It used to be that gold was standard of most world currencies, but this began to change around one hundred years ago, when governments began to transition away from currencies backed by precious metals to a “fiat” system, where currency is instead controlled by a central bank and the faith in the country by world markets. Prior to this, in for example the United States, all metal currency was actually made with precious metals which had real intrinsic value, and you could trade your paper money in for the gold equivalent at any time.
The fruits of this change are apparent in most countries today, whereas even when that country is performing relatively well, inflation has still drastically altered the buying power of that country’s dollar. The good news is that there is an easy and simple way to protect your investments from this kind of loss of wealth. It’s not a new kind of investment strategy – far from it! In fact, it might be the oldest investment strategy in the world. And contrary to other methods of protecting your assets, it has also never failed.
To delve into this question further, we will explore the topic of what money actually is. When you ask most people this question, they’ll reach into their wallets and pull out a twenty dollar bill – but that’s not quite correct. In the United States, paper money is printed with the notice that it is a “Federal Reserve Note,” which is not actually money, but “legal tender.” That means that even though it isn’t backed by precious metals, it can be used to satisfy debts and pay for goods and services as long as the government that backs it is stable. It’s not redeemable for gold or silver money – just a promise made with ink and paper (or plastic, depending on which country you live in).
That’s why, when times get financially tough, smart investors do what they have done for literally thousands of years, which is to buy precious metals from a reputable firm such as Guildhall Wealth Management, which has been helping their clients do just that since 2002. There is no better way to protect your wealth, because gold and silver never lose their intrinsic value. Unlike modern currency, physical assets can’t be created out of thin air, so there is no corresponding “inflation.” And as a demand for these materials grows, either due to new manufacturing techniques or rising instability around the world, they can actually increase in value at a much faster pace than other investment types!
The financial experts at Guildhall Wealth Management will tell you that there are numerous reasons why purchasing precious metals is a good idea when diversifying your investment portfolio. For instance, contrary to what most people believe, inflation is not a normal function of time. In the United States, the amount of goods and services you could buy in 1936 for 100 dollars would cost you around $1,800 today in 2016. That is, of course, using currency – but if you used gold or silver it would cost you exactly the same. That’s why the best way to protect your assets for your retirement is to concentrate some of your wealth in precious metals. If you live in Canada, now you can even buy gold in RRSP through Guildhall Wealth Management. There’s perhaps no better way of ensuring the safety of your assets by backing them with real money!