Gold

Gold as part of your investment portfolio

After posting several articles on BullionStar Singapore, a number of readers had emailed me to query my views on the gold market developments. Generally, I am still confident in the long term prospect of gold due to the emerging middle classes from India and China accelerating gold demand.
But more importantly, to be successful wealth builders, I believe investors should hold bullion in their investment portfolio. This is because gold prices often move in opposite direction to stocks and currency. So allocating gold in your portfolio can help to serve as a form of hedge against inflation and preserve your portfolio’s value.

Holistic view on gold investments
How do you become rich through investing in gold? The matter of fact is, investors should hold a long term view on gold and not expect quick returns from the precious metal. They should consider it as a form of diversification to lower risk for their investment portfolio.

gold bullion

Very often, I read articles from many bloggers in The Finance.sg sharing their own stock investments. Many of them pumped in hundred of thousands of dollars on shares, REITs and ETF. Their investment performances were impressive indeed but if the stock market plunged suddenly, large portions of their investment values would be wiped off overnight. How many of these investors can stomach such market swings? That I don’t know but all I know is that every portfolio must be balanced and focusing too much on stocks in your asset allocation is not healthy at all.

Believing in physical gold
Like many gold investors, I only believe in physical gold. In fact, according to London Bullion Market Association, on most trading days, 90% of transactions happened in physical gold and only 10% are in derivative market.

Actually this is what is happening in Singapore now. In spite of the plunge in spot gold prices, many people are rushing in to buy physical bullion. In a Reuters interview Zane Lim, regional manager of operations at Singapore-based dealer BullionStar said “The paper market is dropping but we are seeing a different story in the physical market. Everybody is buying and no one is selling.
We are not seeing any signs of slowing down. People are still thinking it is a good price to go in at,”  He added that most of the bullion dealers in Singapore were sold out.

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Magically yours,

SG Wealth Builder

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