Gold Investment: Benefits and Risks

The world's love affair with gold is still going strong. Investors are buying up gold products and the demand for investment gold is rising. It seems like a great low-risk investment to add to your portfolio but there are risks involved. If you're thinking of investing in gold, be sure to weigh out the benefits and risks before making an investment decision.

Gold Investment Benefits
Gold investment benefits include:

• Gold is a solid commodity that has shown a continued increase in value.
• Gold is known as a hard asset because it has intrinsic value that is recognized around the world.
• Gold has more purchasing power than flat paper assets.
• There is a rising demand for gold. More countries are seeking an increased amount of gold deposits.

Gold Investment Risks
When investing in gold, be aware of the following risks:

• Market timing is important when investing in gold. Gold stock prices change based on a lot of factors, including the strength of the dollar. When the dollar is low, gold prices are likely to be higher.
• Gold can be seized by the government to pay national debt at any time. Those around in the early '70s will remember when Nixon seized gold bullion and gold coins to pay the national debt.