Gold & Precious Metals: A History of Investment & Value

Throughout recorded history gold has been used not only as a universally accepted medium of exchange, but also as a reliable store of value as well. It has been worked for, fought for, and, sadly, killed for. Unfortunately, the same can still be said today. But why? What's the attraction that gold and every other precious metal holds? At the risk of being blatantly simplistic, it's what they (either directly or indirectly) can buy. Boiling it down even further: greed.

Modern investors view gold as a solid hedge against inflation and declines in the stock market. Historically, gold's value has always risen during periods of paper-money devaluation.

Natural resources (of which precious metals are necessarily a part) include such items as food staples, oil, and water (and for investment considerations the companies and facilities that produce and distribute them). These commodities generally tend to perform well as investments regardless of whether economic conditions are strong or weak. Because of the consumable nature of such items, they'll always be in high demand.

Specialized knowledge is required if you're to successfully participate in any field of collectibles. Being typically illiquid (in other words, not readily saleable) investments that rarely generate any type of cash flow, collectibles are most often popular with those that have a particular interest or fascination with a certain category of merchandise. Persian rugs, baseball cards, fine art, antique cars or anything else that has the potential to appreciate in value can draw the consideration of these specialized investors.

As with all investments, knowledge is the key, and prudence is the chain on which it hangs. Fortunes can be made or lost in investments of any sort, so prepare yourself for success with the necessary knowledge, information and temperament.