This is a guest post from Carson Ding, who blog regularly about personal finance and investment at Unit-Trust-Investment.com.
Since the beginning of early civilisations, gold has been a favoured metal. It has been used as a form of payment while nations trade between each other. It has also been something that people would kill for.
Gold has been around mankind for so long. Long before the creation of today’s national currencies. The gold coins that were minted in the beginning of the 20th century can today fetch a princely sum.
Still, when I ask people what do they invest in, I hardly hear that people invest in gold. Ask around you and you will likely hear “I invest in properties.” Unit trust funds. Fixed deposit.
Properties investment require a large sum of money to begin with. And if you plan to cash out your investment, you have to wait some time for a buyer and the whole legal process before you see your money. I don’t have such large amount of money and the patience. Do you?
Unit trust? Well, much better than properties. If you want to increase your funds’ values, you can buy up more units when the price goes down. This dollar cost averaging technique helps to lower your cost of purchase. In properties, you can put in a kitchen cabinet to add value to your property. However, you will never know whether your cabinet design will be liked by your buyer or not. And if you add too much fittings and fixture, you also risk overspending on the property that may not worth that much when it comes to the selling part.
For unit trust, the fund house is obliged to buy it back from you. Liquidity is not an issue. You get your money within a week or two after you sell your units.
Fixed Deposit? If you are still in fixed deposit, consider the inflation rates. Can your fixed deposit return beat the current inflation rates?
An Easy Investment
Now, what about gold investment? I like an investment that is simple and straightforward. Not much forms to fill up when you want to buy gold, unlike properties and unit trust funds. There is chart on the internet that you can track the price movement by the minute, hour, daily, weekly and yearly.
It is surprising that many don’t know how easy it is to invest in gold.
I like to analyse the charts (much like I invest in unit trust funds) and see when the gold price will be a good buy or a good sell. Don’t you want to study the battlefield first before you enter a battle?
Gold has been around for so long that you can get gold price charts since the year 1833 (if you want to know, it’s only US$20.65 per ounce in that year). I really like to have good price information in front of me when I go into an investment. I bet you do too. Today, gold has reached the highest point of US$1011.25 on 17 March 2008.
Do you have this kind of price information in front of you when you buy a property? Most people buy new properties while they are still under construction and then risk the project being abandoned. What a scary thought to put your hard-earned money into some bricks and then see you owing the bank money for the next 20 or 30 years.
Remember, if you are new in investment, start with something simple and straightforward. And most importantly, go into an investment that has a lot of information and data that you can analyse on the historical price movements and track record.