One of the greatest privileges - and prerequisites - of being a successful investor is that you get to be in constant awareness of the way the markets are performing, moving capital into sections of the economy that are performing better than the others, and realizing massive profits as a result ... And if you are an investor, then you too may be wondering which sections of the economy will be the best performers in the near future. And if you are a real estate investor who is thinking of buying even more real estate in light of the current trends in the real estate markets in the hope that these trends will stay strong for a long time to come, then you might want to pause and consider this ... Will the precious yellow metal become the darling of investors all over the world now? Well, in case you have not already read about it, gold prices have are at a 25 year high, and it is only in the last few months or so that this metal has become a super star performer ... Considering that gold was called a "barbaric relic" by none other than the great John Maynard Keynes and has long been given up an a benchmark of currency by every country, does it not come as some surprise that the people of the world still choose to love this metal so much that many want to hoard as much of it as they can, even while they can buy other forms of assets? And if the people are right in choosing gold over other forms of money offered by their Governments, does it imply that people are wiser than their Governments are? And ... Why do people prefer gold to other forms of money anyway? The first question may best be left unanswered and to answer the second question, we may want to take a look at the factors favoring gold as a shining investment option... Gold is regarded as a storehouse of value: Gold, unlike other currencies, shows a remarkable tendency to hold its value and is not subject to inflation like most other currencies. Its purchasing power does not seem to diminish with time. Gold is rare: Gold production rarely grows by more than 2% a year and unlike most other currencies, little can be done to increase its production rate. Gold is not controlled by Governments: Gold is free from Government control and Governments cannot change the value of gold in any way. One question to ask now would be... Can gold prices keep increasing for a long time? Well, the answer to that question may not be very clear cut. Some analysts feel gold is overbought and its prices may fall soon, some others see a long term bull market for gold regardless of any short term fluctuations in the gold market. And in case you are really interested in gold and would like to know what could drive gold prices, well... Here's one thing that can drive gold prices wild If people get tired of stocks, mutual funds and currencies which are susceptible to inflation due to any number of things and start looking for a safe haven for their money, then there could be a record influx of capital into gold market as people scramble to hoard as much gold as they can, then this can drive the market to dizzying heights never seen before. And now, let's take a look at ... The factors that favor real estate... With a relatively healthy economy and well paying jobs, more people are now able to realize the dream of owning a home, and this is creating a huge demand for housing. With the amount of usable land being limited, an increasing population with better paying jobs can mean the housing market will stay healthy for a long time. But if you want to decide whether to invest in gold or invest in real estate and would like to hear a definitive answer, then you might want to remind yourself that no analysis can claim to be fully accurate ... and even the best analysis may be only a little better than a opinion at times ... So when it comes to choosing gold over real estate or the other way around, then only your intuition may be your best guide! |
