We are facing a great number of financial problems in the world today. Experts in 2011 predicted that we would see a massive financial crisis in 2015 and they were right. The recession (depression?) was the result of a massive bubble in commodity markets that caused widespread economic collapse and sovereign defaults. 2016 brought with it a further unpleasant surprise: China’s growth numbers, once touted as a solid reason to toss investments their way, has been revealed to be less-than-trustworthy, and the market has reacted viciously, selling away their holdings, resulting in a fresh wave of pessimism. This is why it’s worth considering investment in precious metals once again.
Historically, gold and silver have always been considered as sound investments and natural hedges against inflation. They have been used as a symbol of status and wealth for millennia; and gold was used as a central currency for hundreds of years. Today, gold and silver are considered a holding of value quite unlike other options. Indeed, gold, unlike stocks, is not as vulnerable to speculation. It is more of an indicator for economists, and its value is adjusted to hold at steady levels.Since World War II, the five years in which U.S. inflation was at its highest were 1946, 1974, 1975, 1979 and 1980 (as of 2012). During those five years, the average real return on the Dow Jones Industrial Average was -12.33%, compared to 130.4% for gold.
It is common knowledge that gold is considered to be negatively correlated against traditional portfolios — in other words, it does well when everything else doesn’t. The recent financial crisis of 2008 saw stocks and bonds crash. Alternate assets, like hedge funds and real estate, were not spared either, causing a devastating ripple effect. So what stood to benefit a bad portfolio? The answer is gold. Gold had gained an average of 32% per year through 2008 to 2013. Now that 2016 is already proving to be a volatile year, the pattern is pretty clear, and according to expert business management consultants at Guildhall Wealth Management, introducing gold into your portfolio will help withstand the Chinese backlash better than other forms of investment.
Additionally, if gold is too expensive for your tastes, consider silver — an investment considered by many experts to be extremely affordable and undervalued. Silver, like gold, does not come with the risk of its parent company defaulting or crashing, as buying into it makes it your possession. The liability does not lie with anyone else. In addition, silver has many industrial applications, ranging from wiring in medical instruments to catalysts in cutting edge fuel cells. It has an extra dimension to its value that, in today’s innovation-centric world, will only grow, which means that when you buy gold or silver through Guildhall Wealth, you will be protecting your future by hedging against financial uncertainty.
Gold has historically been an excellent hedge against inflation because its price tends to rise when the cost of living increases. A company like Guildhall Wealth Management can help you analyze the market to determine the right time to invest, and can also help you acquire and store the bullion you purchase.
There are some very good reasons to consider gold and silver as investments in our current trying times; after all, historical patterns to subtle factors continue to suggest that gold should not be ignored when you plan your portfolio. The right wealth management company can help you invest in precious metals the right way.