Gold has outperformed a wide range of investments over the years, but surprisingly enough there are still millions of Americans who do not own any gold. What’s more, many of these individuals have stayed on the sidelines only because they are confused by the vast array of gold investment options. This confusion is the topic that I would like to discuss today.

It has been scientifically proven that it is easier for humans to make decisions when there are only two or three possible choices. Otherwise, the task of evaluating each possible choice becomes so daunting that it frightens us into inaction. The gold market has recently seen the innovation of a slew of new products, but at the end of the day there are really only two options: paper gold or physical gold.

Paper gold investments, also known as gold derivatives investments, are investment vehicles that have something to do with gold but do not involve the physical delivery of product to the investor. Examples include gold mining stocks, gold ETF investments and gold pool accounts. The calling card of such investments is that they are often supposed to closely track the gold spot price but rarely do, and at the end of the day you still need a piece of paper to prove ownership.

Physical gold investments are exactly what they sound like: investments which involve physical gold. One can buy gold bullion bars, gold bullion coins or certified coin investments and immediately become a part of the physical gold investment market. Bullion has always tracked the spot price, while certified coins often track the spot price and sometimes outperforms gold bullion over the long-term.

Investors who want to turn a quick profit may do better with paper gold investments, but safety-minded investors will get what they are looking for by buying into the physical gold market. It’s that simple, so if you are one of the millions of Americans who as of yet does not own gold, you have two options. It’s a simple question of what is more important to you, profit or safety.

The flood of investors fleeing the gold derivatives market is continuing, and according to some sources may even be worsening. London-based ETFGI Ltd. reported today that $6 billion in gold ETF products were sold off last month alone.

While some investment analysts have pointed to stock markets and bonds as the places where these fleeing investors have headed for refuge, others believe that investors are simply trading one type of gold for another.

“There are two distinct classes of investors who owned exchange-traded funds,” said Larry Mabell, chief researcher for Gold-Investment.info. Institutional investors like banks and fund managers own very large portions of the ETF market up until last month, but those investors have since sold their shares of GLD and other ETFs in favor of more traditional stocks. Additionally, there is at least on gold ETF out there that automatically converts into a Treasury bond once the gold ETF goes down a certain amount, and that has taken some of the money away from ETFs.”

“The second set of investors is comprised of your average American household investors who are either retired or have other full-time obligations,” Mabell added. These investors have sold a lot of their ETF holdings, too, but instead of stocks or bonds they have opted to buy physical gold for more safety. Since this second group controls much less money than the first group, the gold price has laid flat even though lots of gold coin and bullion buying has been happening.”

Visit the Gold-Investment.info Blog again on Thursday for the latest news, data and commentary on gold investing.

Gold investing is not a task to be undertaken lightly. Since the gold boom began in 2001 that statement has never been more true. New gold dealers come into and go out of business each day. The purity, weight, design and numismatic value of coins is constantly changing. Brokers of other investments, such as stocks, bonds and real estate, compete fiercely with the golden bull for your trust, and your money.

If the gold investing market seems too confusing for you, you are not alone. Many investors have decided to place their funds in interest-bearing accounts, mutual funds and property. Such investments are not necessarily “bad” but with our economy in shambles they may not be wise. The fact of the matter is that all investments carry inherent risk, but if one is more interested in making the “easiest” investment, like a CD, or the most visible investment, like property, than making an investment that can protect purchasing power, gold is not the way to go.

If, however, you feel that the housing market is due for another downfall, and you realize that your bank’s interest rates are going to leave you unable to keep up with inflation, much less make money, then gold investing could be a good idea. If you are interested in buying gold, silver and/or platinum for home delivery or for your IRA or 401(k) then email or call Gold-Investment.info today at 800-300-0715, or select your free gold investment guides below, which can be emailed or “snail mailed” to you.

It is relatively easy to picture an ounce of gold, maybe in the form of an American Eagle or Canadian Maple Leaf. Even something like a kilo bar (32.15 ounces) is something you can see in your mind’s eye, even if you may never hold one. The amount of gold that is traded in the physical market and the derivatives market, however, is unfathomable.

Consider, for example, SPDR Gold Shares Trust (GLD), an exchange-traded fund backed by physical gold. The premise is that investors can buy into this fund and their money should track the price of gold. The problem is that since investors are buying into a company that owns gold and not gold itself, problems can arise. There is overhead to pay for and employees that need to be paid. It costs money to store and insure the metals, and when gold goes down the company sells some of those holdings.

