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Saturday, July 11, 2009

Why Prudent Investors Must Choose Gold?

By Peter Blake

When small companies create an investment portfolio, it is quite degrading to see that they dont invest in gold, and we have too many persuasive reasons for stressing on gold as an effective investment vehicle.

Small companies now consider gold bullion to be the wisest investment tool to bank on. Most of the countries such as India are now investing on precious metals like gold by making jewelries and ornaments. This is a healthy and wealthy practice.

Though gold bars and gold coins are the best choice for investment, but gold which can be purchased in any form is the best and the most secure investment option. Several reasons have been given to establish the power of gold as an investment vehicle for all and particularly for small companies and their business plans. Some of the intrinsic advantages of investing in gold for the small companies are:

- Gold is the Primary Currency: Indeed it is! Different nations have different paper currencies starting from dollars, pounds to euros. These currencies are all supported by the value of gold. Gold is the major determinant of the number of paper currencies to be printed by the nations, since the value of all these currencies, such as dollars and pounds are actually dependent on the value of gold which in turn poses to be the security. Therefore, gold is the main currency of the world and it also has indisputable value, which isnt the same with paper currencies. It has a real intrinsic value for its holders.

- Liquidity of Gold is the Highest: Gold is known to be the most liquid of all assets of the world. The small companies that invest in gold can conveniently convert their gold assets into the currency of their country anytime. Under any crisis or economic disaster, gold can be liquidated very easily. This property of gold makes it a valuable tool for every form of investment. You can also trade gold easily.

- Gold Does Have Hedge Against Inflation: Gold is known to be the ultimate asset having hedge against inflation. It is the best vehicle for company investments and personal investments alike.

- Gold Offers Great Diversification: Gold investments provide good diversification to portfolios of every investor. It also gives protection to the portfolio in the inflationary environments from losing the intrinsic value of the gold and its subsequent returns for investors.

Gold investment is undoubtedly the most prudent one for small companies. At least 5-10% should be invested in gold for better returns. - 23196

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