Not All Hard Assets Are Affected By The Performance of Gold

Even though gold is at its lowest value since 1980, analysts warn that it should not be used to predict the future performance of other hard assets.

if investors could see the future

investors are worried about traditional investmentsOn April 15th, 2013 gold dropped in value more than 9 per cent, resulting in the biggest one-day fall, in 33 years. Moreover, some analysts believe it could drop an additional $100 in price per ounce, in the near future. Needless to say, this has many gold investors worried and some are even rushing to sell-off their gold assets. One fundamental of investing is that all investments carry a certain measure of risk. And nowadays, it appears that gold is no exception to this rule.

For many years gold has been considered to be a good hard asset investment for the most part. Historically it has increased in value decade after decade, and some say is likely to continue that trend by the end of this decade. But for the immediate future, gold investors will likely have to hold onto their investments; until the price goes up again. How long will it be is anyone’s guess at this point, but many experts agree it is inevitable. Until such time, investors have to be patient and not panic and sell their gold assets, which could result in a further drop in value and no gold investor wants to contribute to the assets further decline.

Gold is just one of the many hard asset investing opportunities available in the market today. Hard assets, like precious metals and gemstones, have always been considered less risky than traditional options; like stocks, bonds and even the often recommended real estate investments. As a matter of fact, many investors favor them because they are not directly correlated with the stocks and bond markets and thus are not affected by inflation, in the same way that traditional investments are.

Hard assets are essentially the materials that are needed in the manufacturing of all the world’s consumer goods and transport requirements and have always been in strong demand to facilitate the steady growth of the global economy, decade after decade. This is a fundamental reason why these investments are appealing to investors. In most instances, investors know that their investment is in an asset that is in constant demand worldwide and is expected to continue that way for many years into the future, resulting in long-term investment success.

investing in manufacturing materials hard assets

Much of investing is about speculating which direction the global economy will take. Yes, the price of gold is down at the moment, but many investors believe it will bounce-back again. Some believe it will make a comeback in an even bigger way. In fact, there are a few market analysts that have predicted the global economy will double in size by the year 2020 and in turn, the demand hard assets (like gold) will rise to facilitate the massive growth. As you can imagine, these positive forecasts mean good news for anyone who has made an investment in hard assets.

Author: Riley Davies

After years of disappointment with investing in stock and bond markets, I have turned my attention to alternative investments and business opportunities.

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