Tuesday, 22 November 2011 04:12
Article from my finances.co.uk
By Daniel Fox
With the current instabilities in the global markets and a third round of Quantitative Easing set to inject a further £75billion into the UK’s economy, effectively devaluing the buying power of the pound, many private investors are concerned about the impact that this may have on their portfolios.
For an individual to maintain a successful portfolio, it is important that it reflects the current position of the wider global economy. At the minute, the dominating position is that of growing Sovereign Debt, signalling a depressed market place.
With that in mind, it is paramount that investors move to hedge against inflation by acquiring tangible assets such as precious metals. With more money being brought into circulation, the costs of goods and services will naturally increase, thus leading to a weaker currency.
Precious metals, however, hold their value regardless of the amount of money that’s printed. 1oz of gold now will buy you roughly the same amount that it would have done 30 or even 300 years ago.
An increasing number of investors are buying into the precious metals markets as they are the most effective way of preserving wealth. When holding commodities instead of equities, the risk is effectively eliminated as you’re holding the underlying asset (the gold or silver) and so the investment is backed and won’t be able to go bust in the same way that equities can.
When purchasing precious metals you are therefore protecting yourself simply by transferring un-backed paper money, into ‘real’ money in the form of Gold and Silver.
Article from my finances.co.uk
