MIGHTYSTOCKS.COM-STOCKS, PENNYSTOCKS, SUBPENNYSTOCKS, FREE NEWSLETTER

- About Us - Newsletter - Privacy - Disclaimer - Contact Us

Why Invest in Gold?

Content courtesy of West Timmins Mining Inc.

Portfolios that contain gold are generally better able to cope with market uncertainties than those without it.

Adding gold to a portfolio introduces an entirely different class of asset. Gold is unusual because it is both a commodity and a monetary asset. It adds diversity to a portfolio because its performance tends to move independently of other investments and key economic indicators.

Recent independent studies have shown that traditional portfolio diversifiers, such as bonds and alternative assets, often fail during times of market instability. Even a small allocation of gold has been proven to significantly improve the consistency of portfolio performance during both stable and unstable financial periods.

Gold improves the stability and predictability of returns. It is not correlated with other assets because the gold price is not driven by the same factors that drive the performance of other assets. For information and statistics on the price of gold, link to:

Source: www.gold.org/value/stats/statistics/prices/index.html

Gold’s appeal as an investment lies in how easily it can be traded. Access to the gold market comes through a variety of means, including:

* Investment in physical gold, usually as gold coins or small bars, or, for larger quantities, by purchases at banks or gold dealers

* Gold futures and options

* Gold mining equities, often packaged in gold-oriented mutual funds

* Exchange-Traded Funds (ETFs) and similar products, offering potential investors cost-efficient, easy access to gold through stock exchanges

* Gold Certificates – owned instead of storing the actual physical gold.

Gold is also commonly considered a safe haven in times of political, economic or social instability, as well as a hedge against inflation. It can provide a sort of insurance against volatility in the value of traditional asset classes such as stocks, bonds and real estate. In fact, statistical analysis shows that over the past 30 years, the correlation between gold and the Dow Jones Industrial Average actually declined during the worst 30 months of the equity index – an indication that investors in gold had the protection they sought when they needed it the most.It can provide a sort of insurance against volatility in the value of traditional asset classes such as stocks, bonds and real estate.

Some recent examples of the refuge afforded by gold include:

* In 1997/98 the Government of South Korea asked its citizens to allow it to buy their gold holdings in exchange for local currency debt instruments. The Government raised over five million ounces of gold in this way which it sold for hard currency. As a result it was able to service its external debt.

* Fearful of the implications of the forecast electronic and communications disaster surrounding Y2K, there was a flight to gold in 1999.

* The first quarter of 2002 saw a flight to gold by Japanese investors as they awaited the withdrawal of government guarantees on bank deposits.

Source: www.gold.org/value/invest/whybuy/preservation/index.html

Important Notice

This general information on gold and other minerals is compiled from publicly available information. The views expressed in this website are solely those of the author and should be viewed as informational commentary only. In no way should these views, opinions or commentary be considered investment advice.

West Timmins Mining Inc. nor MightyStocks.com is responsible for the content of external links from this website.

DISCLAIMER: For all the terms of our Disclaimer, Privacy Policy and Terms of Use, please click on the Disclaimer tab of this site. In general, MightyStocks.com is not a registered investment adviser or broker/dealer and disclaim ourselves from all responsibility for all material posted on the site. We make no promises or commitment that the buying and selling of securities of companies profiled or otherwise mentioned on our website are suitable or advisable for any person or that an investment in such securities will be profitable or cause a loss. Material on this website is for informational and entertainment value only. All visitors should seek guidance from a licensed financial professional before making any investment or money management decisions which you ultimately are responsible for. In general, given the nature of the companies profiled and the lack of an active trading market for their securities, investing in such securities is highly speculative and carries an extremely high degree of risk. No companies provide compensation for profile coverage at this time unless otherwise specified on the page marked "Disclaimer" or at the bottom of the page for the stock profiled. Questions on our free newsletter or profiles can be obtained by writing the editors of this site at: editors@mightystocks.com.