Depending on your outlook for the market, gold or stocks may be a better bet.

Investors often park their money in gold or stocks as an investment. The two are very different forms of investments. When you buy stocks, you are buying a small share of a company. Your investment grows in value as the company becomes more valuable. In contrast, when you buy gold, your investment grows as gold becomes more valuable, generally because the demand for gold increases.

Most of the time, gold and stocks are inversely correlated. This is because when people when the economy is doing bad, people become scared and rush to gold as an investment. This is because gold can act as a hedge against potential inflation or currency devaluation.

In contrast, during bad times, stocks go down in value. This is because as companies make less money, they are worth less, and investors sell their shares for lower prices.

It is often wise for individual investors to have some investments in both gold and stocks. This way, they are diversified and some of their total assets will hold value, regardless of the circumstances. It is difficult for anyone to project the future of the economy, let alone gold and stock prices, so most individual investors are wise to have both cash and gold in their portfolios.

Nowadays, it is easier than ever to invest in both cash and gold. Both can be done through a standard brokerage account. If you signup through a broker, you can buy stocks obviously. You can also buy gold. The gold spider (ticker GLD) just holds gold, so its price reflects the price movements in gold. By buying the GLD, you do not have to deal with storing a bunch of gold somewhere.

One thing to consider about investing in gold versus stocks is time frame. It is generally believed that long-term, stocks are a better investment because you are investing in a company, not just a commodity. In general, this is true. However, the long-term can be painfully long. Japanese investors who bought Japanese stocks in 1989 are still down about 80% on their initial investments. Needless to say, they most definitely would have been better off in gold.

Whether stocks or gold is better for you depends on your outlook for your currency and the economy. The more pessimistic you are, the more attractive gold becomes. The more optimistic you are, stocks become more attractive. In the long-term, stocks are generally considered better, but this is not always the case. Because of all of these factors, most investors find diversifying between both of these assets to be the most prudent way to go.

Depending on your outlook for the market, gold or stocks may be a better bet.

Investors often park their money in gold or stocks as an investment. The two are very different forms of investments. When you buy stocks, you are buying a small share of a company. Your investment grows in value as the company becomes more valuable. In contrast, when you buy gold, your investment grows as gold becomes more valuable, generally because the demand for gold increases.

Most of the time, gold and stocks are inversely correlated. This is because when people when the economy is doing bad, people become scared and rush to gold as an investment. This is because gold can act as a hedge against potential inflation or currency devaluation.

In contrast, during bad times, stocks go down in value. This is because as companies make less money, they are worth less, and investors sell their shares for lower prices.

It is often wise for individual investors to have some investments in both gold and stocks. This way, they are diversified and some of their total assets will hold value, regardless of the circumstances. It is difficult for anyone to project the future of the economy, let alone gold and stock prices, so most individual investors are wise to have both cash and gold in their portfolios.

Nowadays, it is easier than ever to invest in both cash and gold. Both can be done through a standard brokerage account. If you signup through a broker, you can buy stocks obviously. You can also buy gold. The gold spider (ticker GLD) just holds gold, so its price reflects the price movements in gold. By buying the GLD, you do not have to deal with storing a bunch of gold somewhere.

One thing to consider about investing in gold versus stocks is time frame. It is generally believed that long-term, stocks are a better investment because you are investing in a company, not just a commodity. In general, this is true. However, the long-term can be painfully long. Japanese investors who bought Japanese stocks in 1989 are still down about 80% on their initial investments. Needless to say, they most definitely would have been better off in gold.

Whether stocks or gold is better for you depends on your outlook for your currency and the economy. The more pessimistic you are, the more attractive gold becomes. The more optimistic you are, stocks become more attractive. In the long-term, stocks are generally considered better, but this is not always the case. Because of all of these factors, most investors find diversifying between both of these assets to be the most prudent way to go.

Author: Robert5635a

About the author:
Are you interested in gold investing. Visit http://www.GoldInvestingInfo.info for information about why gold may be a good investment for you.

Article source: Free Business Ideas Articles.