October 8, 2012 9 Comments

The Gold Series: Gold as an Investment (Part 4)

The History of GoldGold Mining and SupplyGold Uses and DemandGold as an Investment2012 Gold Deposit Rankings

Gold Infographic:  Gold as an Investment

The Gold Series: Gold as an Investment (Part 4)

The History of GoldGold Mining and SupplyGold Uses and DemandGold as an Investment2012 Gold Deposit Rankings

Since 2000, gold has outperformed the S&P 500 each year 9 of 12 times.

How does gold behave like an investment and what are the fundamentals of investing in gold?  What are the different ways investors can get exposure to gold in their portfolios?

History has shown gold to have several properties as an investment.  Gold helps diversify a portfolio and also acts as a hedge against inflation, currency devaluation, and volatility.

Many factors affect the price of gold such as speculation, geopolitical events, supply and demand, and macroeconomic factors.

There are different ways to get exposure to gold in a porfolio:  gold ETFs, bullion, and gold mining.  Each has different advantages and risks.

Gold is the ultimate store of value.  It has the tendency to stay strong in the face of inflation, uncertainty, or currency devaluation.  As central banks continue to increase the money supply in today’s economic climate, investors continue to turn to gold as a safe haven for their investments.

9 Responses to “The Gold Series: Gold as an Investment (Part 4)”

  1. RUSS SMITH says:

    Hi!, Patrons Of Visual Capitalist Et El:

    Sense the economic world of the United States has thrown away its’ Constitutional money standard as found in Article 1; Section 10 of OUR US Constitution which was written by men of experience @ least a million times greter than OUR present economists, my deceased mentor told me that there will come a time to sell gold, because somewhere along the line we will have to come to grips with a new currency say 1 new money for 100 of OUR present Federal Reserve Notes & so he advised selling gold after the exhaustion gap is achieved in the Mania Phase & exchange all the proceeds for clad coins before the currency exchange manifests itself into the public domain. If gold is @ $10,000 per troy oz. for example and two zeros are dropped through the use of te New $, the gold price in the ne $ would be $100 which would have great buying power but not anything near a conversion to to clad coins which are by the way emmitted into circulaltion by the US Treasury and not the Federal Reserve System. An automobile formerly selling for $40,000 would be only $400 in the New $ price. So, if you sell your gold after the “exhaustion gap” of the mania price @ say $10,000 and convert that $10,000 to clad coins, you can purcase 25 previously $40,000 automobiles thereby not only preserving your purchasing power but gaining the leverages requied to negotiate buying products for cash without interest payments etc. which would translate into helping with OUR real need for an honest, non political recovery of OUR domestic economy now being destroyed by fiat paper money. As they say though timing is everything when it comes to all markets. No!, we don’t need another Bretton Woods kind of paper backed by gold system but it appears that that’s what the political guys are aiming to ahieve or other wise the depositiory gold held in Fort Knox etc. would be this minute established as the money we all have in our possessions as Amerian Citizens but we don’t see any visible sighns/proof of that takig place do we? The Fed. puts out paper & digital money only; no mined & then minted money of any kind which is treason and we have all complied with the will of the Fed. committing treason with it by collusion.

    RUSS SMITH, CALIFORNIA (One Of OUR Broke States)
    resmith@wcisp.com

  2. CoinWhy says:

    This is another great infographic! This a link to this series is currently being featured on CoinWhy.com.

  3. Matei says:

    Stunning series of infographics! Great work! If you wish, you could post some of them on the Infographic File http://www.infographicfile.com We’d be happy if you did! :)

  4. reflector says:

    excellent infographic, kudos!

    i came across this infographic / link on silverdoctors.com

    i would, however, like to point out one glaring omission, in my opinion:
    in the getting exposure to gold section, it mentions ETFs, with the plusses and minuses.
    but not mentioned in the “minuses” is the primary danger in investing in ETFs: most ETFs such as GLD and SLV are UNALLOCATED, and they pose a very substantial counter-party risk.
    simply put, they don’t have the goods, it’s backed by fake paper gold (IOUs), not real gold.
    in the event of rehypothecation / MF Global-type event, you’re out of luck!

    there are a few ETFs that stand out from the pack and are fully backed by actual gold and silver bars, at a 1:1 ratio per investment dollar, and are worthy of mention: CEF, GTU, PHYS, PSLV

  5. Daniel says:

    Very interesting infographic!

    There is another interesting infographic visualizing all the different branches of gold investments at http://www.trustablegold.com/the-gold-tree-infographic/ .

  6. Shailesh says:

    Good informative

  7. Extremely informative infographic. One tiny element is missing to my mind: As a drawback of bullion gold the difference between the buying rate and the selling rate should also be mentioned: When you buy a quantity of gold and sell it the next minute, you incur a (relatively small) loss because of this difference. So in order to retain at least you investment, a small increase of the gold rate is required.

  8. I love it whenever people come together and share ideas.

    Great site, continue the good work!

  9. iras says:

    Lastly, you might consider an IRA Custodian for safe keeping of one’s gold
    investment. s and also other retirement plans into a certified
    gold IRA. IRS has set standards with regards to your physical asset’s fineness,
    which will be followed to obtain your account investment.
    It is a personal favorite of golfers vacationing
    in the Gold Coast especially seeing as there are
    as many as 16 gold courses just 30 minutes away or less.
    Gold backed Individual Retirement Account roll-over:
    With this approach, you get the cash from your existing retirement accounts and after that put the funds right
    into a different retirement plan.

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