SPDR has liquidated 300 tons – over 600,000 pounds, or 9.6 million ounces – of gold this year alone. The fund currently holds over 1,000 tons of gold in its vaults, but that figure is astonishingly lower than the numbers from a few years ago. SPDR used to be the premier gold ETF. Now, with a value of approximately $46 billion, it barely cracks the top five.

Yes, physical gold has gone down in value as well, but it is still an investment in a hard asset, unlike ETFs and other derivatives. Since you can hold it, use it and it doesn’t cost money to operate, physical gold investments are looking pretty good right about now.

This morning I received a great deal more emails than usual regarding the selling of gold investments. I seems as though the crash of the gold price on April 12-15, the recent trend of high-volume fluctuation during day-to-day trading and the dollar’s seemingly unstoppable strength as of late has spooked American household investors into considering liquidation of their gold holdings.

This is a shame, for two reasons. First, if you wanted to sell your gold and take profits from the market, I’m sorry to have to be the one to tell you this but you missed the boat. Savvy short-term investors sold their gold as soon as gold passed key support levels during the mid-April sell-off. Selling anytime between April 16 and today meant a loss for most investors who had not been in the market for a long time. I’m all for dollar-cost averaging but if you see the gold spot price fall by $200 per ounce in just a couple of days and you don’t sell then, you certainly should not sell a week or two later if prices are in the same range unless it is absolutely necessary.

The second reason I question individuals who think now is the time to sell has to do with the gold investment market variables. Think about what factors motivated you to buy gold in the first place. For me, the unholy amount of government (the United States now borrows 43 cents for every dollar it spends) coupled with the fact that gold was on a 3-year winning streak (I first bought in 2004) after remaining in a bear market for the previous 20 years. Other people buy because of inflation, deflation, interest rates or because they just don’t like the monetary strategy of our nation’s leaders, which is understandable. Have any of these factors changed or become less severe? Not at all. Therefore, unless you really need to create some liquidity, now is one of the worst times to sell your gold and silver.

As a gold investor, broker, market analyst and pundit I am constantly being asked about my thoughts on various aspects of the gold market. One question that keeps popping up lately is that of selling gold. Selling gold is always a popular topic but recently the questions have less to do with “how” to sell gold or “where” to sell gold; these days people want to know if now is the right time to sell gold.

I’m a firm believer in “the right investment, for the right person and at the right time” so by that way of thinking there is no one blanket “time” to sell gold. Gold doesn’t pay interest or dividends, so if you need to create liquidity, it is the time to sell gold. If you believe that gold’s bull run is completely over, you may want to sell your gold. If you have recently found new reasons to trust our government in its monetary policies, then you may not feel the need to own gold. As for me, however, I am not going to sell a single ounce of my gold, and here’s why.

Gold could drop another $50-$150 per ounce before it starts to rise again. Then again, it may not go below $1400. Either way, a little bit of extra profit is not a convincing enough reason for me to part with my gold or silver. Not with quantitative easing, incessant currency printing and interest rates this low.

Once savvy investors buy gold, they do everything they can to keep it. There is never a “bad” time to own gold, because even if you bought at $1600 per ounce in mid-April (before the crash that sent gold investing prices to $1400) you are still liquid and you have something that will move against a mostly falling dollar. Additionally, you have a hard asset that could be used to work for you or your family in a national or personal emergency. If you have to sell your gold now, that’s what it’s there for, but if you don’t need the cash, I suggest you stick around for the long run.

It’s a wonder to me when I hear that gold serves no meaningful purpose in our global economy and that gold investment is a waste of money. History is clear that the one asset that has always come back to show its importance has been gold. Yet, we still hear these absurdities in the media. Look at countries like Iran who assert that their gold reserves are approximately 907 tonnes. Well, good for them, because if they didn’t have it they wouldn’t be able to sustain their people for they are using gold and/or oil to purchase food because the latest financial sanctions have penalized its facility with which to import basic necessities for its 74 million residents. Desperately speaking, they have turned to the precious metal in hopes that they can pay for their imports. And this is all occurring before President Mahmoud Ahmadinejad’s referendum of economic policies.

Due to Iran’s nuclear program, new sanctions dictated by the United States as well as the European Union will penalize, but will not block firms from selling Iran food, they only make it complex to carry out the international financial transactions needed to pay for the provisions. According to a European grains trader, “Grain deals are being paid for in gold bullion and barter deals are being offered.” Many are embracing this manner of exchange such as the major trading houses. Everyone seems at ease because it is much simpler to get the imports with gold as the payment. This is the everlasting power of gold.

