A golden dollar defense

Posted by admin on February 22nd, 2010 filed in Gold Stock

What was once green, like a lush, fresh plant, is threatening to wilt and wither away.

The value of the U.S. dollar has decreased at a rapid pace, causing some to seek safety in investments not directly affected by the strengh of the greenback.

But you don’t have to wait to see if it will get the refreshment it needs. You could turn to something rock solid like gold.

Gold has been the trade of the 21st century, going up about four-fold. Compared to the stock market itself, Wall Street has had a decade of no returns.

Gold can help diversify your portfolio and is a defensive move against a weakening dollar.

Owning gold as a tangible asset, whether it be as coins or bars, has advantages such as guarding against inflation.

But it can also have drawbacks, like how to store it properly, whether you can trust your gold dealer, and tax implications.

There are more convenient ways to own gold. Consider an exchange traded fund, similiar to a mutual fund, that actually holds gold and sells for a tenth of the current price.

There are also gold options and futures, which allow investors to bet on the price of gold.

The bottom line, though, gold is the only true international currency. During its last big run in the 1970s and 1980s, its value increased by 20 times.

The general consensus is five- to 15-percent of holdings should be related to the precious metal.

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