There is a strong case for individuals and corporations to invest in gold in Ireland, given the precarious financial state of the Irish economy and that of the Irish people. Indeed, the global economy and financial system as a whole remain in a poor state.
Gold bullion is the precious metal par excellence and remains an important safe haven asset. For thousands of years, gold has occupied a special place in the hearts and minds of people all over the world.
The same is true for Ireland, where the crock of gold is associated with the Leprechauns, but also appears to have symbolised the spiritual enlightenment sought by our pagan ancestors.
Gold is deeply embedded in the consciousness of all societies in the world. Consider, for example, the frequency with which the word gold is used to used to signify superiority or excellence- gold card, go for gold, golden era, golden handshake or parachute, the golden mean, gold-digger, heart of gold and of course, the gold standard.
Investing in gold has taken a secondary role in portfolio management to the detriment of investors.
Investing in gold has taken a secondary role to investing in shares, bonds and property in the past 20 years; an unprecedented era of prosperity for many in the developed world. However, many astute financial analysts recommend that between 5% and 20% of every investor’s portfolio should consist of the ultimate in hard assets-gold.
The price of gold typically moves contrary to other investment vehicles, thus providing balance and protection in a volatile and uncertain global financial and economic system.
Over the long run the gold price tends to go higher, or rather, fiat currencies tend to be devalued and lose value versus gold. The gold price history is excellent over the long term, whether that may be a 10, 15, or even much longer time frames of 40 or 45 years since the end of the gold standard in 1971.
Indeed, to buy gold is as good if not better than to invest in the stock market and most stock market indexes over a 10 to 40 year period.
To invest in gold bullion, or pure gold in the form of gold bars or gold coins is the best way to invest money since gold bullion has an excellent record of maintaining its purchasing power relative to other currencies. In addition to the security offered when you buy gold bullion, it is perhaps the most private asset one can hold. Your gold bullion purchases are never reported to any government or private agency, unlike investing in shares or other assets.
“Governments lie; bankers lie; even auditors sometimes lie; gold tells the truth”.
This quote by the late Lord Rees Mogg, economist and former editor of The Times, and assistant editor of The Sunday Times has never been more appropriate. Recent years have seen the emergence of massive accounting corruption and corporate fraud as witnessed dramatically with Enron and other companies.
We have also witnessed the collapse of Bear Sterns and Lehman Brothers that preceded the almost total collapse of the entire global financial system.
Governments today are increasingly “massaging” economic figures and “spinning” a positive tone to economic news. It is to maintain investor confidence in stocks and bonds, and consumer trust in the economy as a whole.
Gold bullion is one of the few assets that represent no multinational corporation, bank or governments liability or ability to pay. To buy gold remains the ultimate insurance against economic and financial difficulties.
One purchases health insurance for one’s family and oneself not in anticipation of severe health problems but merely in case of that eventuality. Similarly, one should not invest money in gold in anticipation of economic or financial difficulties but in case of such an eventuality.
When we buy home or car insurance, we are acting out of the old proverb of “hoping for the best but preparing for the worst”. Similarly, to invest in gold is not the preserve of doom and gloom merchants, but rather of individuals who hope to protect and preserve what wealth they have been fortunate enough to gain through their hard work and for financial acumen.
One does this through investing in gold bullion, which is the only real hedging instrument and safe haven asset. Gold has, and will be for a long time, the best place where to invest money.
How to invest in gold is just as important as why. Those who wish to buy gold should opt for physical rather than paper gold due to the significant and unappreciated risks of owning paper or derivative gold, where the underlying asset is exposed to major counter party risk posed by gold ETFs and other gold investment vehicles.