Despite Iran’s obvious need to sustain its people, any bank that makes transactions with the Iranian central bank will be disciplined by the U.S. They still command authority of the world’s dollars in New York notwithstanding the fact that the dollars are owned by others. Don’t forget that the United States can hold the dollar reserves of any country whenever they please.

As for gold, its price may or may not be affected by the acute circumstances in Iran. If there is a menace of other nations mirroring their conditions, then their currencies will devalue and the gold price will climb in the currencies of those countries. What Iran’s situation embodies is a typical representation of why gold is a final option, reserve asset. Across borders, Iran’s currency has absolutely no value which is why the fact that it has gold means it can continue providing for its people. Gold is functioning as gold does because its worth is very much recognized and respected across the world.

It is said that very cautious central bankers are stocking up on gold reserves as well as others who have the means to do so, too. It is the market which is preventing too much access.

It is a fact that the gold’s price in the Iranian currency has increased incredibly yet the country’s currency is worth nil when you step out of its borders which is why it really does not matter what the gold price is in a currency. What does matter is how much gold you actually have in your possession. The more gold investment you have, the better off you will be when times get rough.

Gold investment is returning to where it should be. According to the World Gold Council (WGC), the claim for gold rose 4% last year regardless of higher prices. Gold prices have risen roughly 28% every year.

In the jewelry and investment arena, it was China who led the pack throughout the last quarter of 2011. Demand in India declined after holding first place for 11 quarters. Despite this, throughout the year, India bought 933 tons in 2011 as opposed to 770 tons purchased by China. This tendency by China to be on a relentless track of buying gold has just begun. As reported by HSBC Global Research, gold imports from Hong Kong were 10 times the norm from January through November 2011 even though they were down by half in December. HSBC anticipates this rise to persist as Chinese incomes will continue their claim for gold. It will most likely be domestic demand which will incite at least 20% growth in the gold petition by China for this year.

Notwithstanding their heavy demand, India’s esteem for gold does not depend on external determinants which will place it again in the top spot very shortly. The WGC’s managing director for the Middle East and India, Ajay Mitra, stated that gold has always been a part of India’s history, culture, and tradition. She has personally observed the forte of this connection in many different circumstances. She even goes so far as quoting a traditional Indian maxim which expresses that if there is no gold before a wedding, then there will be no wedding. Period.

On the other side of reasons for investing in gold are the ones that are driven by the Federal Reserve when it openly indicated its plan to maintain inflation at unusually shallow levels for at least 2 more years. The Federal Reserve’s goal is to maintain a 2 percent inflation rate, which translates into a 33 percent loss in value of the U.S. dollar for the next 20 years. Approximately 10 percent of the value of Americans’ reserves will disappear into thin air in the next four years. This will be our reality. After the gold standard was halted, more or less 40 years later, the purchasing power of the dollar has been sinking. When we think we have a dollar in our pockets, what we really have is 18 cents. Sad, huh?

Warren Buffet blames the government and its universal powers for abolishing investors’ purchasing control. His justification is that stock investments present the greatest long-term investment prospect because interest rate levels do not affect the loss of purchasing power because of inflation. Nevertheless, there are those will be happy with the low interest rates because of their high debt. The governments of the developed world will now have the opportunity to deal with their massive levels of debt effortlessly. If we only look at 2012, the U.S., Japan, and Europe will relinquish $8 trillion in federal debt.

At this point in time, there is no turning back. And it is only gold that will offer the best security against long-term purchasing power as well as wealth preservation. This is why we must all continue our gold investments or risk losing everything.

It gets tiring to hear comments of how gold is nothing other than a shiny yellow metal to look at and admire…to invest in gold is synonymous to wasting your time. It appears that the majority of investors at this crucial moment in time only restrain from gold to criticize it just as Mr. Warren Buffet did in his most recent shareholder correspondence. It was actually a rather routine assumption that gold does not and will never have the ability to generate anything other than fear-driven investors. I still can not discern as to why Buffet would communicate these absurdities, but I am analytical and must look beyond the shallowness of some to find what lies beneath. And, I believe it could be related to Benjamin Graham, the man who guided Buffet and to whom Buffet will be eternally grateful for all the wise pedagogy he received.

