Gold investing is primarily intended to be a long-term venture, despite the lure of short-term, high-gain investments. The potential for an immediate boost is tempting, but these investments are also the riskiest, with a high chance of losing money. The nature of such investments requires ever-greater amounts of capital to sustain a winning position, and no one can make 100 percent accurate forecasts, meaning that losses are inevitable.
Interestingly, hedge funds worldwide use gold investing as a hedge against their riskiest investments. This means that in the event of a loss, they can fall back on a solid investment in gold to protect their assets. Market analysts have long advocated for a position in gold as a smart option for the average American, given the dynamic of the market.
Over the past five years, trillions of dollars of wealth have been wiped out from the middle class, primarily incurred from losses in stocks, real estate, and derivatives. Gold, on the other hand, has been up considerably in that time, rising over 300 percent. This is a clear lesson that the current market is unstable at best, and even high prices in stock markets should not be trusted.
As such, gold investment is the most solid method of investing and the best hedge Americans have in this market. It is a sensible option for personal risk management, and the long-term benefits of such an investment far outweighs the potential gains of short-term, high-risk investments.
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