Page 12 - Introduction to investing in Gold

The Beginner's Guide to Investing in Gold
Ultimately, gold is valuable because, throughout human history, people have been willing to accept it in exchange for something else. We have always considered gold valuable. Consequently, governments, banks, and individuals have used the noble metal as a store of wealth and a means of exchange for millennia.
The initial value of gold is dependent on its physical properties and scarcity. For thousands of years, these physical properties have been exploited for jewellery and coins, and this ancient legacy has given the yellow metal a unique place in human psychology. Its density feels incredible when held, the lustre, the fact it is soft and can be easily shaped, and the fact it doesn’t corrode over time. All of these properties made gold valuable to early and current civilisations.
And if you’re still not convinced, here are a few other reasons why you may want to invest in gold:
1.Value – it’s pretty good at holding its value.
2.Inflation – gold has a decent track record of maintaining purchasing
power. As you’re about to see, it’s not a perfect hedge, but it’s certainly
worth considering.
3.Geopolitical uncertainty – gold is a “portable global asset”, particularly
gold coins.
4.Portfolio diversification – gold has a relatively low correlation to other
investments.
You may have other personal reasons, but the point is it’s a good time to think about gold.
I should add that I also like silver, but given I could probably write a whole book about that, I’ve chosen to focus on gold.
How Do I Know What I’m Talking About?
First of all, I’m a professional investor. I do it for a living. I’ve got all the same issues that you face, but I back my investments to deliver. They have to; it’s my job!
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