Gold is basically real money.
While all paper money, the dollar, rupee, etc. is very likely to lose purchasing power due to inflation, gold is one of the few things, which will retain its value.
Actually, gold never loses its value. But, actually, it is the paper currency that loses value.
Interesting facts about gold :
1 ) Gold is so rare that the world pours more steel in an hour, than it has ever
poured gold since the beginning of time.
2 ) All the gold in the world could be compressed into 18 yard cube.
3 ) Experts estimate that there are only 41000# tons of gold left in the earth to
mine.
4 ) Gold is a superb hedge against loss of purchasing power - INFLATION.
5 ) Gold provides effective diversification for investment portfolios, by
exhibiting low long term correlation with other asset classes.
6 ) About, 68 % of gold is used in jewelery, 19 % as investments, 14 % in
industries.
7 ) About, 60 % of gold is made by mine production, 28 % by scrap, i.e. recycled
gold ( scrap )and 12 % from net Central bank sales, which has been a net seller
since 1989.
Investing into a Gold ETF ( Electronic Traded Fund )is one of the best ways, to hold gold, the advantages are :
1 ) Its is an electronic form, no worry of getting stolen.
2 ) It is linked to international gold prices, very transparent
3 ) Gold price premium is likely to be less.
4 ) Impurity risk is nil.
5 ) Can be sold easily.
6 ) Can buy as low as 1 gram.
7 ) No wealth tax on it. ( as of now )
8 ) Long term capital gains applicable, only after 1 year.
Just remember, gold`s price doesn't change much, it is extremely consistent, what decreases is the value of the paper currency.
Prices of gas, milk, etc. also don't go up or down, it is usually the value of currency going down.
