You hear gold coins are a safe haven. The question is what does that really mean. The following post looks at why gold gives you protection from reductions in the price of the dollar, stock market, and more.
What makes gold a economic insurance policy is often the issues that cause the financial markets into turmoil are the exact same that increase the price of gold. Over the last 9 years, gold is one asset that has appreciated each year.
Gold often works as a hedge against inflation. The price of gold today can buy the same amount of goods and services which it did 100 years ago. The last time there was double digit inflation in the United States the price of gold set records which took over 25 years to surpass.
The price of the dollar controls many aspects of the price of gold. As the value of the dollar decrease the price of gold rises.
Gold coins works to diversify your portfolio. In many instances as the stock market goes down the price of gold rises though past performance is never an indicator of future gains. Another advantage to diversification is that gold prices can rise with the stock market as well as in 2002 to 2007.
The factors that set stock market prices are vastly different than those the determine gold prices. A stock price is determined the both the companies earnings and earning estimates while gold prices are determined by changes in the value of currency and inflation.
Examples of how gold prices have risen during economic unrest are listed below.
1. The stock market collapse in 2008 that caused many brokerage houses to fold the price of gold increased in value by 27% from $725 an ounce to $925.
2. "Black Monday" the 1987 stock market crash that saw a drop in the Dow by 22.6% was accompanied by the highest price in gold in 4 years.
What makes gold a economic insurance policy is often the issues that cause the financial markets into turmoil are the exact same that increase the price of gold. Over the last 9 years, gold is one asset that has appreciated each year.
Gold often works as a hedge against inflation. The price of gold today can buy the same amount of goods and services which it did 100 years ago. The last time there was double digit inflation in the United States the price of gold set records which took over 25 years to surpass.
The price of the dollar controls many aspects of the price of gold. As the value of the dollar decrease the price of gold rises.
Gold coins works to diversify your portfolio. In many instances as the stock market goes down the price of gold rises though past performance is never an indicator of future gains. Another advantage to diversification is that gold prices can rise with the stock market as well as in 2002 to 2007.
The factors that set stock market prices are vastly different than those the determine gold prices. A stock price is determined the both the companies earnings and earning estimates while gold prices are determined by changes in the value of currency and inflation.
Examples of how gold prices have risen during economic unrest are listed below.
1. The stock market collapse in 2008 that caused many brokerage houses to fold the price of gold increased in value by 27% from $725 an ounce to $925.
2. "Black Monday" the 1987 stock market crash that saw a drop in the Dow by 22.6% was accompanied by the highest price in gold in 4 years.
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