Important Advice For Gold Buyers From Expert Investors

Among all the precious metals in existence, gold has constantly been the most favored one. This can be attributed to three key characteristics that it possesses: portability, fungibility (useful as a medium of exchange) and acceptance all over world. The value of this precious metal has consistently increased throughout the years, making it a splendid investment.

However, even as you consider making such an investment, you should first seek guidance from other expert investors. Without such critical advice, you run the risk of making unwise decisions.

Insights From An Expert Investor: A Critical Perspective On Investing

One expert investor whose ideas are truly valuable is the billionaire investor, Warren Buffet. In an article in Fortune, Warren Buffet outlines a much more critical perspective that investors should have when making investment decisions.

Many people often make poor decisions simply by buying assets that seem to bring in high returns. However, the reality may be that you never fully benefit from such increased value, due to taxes and other fees you have to pay. If you also consider the aspect of inflation, you may end up with a much lower purchasing power than what you started off with.

The aspect of deriving a higher purchasing power from investments is a key consideration at Warren's investment firm, Berkshire Hathaway. Considering the long track record of successful investments in such a firm, this is definitely something that gold buyers must consider.

Another mistaken perception by armature investors is the fear of short term volatility in the value of investments. Such apprehension is typically seen in investors who want a quick return; hence they cannot easily tolerate short term price dips.

According to Warren buffet, although short term volatility may cause an investment to be termed risky, it shouldn't put you off, as long as it delivers an increased purchasing power during the long term holding period. This concept can easily apply to gold investments, since the precious metal does experience constant short-term price fluctuations. Despite such price fluctuations the value of gold has always increased constantly in the long term.

To gain a better understanding of investing in precious metals, you also need to know how such an asset compares to other types of investments.

Categories Of Investments

Your portfolio can include various forms of assets, each with its own advantages and disadvantages. These can be classified into three major categories:

(i) Investments Denominated In Particular Currencies:

This category includes bonds, money-market funds, bank deposits, mortgages and other instruments. Such instruments typically experience the least volatility in short term value. However, if they don't offer high enough returns, you run the risk of ending up with lower purchasing power, due to inflation.

(ii) Precious Metals:

With such a category, you don't derive any profits or earn interest directly from the asset. However, your main intention is to get a profit when you sell it later on, at a higher price. It's therefore important that you consider all the costs related with keeping such an asset (includes insurance and storage costs), since this will affect your returns.

(iii) Productive Assets:

Such assets include farms, businesses and real estate. This category would typically experience more short-term volatility, but you can derive greater profits compared to the interest earned on bonds and mortgages.


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Abraham is an astute investor. The ideas he shares are derived from his successful investment experience. To read more and guidance, visit us at http://www.sellgoldsydney.com/ .