Gold’s Forgotten Superpower
For the past few years gold has climbed in value. Many who have invested in the metal or exchange-traded funds that track the price of gold have been able to make a good profit. If an investor bought shares worth $10,000 of Standard & Poor’s depository receipt Gold Shares in late 2004 the shares would be worth almost $34,800 today. An investment of the same size in an exchange-traded fund based on the S&P 500 would be worth only $15,200 today.
These large profits have made gold seem like a tool for quick profits. Investors, it seems, have forgotten the true value of gold.
Gold should be used as insurance of wealth. When the markets are bearish and investors are losing tons of money, gold shares stay stable and can even rise. This is where the importance of owning gold comes in. It ensures that even if the markets collapse, the investor will still have a dime to his name.
Written by: Toma Karamanolev