With the volatility of stocks continuing, gold has outperformed the market over the last several years. Gold has been on a run over the past six months, reaching all time highs, and one wonders if now is the time to cut back on positions.
Gold is traditionally thought of as a hedge against uncertainty and the situation right now in the world is most certainly that. Gold has never gone down to zero and that is a lot more than can be said for stocks, many of which have gone down an amazing amount. For anyone who has invested in gold, they must feel fortunate to have their money in something that has done so well.
People with funds to invest must make decisions that are becoming increasingly difficult in today\’s extremely weak economy. It is not easy to find an investment vehicle that is really safe and provides a reasonable return. The rates of interest being paid on government guaranteed treasury bills or bank certificates of deposit are about as low as they can go. Further, it is a matter of debate as to the safety factor of any government-backed investment since it is technically bankrupt.
While gold is seen as safe, at the present high prices, you must be concerned about getting in at the top. For just like stocks, gold has taken huge drops throughout history and that could certainly occur again. And simply because thus far it has always recovered from such drops, that is not a guarantee that the pattern would continue.
Financial advisors will usually tell you to disseminate your money in gold, stocks, and other investments. This obviously helps to safeguard against losing all of your money, should something happen in one area in which you have invested. So don\’t be afraid to add gold to your investments while keeping some of your money in other areas as well.
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