The price of gold has literally skyrocketed in the past year, leading many investors to ask themselves “is gold a good investment?” Ask anyone on the street and you’re going to get a different answer, but the fact remains that precious metals like gold and silver are the backbone of an economy that depends on paper and credit as currency. Because of this, investing in gold stocks is absolutely a good idea for any investor.
When it comes to precious metals, gold is without a doubt the most popular choice for investors. The biggest reason that investors purchase gold is as a way to hedge against the economy. If the dollar drops or the economy crashes, gold is going to be one of the few investments that weathers the storm, so to speak. It’s an investment against any unforeseen economic changes.
Investing in gold stocks is all about something called dollar cost averaging. If you’re not familiar with the term, this is when you put the same dollar amount into gold every single month. The price could be falling or rising, it doesn’t matter. When you put the same amount into play, you’re averaging your investment over both the peaks and the valleys, thus protecting yourself through the simple use of routine. When an average investor uses dollar cost averaging for gold, it spreads out any risks over a longer period of time and thereby lessens the overall impact of those risks. Most of the time your accountant or money manager will recommend that you put between 5 and 10 percent of your money into gold every month.
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