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How, when and where to buy physical gold
Investors worldwide are nervous about the global financial crisis, with governments committing to huge bank bailout packages, which will inevitably have to be funded by the tax payer. The very fundamentals of banking have changed forever, with the perception of strength and safety now a thing of the past. This is also true in the UK where a majority of the large high street banks are now partially nationalised. With interest rates and therefore savings rates at all time lows, returns on bank deposits are negligible. In fact, with the depreciation of the pound and the threat of hyperinflation resulting from increased money supply, the real rate of return can actually be negative.
History has shown that the financial world moves in cycles. In a period when one asset class outperforms, another may produce losses. It is impossible and far too risky to try to call these exact cycles by placing all your hard earned money into one investment area. Any independent financial advisor will recommend spreading the risk between the various asset classes, shifting the percentage of each holding according to the economic conditions.
By diversifying with physical gold, an investor owns a wider variety of assets, so that any losses in one area will hopefully be offset by gains in another area, producing positive returns over the mid-term. In the current uncertain economic climate, experts recommend 20%-30% of total holdings should be in physical gold, up from the standard recommendation of 5%-15%.
As a physical asset, gold offers the security of immediate accessibility and liquidity in the event of an emergency or crisis anywhere in the world. Paper-backed assets-stocks and mutual funds, for example-are "promises" of ownership. Gold is real money and offers real ownership. As a tangible asset with intrinsic value, gold provides safety and security that benefits every investor.