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Monday, June 28, 2010

Gold Bullion Offers Valuable Diversification For Your Investment Assets

A few days back I wrote about how might be a good time to invest in the stock market given that the stock market has been beaten down in the last few years and may be on the mend again. One of the most important things to keep in mind when investing is the concept of diversification. Just as you need diversity in the types of foods you eat so that you get a healthy balance of all the nutrients your body needs, you need diversity in the range of assets you invest in.

Diversity protects against steep losses in one particular stock or sector of the market. In addition to the stock market though, you need to diversify into other asset classes also. You need to hold some of your investments in cash or equivalents so that you can access them immediately in case of an emergency. A small portion should go into bonds and other debt instruments which are safer than stocks. Another investment class that is worth diversifying into is precious metals such as gold, silver and platinum.

Gold Coins Gain is an online seller of gold, silver and platinum bullion that you can buy with your investment assets for diversification. Gold has always been considered a mainstay of investing because of the intrinsic value of that precious metal. The production of gold in the world is very limited and no government or other organization can increase the supply of gold substantially in an arbitrary manner. The same is not true of fiat currencies such as the Dollar or Euro because governments can print more money as and when needed (and have done so in the past), increasing the money supply and causing such currencies to lose value.

Therefore, bullion, and in particular gold bullion, tends to do well when other investments lose value. As you know, many stock markets throughout the world have fallen in the past few years, so gold has done pretty well during the same time period. Moreover, because of the recession, many governments have taken on increasing amounts of debt and relied on deficit-spending to balance their books. This increases the supply of money beyond what the economy can sustain normally, eventually resulting in devaluation of the currency (a phenomenon which manifests itself as higher and higher inflation). This has also resulted in appreciated values for gold over the past few years.

The accompanying graph showing the price of gold over the past 10 years illustrates the explosive growth in gold prices because of turmoil in economies throughout the world. During the time period, budget deficits and trade deficits have gone up causing countries to prop up their economies by trying to increase their money supplies, resulting in devaluation of currencies and a run-up in the prices of real assets such as gold.

The trend has continued to this day, and all indications are that it is not likely to stop anytime soon. All this bodes well for continued appreciation in the price of gold going forward. Gold Coins Gain allows you to tap into this growth opportunity by allowing you to buy bullion (particularly gold bullion, but also silver and platinum) with your investment dollars.

In addition to allowing you to purchase gold in a regular investment account, Gold Coins Gain also allows you to set up gold-based IRA's and 401k's that allow you tap the potential of the yellow metal in your retirement accounts. In addition to a variety of options to purchase gold (bars, different types of coins from different countries, etc.), the site also offers extensive information about investing in precious metals. The site also features testimonials from other satisfied investors. As part of building a diversified portfolio, you owe it to yourself to check out Gold Coins Gain, and start incorporating precious metals into your investment strategy and decisions!

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