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Why Invest in Gold, Gold Bullion, or Gold Coins

Investing in gold for wealth preservation and an international form of money have remained much the same over its long history.

We love gold for these sound reasons:

      •  Gold is a safe haven in times of stock market volatility, economic uncertainty, and financial instability.
      •  Gold is a proven asset diversifier that, when included in portfolios, reduces the overall risk.
      •  Gold can be a good stand-alone investment based on its supply and demand fundamentals.
      •  Gold is a hedge against inflation over the long term. 

Gold’s Usefulness as a Safe Haven

The geo-political and world economic structure is currently undergoing major change. This means that the investment outlook, particularly for certain parts of the world, is more unpredictable than usual. Under these circumstances certain investment portfolios should include physical precious metal assets for the best protection.

Gold’s Usefulness as an Asset Diversifier

Before the 2000's dot com bust and the 2008 mortgage crisis, most individual portfolios were invested primarily in traditional financial assets such as stocks, bonds, mutual funds, real estate, etc. Sadly, many investors lost huge portions of their life savings because they found that everything tanked.

Long before either Stock Market Crash, our Austin team has urged the addition of precious metals to a portfolio for better balance and differsification. Adding gold to a ordinary portfolio introduces a tangible or real asset—thus increasing the portfolio’s degree of diversification. The purpose of diversification is to protect the total portfolio against fluctuations in the value of any one asset or type of asset. Gold does exactly that. 

The reason is basic: the economic forces which determine the price of gold are different from the forces which determine the prices of most financial assets. 

Likewise, the price of a bond depends on its safety, its yield, and the yields of competing fixed income investments. The next to nothing interest rates paid to us since 2008 have made bank CDs and bonds extremely unattractive.

The price of gold, on the other hand, depends on different factors: stock volatility, investor fears, a falling dollar, bank crashes, inflation, worldwide physical gold supply, and demand for gold. Most notable these days are movements in foreign exchange rates, zero and even negative interest rates, crashing oil prices, and political turmoil throughout world. The effects of all these factors are very complex and variable. What is important to remember is worldwide fears cause the price of gold to move independently of the prices of other financial assets.

Gold’s Attractiveness as a Stand-Alone Investment

Gold as an asset sould be included as part of a portfolio; yet on some occasions, gold can also be a good stand-alone investment. Many analysts have pointed to what they believe is a widening gap between the physical demand for gold and new supplies of gold—leading to a situation of “excess demand.”

Other analysts look upon gold favorably when they believe its price is undervalued relative to other assets such as the U.S. Dollar, stocks, and bonds, or when they believe gold to be a must own safe-haven investment.

Overall however, gold has increased in value dramatically in the 21st Century showing gains of 317%.

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A Secure Foundation for a Balanced Portfolio

Whether your investment approach is conservative or aggressive, gold can play a vital role in your portfolio. For this reason, many experts urge investors to keep at least 5-10% of their total assets in gold. We feel gold is essential for every portfolio. 

Gold Bullion Coins

For investors who enjoy investing in physical bullion, owning bullion coins is both enjoyable and convenient. Buying bullion coins is popular among medium and small investors. Gold bullion coins are legal tender of the country of issuance and their gold content is guaranteed. The bullion coin bears a face value that is largely symbolic; its true value depends on its gold content and the day-to-day changing price for gold. While bullion coins are normally purchased for their intrinsic value, they are also appreciated for their artistic appeal and beauty.

Our parent firm, Austin Rare Coins & Bullion, has prepared a Gold Prices Buyer's Guide they will send you free. (See form on the right-side of this page.) In this detailed guide to give you information about the best types of gold coins we believe should be added to your porfolio.

Bullion coins are minted in affordable weights such as 1/20, 1/10, ¼, ½, and one ounce. Coins make memorable and valuable gifts. The bullion coin represents an investment in pure gold because it is legal tender and its authenticity is guaranteed by the country of origin. Gold bullion coins can be easily bought and sold virtually anywhere in the world.

Some of the most popular bullion coins are the American Eagle, the Canadian Maple Leaf, the South African Krugerrand, and Euro Gold Coins. Banks and leading dealers like our parent firm Austin Rare Coins both buy and sell bullion gold coins every day. They have traded over a billion dollars in precious metals over the past 26 years.

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