Is Gold the best investment? You may have heard this and read about this phrase a million times already. Now it seems Gold investment reading is becoming too stereo cast that it has lost its sheen.
But wait a minute. Though too much written word about Gold has turned out to be boring, the yellow metal itself has not shown the boredom in its rise. It has given good investment returns for those who put their trust in it.
Now the real question. Is it too late for investors to get into gold now? Many analysts believe gold is a bubble now. For those who missed the race, better look for other avenues. In the last decade or so the price of Gold has risen more than 100%, which is a huge return for any one's investments. Partially because Gold is considered as a risk free investment unlike stock markets where a minor flip-flop can convert your investments into mere paper.
What is the reason that Gold has done exceedingly well even during the recessionary times? Many say it is pure economics of demand and supply. But hardcore investors will vouch that it is not this reason why Bullion has performed so well.
More so it is the perceived notion - that which doesn't exist in real world - about Gold of having high returns that billions and billions of dollars have flowed into this arena.
Right from exchange-traded funds, futures contracts, mutual funds, gold coins and bars, every one has joined the bandwagon. And all made a good cut on the high price wave.
Gold played a big role as a hedge against inflation, a safe haven (a phrase repeated too many times in too many reports) against currency fluctuations and a balanced diet between Fed Reserve and US Treasury, which, many times, contradicted against each other.
Planners recommend a maximum of 10% in gold preferably in mutual funds or ETF. But since Gold ETF has not given expected return, the physical possession overrode everything else. This 10%, for most of the HNIs, turned out to be more than 60% since they ran out of investment ideas.
So should the investors be cautious about further getting into Gold? Perhaps not but expecting a similar return will be a Utopian idea. So has the yellow metal reached its pinnacle? Not yet but markets always gives in to corrections.
Gold should be having the highest pick up in Google News. Not surprisingly, there are umpteen numbers of websites and blogs that gives commentaries and recommendations on investing in Gold and Silver. Do they earn anything for this? Perhaps not but they could be in a win-win situation if Gold climbs up and their own investments gets pumped.
Get into any television shows of business channels and you are bombarded with investment safety in Gold, a commodity that most analysts loves since it has shown only a one way trend - towards north.
Financial planners should, however, be cautious in their approach towards Gold, warns many market watchers. A flurry of good economic news can ruin Gold to unimaginable levels. Though there is a strong lobby for avoiding this crash, you just cannot predict market dynamics, however strong you may be.