In the wake of the recent recession and the current international debt crisis, economic volatility has hit unprecedented highs. Even the best hedge fund traders find it difficult to make money in an economic environment such as this, which puts the retail investor at a serious disadvantage. However, there are many recession proof investments that have stood the test of time and allow investors to make money in even the most volatile of financial environments. One of these investments is gold, which has seen incredible support in the past three years, with a rise in price of 250%.
Aside from gold being one of the historically recession proof commodities, there are other factors which make gold an especially attractive investment in the wake of the current recession. As the US dollar becomes more and more devalued based on the printing of trillions of new dollars, gold, which is historically seen as moving against the price of the dollar, will continue to hit new highs.
Also, the Federal Reserve has been seen to hold down interest rates artificially. However, Ben Bernanke and the Federal Reserve have already admitted that they will have to raise these rates to market value in the near future, which will further increase the price of gold.
As investors choose their financial vehicles to invest in gold, it must be said that some are better than others. Gold, like all investments, has its derivatives in paper stocks that people trade in the form of ETFs and CDSs. However, these derivatives do not always follow the true price of gold as they are susceptible to the pull and tug of market forces.
The most steady investment in gold has always been to buy gold bullion or buy gold coins. Ownership of actual gold instead of a gold derivative insurers that your investment goes up at the same time that the market price of gold goes up. There is no market pressure, and the short term buying and selling of individuals cannot affect your investment in any way. It is because of this that many of the ultrarich such as currency expert George Soros have decided to diversify their portfolios by investing in actual gold pieces directly instead of investing in gold through the stock market.
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