Anyone who’s been tuning into the news lately – with Brexit, North Korea, Syria, and global uncertainty in the US system – has gotten an earful about the geopolitical instability of the world markets. Those in Toronto who understand the world financial market best are currently reciting the mantra that gold and silver are stable commodities to have, because, as this post will explore, they are stable, portable hedges against inflation. And these are not the only precious metals to consider investing in for the long term – diamonds and other precious are also considered a worthy investment – but with limited space, let’s focus on gold and silver.
A Brief History of Gold and Silver Values
Gold and silver have properties that make them extremely valuable, because the fact is that gold has been known throughout the centuries as the most durable of metals, and it’s that very reputation that has stoked its enduring value. Gold’s durability does make it valuable enough to use as currency, and although gold values fluctuate depending on the market and the willingness of gold hoarders to sell their gold, compared to our currency, or other popular investments, it remains a time-tested beacon of stability.
1. Market Stability vs. Asset Stability
An important reason to invest in precious metals is the fact that this commodity stands up to market fluctuations; when you buy gold or silver in Toronto what you really get are excellent hedges against inflation, especially when a country is going through a financial crisis. This type of asset stability provides investors with the security they need to get through the tough times, and because gold and silver aren’t dependent on the stability in the market, market fluctuations seldom affect the overall value (and, in fact, create more of a need for the precious metal). It’s a well-known fact that gold and silver are able to weather instability in the global market, and that, coupled with the rarity of these metals, has increased their price in the marketplace.
2. Portability and Diversification
An important fact about precious metals that is not true with stocks and other traditional investments is that it is highly portable. Investors can also diversify their portfolios to include mutual funds that are backed by precious metals – in other words, with a mixture of gold and silver coins and certificates, along with traditional stocks and bonds, investors are able to mitigate risk more effectively. A smart investor understands that precious metals like gold and silver should be the core stability factor in an investor’s portfolio.
3. Hedge against Disaster and Retirement Stability
When one thinks about all the geopolitical instability in the world today, it just makes sense to have precious metals in their portfolio, as gold and silver are hedges against inflation and provide the financial security needed to ride out unstable times.
Time may be a little crazy, and the prospect of investing might seem like a fool’s errand, but with gold and silver, you’re able to tap into a time-tested way to ensure that your wealth is not only protected, but pays off.