Gold has always been a smart, long term investment for investors. It hasn’t been until the housing bubble crushed the stock market and volatility started to become a daily occurrence when owning gold has become a common thing. But smart investors own gold.

And for good reason. In fact, in this post, I highlight 6 concrete reasons why it makes sense to add gold to your portfolio. You can do this either by owning physical gold or by investing in gold related stocks and exchange traded funds.

But no matter what path you choose to add gold to your portfolio, know that you will be one of the many smart investors own gold.

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6 Concrete Facts Why Smart Investors Own Gold

#1. Weak Value of US Dollar

The US Dollar is fiat currency, which means it is not backed by any physical asset. This wasn’t always the case. For decades, the US Dollar was backed by gold.

The fact that the US Dollar is not backed by gold is important to know. For example, look at the ballooning budget deficit that the United States continues to add to. This only puts more pressure on the value of the US Dollar.

As the value drops, it costs more money to buy goods needed for survival. By investing in gold, you have an asset that has a much more stable future and thus, is a better investment.

#2. Increased Demand

Basic economics teaches us that supply and demand work together. As demand rises, the price of the good increases. As more emerging markets evolve, they along with their citizens demand gold as it is seen as a symbol of wealth.

And as these economies continue to strengthen and more citizens move into the middle class, you can be sure that demand for gold will only continue to increase in the coming years.

#3. Production Constraints

It costs money to mine gold. Add to this the fact that it can easily take close to 10 years to get a new mine running smoothly and at full capacity and you can see why more companies are not mining for gold.

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