In this harsh economic climate, investors are turning to gold coins to shore up their portfolio holdings as a hedge against crushing inflation. The plain and simple fact is that, today, the U.S. dollar just cannot hold its value in the face of tumultuous deficit projections by every major economy in the world. Paper currencies are hemorrhaging value every day, while gold is steadily rising in value.
In the year 2000, the DOW average was just north of 11,000, while the price of gold was $273 per troy ounce. In 2010, the DOW average is hovering just above 10,000 while the spot price of gold is north of $1,200 per troy ounce. Gold has risen steadily during the decade, while stocks have exploded, deflated, exploded and deflated again.
As a long-term investor, which market would you prefer?