31 May

Beating Inflation Using Commodities

GoldGoldWhen the U.S. dollar was removed from the gold standard in the seventies, its value went down and has continued dropping due to inflation. So instead of saving your money, the buying power of which goes down every year, why not purchase commodities instead?

Precious Metals

If you’ve been paying attention to the value of gold and silver, you will notice that gold had increased in value from USD 200 per troy ounce back in the early 2000s all the way to USD 1300 per troy ounce in 2012 before settling to just above a thousand dollars per ounce today.

The years between 2000 and 2010 were the dreadful years of American bankruptcies and the price of stocks dropped by more than 50%. If you had bought gold or silver then, you would have kept the value of your money as well as made a tidy profit.

Getting a Hold of Them

Nowadays, you can buy gold and silver online. Industry experts at Wasatch Steel note that you can even buy steel online if you want to stockpile girders and to sell later. When you make such purchases, you may either have them as shares in a commodities exchange or have the precious metals physically delivered to you. Of course, there are pros and cons to these purchases.

If you want to physically handle the gold, for example, then you would have to take care of keeping it safe and pay more to acquire it. If you keep it with a commodities exchange brokerage then the brokerage must be sufficiently trustworthy. Otherwise, they might sell more gold than they currently have and run short when their customers suddenly want the physical gold.

Be cautious with your purchases, though, especially in the case of commodities. Consulting a financial adviser is important since each person’s financial situation is different. Advice that works for some may not work as well for you and can be detrimental to your financial health.