Invaluable Economic Impact of Gold and Other Assets

Posted on Apr 25, 2014

People have been buying gold for centuries as a way to invest and safeguard their money. Similarly, companies over the decades have been doing every bit they can to safeguard the assets they have acquired for their respective operations.

Gold has been used since the dawn of civilization for coins, ornamentation, and religious idols. Gold is a rare commodity not just because it is in short supply, but because everyone in the world recognizes its value. Until relatively recently, gold backed the currencies of many nations. People continue to buy gold today in two primary forms. Some prefer coins they can keep at home in a safe, while others opt for gold certificates.

Gold has a long and rich history in human civilization, but even today, people continue to hold gold. A variety of motivations inspire investors when they choose to purchase gold. Often, they are striving to balance a portfolio that also contains stocks, bonds, and other instruments of investment such as fixed assets. Sometimes, they are wary of economic fluctuations and nervous about the possible future actions of governments, which is why entrepreneurs call on the services of fixed asset management specialists or have a gold reserve in handy.

People who invest in gold sometimes fear the government will inflate the money supply through spending and printing of money until dollars have little value. Gold, on the other hand, tends to hold its value better, because it is in limited supply and cannot simply be created by the government. Thus, through much of modern history, gold has been regarded as an excellent store of value.

In recent years, as governments have continued to expand programs and increase stimulus spending even while keeping interest rates low, concerns over potential inflation have motivated people to buy more gold as well as prompted companies to invest in asset management software. Such economic speculations have, in turn, driven up the price of the commodity. However, in 2013, the price of gold tumbled for the first time in over a decade, declining more than 26 percent. Influential American investors such as George Soros began moving away from gold, although countries such as India and China continue to purchase gold in large amounts.

Yet the best time to buy gold is not when it is at an all time high. Now that gold finally dipped this year, it might be the best time to buy. People will likely regain confidence in gold as a store of value, even as their confidence in governments wane. When that happens, gold will continue its upward creep in price.

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