I must be fair in saying that Benjamin Graham is a much revered investor. He is the person behind Security Analysis (1934) and The Intelligent Investor (1949). During his career, which lasted from 1915 to 1956, he developed his investment ideology turning into the person most would look for when defining investments and their values. What we understand today as modern portfolio theory we can thank Graham for. He is known to have understood best the reason for overvalued or undervalued stocks and bonds and why they would stray. Even Graham believed in varying portfolio allocations so they best suit one’s needs as well as yield pertinent profits. So what did he have to say when both stocks and bonds idled or simply dropped altogether? If we take into account what occurred four decades ago as well as what happened from 2011 up until now, it is very clear that portfolios which included only stocks and bonds have somewhat desperately tried to come out even or simply plunged. Any smart investor would have realized this and done something about it immediately.

What could have been done? The addition of gold to these portfolios would have turned their profits around. The overvaluing of stocks and bonds is best fought with the precious metal. But then, why is gold not included in Graham’s allocation design? There is a simple answer to this and it lies in the fact that while Graham was an adult and was in the prime of his career, it was not possible to own a lot of gold. Remember that in 1933 it was prohibited to own gold personally. Then in 1974, it was legalized anew. Unfortunately, Benjamin Graham passed away in 1976 and was never able to benefit from a life where gold was considered superior to stocks or bonds. And this is why in today’s investment forums, gold is belittled. Consequently, this is also why Warren Buffet gets his signaled crossed when referring to gold. In this day and age, the best strategy to use is recognizing that a profitable portfolio distribution is destined to be comprised of three large investment classifications which are stocks, bonds, and gold. Relative valuation should guide one in the distribution to each class. Those who heed this wise advice will advance across the board.

Don’t get agitated when the media puts gold down; just remember that you are living in the present and according to existing circumstances. Presently, one must invest in gold and be protected with the comprehension that it meets a vital and particular intention in a portfolio. At this moment it can be best expressed as real money that safeguards your wealth during times that are characterized by unreasonable government obligations and currency devaluation such as we are now enduring.

Global gold investment demand demonstrated substantial development in 2011. Conversely, jewelry and technology sectors were a little shaky, according to the World Gold Council. Despite their modest decline, they are still perceived as peppy in the perspective of elevated double-digit gains in average gold prices year over year in practically every currency of the markets that were tracked by the WGC.

What is foreseen? Good news and more good news. The current year brings with it the same elements that reinforced gold demand in the past year, except this time around they are stronger and more powerful.

The real interest rates, which are most of the time negative, will continue to induce power into gold demand. From this we will, once again, feel the inflationary strains which will also drive gold demand higher. These extremely ground-level or negative real interest rates along with the latest declarations by the Federal Reserve about maintaining rates very shallow until more or less 2014 will offer sustained support to gold demand world-wide.

Concurrently, in countries which suffer from high inflation such as India, China, and Vietnam, gold demand will be even more attractive when gold’s function is perceived as a hedge. Additionally, inflation worries in western markets will be another incentive for investment demand. It is there where a number of investors are apprehensive that the prevalent spread of monetary policies is furnishing stimulation for hidden rapid inflation expansion.

We cannot exclude Europe when examining the upcoming year’s investment sector. Their predicament affects a large portion of the world of economics. An additional incentive for investment demand will arise from the questionableness over where the euro will end up due to the continuing hindrances in the region. If we turn back to investment demand before 2008 and compare it to now we find that although it is not as high, its gamut is considerably superior.

The position by central banks to swell their gold reserves will be another important factor in the precious metals future investment projection. These reserves have risen by more than 500 tonnes since 2010 mostly coming from the emerging markets. The elements driving this fortitude are not going anywhere anytime soon so the projection holds firm. One factor is the sustained expansion in foreign reserves that are already rather large and for others it is the desire to become more a part of the gold arena which would aid in not being only contingent upon one or two foreign currencies. Reestablishing the equilibrium between gold and foreign currencies was another issue behind the purchases. The ultimate determinant, though, would have to be the benefit gold offers in terms of safeguarding the wealth of a nation and fostering economic equilibrium.

And then, of course, China and India will continue their substantial bulk of consumer demand because of their connection with the metal as a traditionally close element to their being. Despite this, though, China is somewhat tempered economically and if we affix the intensification of market security what will likely occur is a stagnation of the latest growth rates. This is actually in progress based on the numbers that have come from the previous quarter. India, on the other hand, does not have many days that are considered encouraging in this year’s calendar which will result in a leveling of gold demand.

But, overall, gold investment should have another positive year.