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No matter what the price of gold is, you might wonder why you should invest in it. Historically, investing in gold has been the proven method of maintaining value when stocks are going down, inflation is occurring, and/or the national currency is being devalued. People have invested in gold since the recorded history of time.

Investing in gold is similar to having an insurance policy. If you fear that rough times are ahead, investing in gold would be the right thing to do. Gold is now almost at $1000 per ounce and many people predict it will continue to rise for some time.

Although gold has done very well for the last 5 years, it did not do well prior to that. The 80's and 90's saw very little movement in the price of gold. This is something to take into consideration when deciding whether to invest in gold. Nothing is guaranteed and the current price of gold may not hold as it is already historically high. However, for the concervative investor who wants to protect themselves from inflation and the falling stock market, gold is a good choice for your investment dollar.

The main reason that gold does not lose value over time is that the amount of gold is finite. The price of gold has to do with, among other things, how much of it is mined. As the dollar goes up or down, gold also moves with it. Inflation is a bad thing for the value of the dollar and so people try to protect themselves by investing in gold. Gold has never gone to zero in the history of the world. This is of course much different from stocks of companies that can and do go to zero when a company goes bankrupt. Conservative investors are more likely to be drawn toward gold for this reason that gold will always be worth something.

It is probably not wise however, to put all your investment money into investing in gold. You should pick a percentage that you feel comfortable with such as 10% or 20%. Of course if you feel you really want to be safe and you feel that really tough times are ahead, you might choose to make more of an investment in gold. Whatever you do, you can rest assured that you will will be safe as the current price of gold will in all likelyhood remain constant.

Foreign exchange (FX) is basically the process of trading one country's currency for that of another. In a global market with hundreds of currencies in use, this is a necessary process if international trade is going to occur. The international exchange rate is what determines the value of a country's currency compared to that of another. The open trading of currencies in the forex market creates the fluctuations in the market values of the currencies.

The concept of foreign exchange has been around as long as trade between countries with different currencies has been transpiring. Foreign exchange has been documented as far back as biblical times, but Julian Walmsley, author of The Foreign Exchange and Money Markets Guide, claims that the foreign exchange as we know it today did not actually develop until the 1800's when cable transfers took place between the cities of London and New York City.

From a historical standpoint, in order to improve a country's trade position, governments attempted to establish exchange rates individually. When a country set its exchange rates lower than the rates of other countries, it was doing this in order to improve its trade position. It would make its exports more affordable, while at the same time making its imports from other countries less affordable. Trade wars were oftentimes the result of this practice as it caused other countries to struggle for a better trade position.

Most major countries have been allowed to "float" their currencies --- a technique that allows a country's exchange rates to be determined by economic supply and demand factors within the different currency markets. Floating currencies has been allowed since the early 1970's, so this is not a recent concept in the forex market. The purchasing and selling of foreign exchange reserves enables countries to fine tune their exchange rates by keeping reserves of foreign currencies or gold in the central banks.

Market Composition

There are thousands of businesses and governments worldwide that purchase, sell, and trade different currencies. However, the foreign exchange markets are decentralized. Since rapidly falling or unstable prices can create economic destruction and even the death of a country's economy, most governments have a keen interest in what rates are doing in the forex market. When a government is involved in the purchase, sale, or trade of foreign currencies, it is basically trying to influence the exchange rate of its own currency. It also provides the country an opportunity to intervene in the foreign market via open market activities.

Other common participants in the forex market are commercial banks, foreign currency brokers, and portfolio managers. Currencies are seen as an investment instrument to these financial entities. Sometimes, rather than selling to a foreign concern, they will sell to their own customers such as exporters, importers, or multinational companies that require the conversion of currencies to operate their businesses. Commercial banks are normally the larger users of the forex market, often serving as the intermediary between the purchaser and seller of a foreign currency.

You read about it every day. The real estate market is going down the drain and the world is coming apart, right? That's certainly what it seems like if you read the newspaper or watch the nightly news. But is the real estate market really that bad? Is there still money to be made? You bet there is money to be made and this article will show you how a simple investment in a great property can get you started on the road to financial security for you and your family.

Now is a great time to buy a house at a bargain price. We never want to take advantage of other people, but if we find a house that an owner cannot afford and we take it off their hands, making their problem go away, we've done them a favor. If we can get that property for a great price, we can start to build real wealth for ourselves and our families for generations.

Let's say we find a great property we are able to buy for $100,000 in cash and it appreciates at 4.8% per year. In fifteen years, the value of that property will have doubled. Using a technique called the rule of 72s, we can calculate that at the end of 15 years the property is going to be worth $200,000. In this example, we'll say that the house was renting for $1000 a month and that we never raised the rent for the whole fifteen years. If we did increase the rent at all, the money would go to paying expenses, such as taxes and upkeep of the property.

So how much did we make at the end of 15 years? Well, $1,000 x 12 months = $12,000 per year. Over the 15 year period we are holding the property we would have received $180,000 in rental income. So we would end up with $380,000 total, right? Follow along: First, we received $180,000 in rental income ($1000 per month x 12 months x 15 years). Next, the original $100,000 we used to buy the house has increased to $200,000 by the rule of 72s. Adding these numbers up gives us a total of $380,000. If we take out the $100,000 that we originally paid for the property, that's a $280,000 profit that we realized!

How many of you know someone who has made a quarter of a million dollars in the last fifteen years and still has something to show for it? You can do it if you have $100,000 today, and you bought $100,000 home, that's what you would have fifteen years from now. The property would be paid for, and when you take out what you had in it, you'd be worth over a quarter of a million dollars.

Now this is just one technique to use real estate to build huge wealth. In a future article we'll talk about the power of leverage and how we can use this same $100,000 house to build a net worth of nearly $2 million dollars!

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