Gold as an investment. It was not long ago that the precious, yellow mineral was used as a form of currency. Gold coins are one of the oldest forms of money. It was only in the early 20th century that its use declined. Even though collectors praised the gold coins for their historic values and aesthetic charm, its worthiness as an investment asset should be celebrated.

Let us compare gold with other types of investments:

Real estate has been called a millionare-maker business in that ordinary people can purchase cheap foreclosed houses, and "flip" them by renovating and selling those houses at a higher price. Even just buying land and property by itself is a good investment. Real estate provides investments that are tangible, however they are not liquid. Something is liquid if it can be easily traded (i.e. it can be sold anywhere, rapidly, at very low transaction cost, and without advertising costs. As a result, the real estate investor cannot buy or sell quickly without incurring a significant price change due to the changing market.

The other side is investing in company shares or bonds. These types of assets are liquid (i.e. can be traded quickly), but are not tangible (since the investor does not physically own anything except a promise of dividends, if any). Still, many people use this type as their investment vehicle of choice.

Gold, on the other hand, is both tangible and liquid. One can physically own their gold investment either as bullion (gold bars) or as minted coins (containing additional value attained from being a collector's item). It is this property that makes gold investment tangible. In terms of liquidity, gold bullion and coins can be traded at any market exchange that buys or sells gold (AMPEX, American Precious Metals Exchange; Monex; Kitco) according to the current market prices.

For these reasons I would want to invest in gold. It is a currency that has much historic, cultural, and traditional value. What child has never dreamed of finding a chest full of gold coins, or opening a secret safe containing gold bars? Its not too late to have dreams come true.

Click here for my thoughts on silver.