Land or Precious Metals ?
Traditionally, investors have looked upon precious metals and other valuables as long term hedges against political and economic instability.
During times when inflation has soared, when currencies have weakened, when stock markets - such as during the current period of instability - have plummeted, precious metals have been seen as more attractive. The degree of their attractiveness seems to directrly correspond to the level of fear in the markets. Gold, of course, has been regarded as intrinsically valuable, accepted internationally and negotiable.
Demand for precious metals and gold in particular has been strong, in the wake of the financial uncertainties that followed in the wake of the September 11th attacks. Many investment portfolios have a small percentage invested in gold. But investing in precious metals is more complex than it first appears. Gold prices are also dependent on the wider conditions of market for bullion, and there are many ways of investing in gold - coins, ingots, gilts, shares in gold mining companies and so forth. Each is suitable for different kinds of investors.
Unlike building land, gold prices can fluctuate due to political and international events and changes in specific countries. They are open to manipulation by speculators, as well as changes in technologies involving gold, such as usage in the automobile industry. For example, the price of gold has deteriorated by 40% over the past few years.
Depending on how the investor chooses to invest in gold, there may be costs of ownership too. Banks, for example, may apply holding charges for precious metals, and there are no dividends to be earned from gold investment per se.
Investment in previous metals is also open to fraud, with investors advised to purchase their precious metals through banks or reputable dealers. Investment in gold can catch unwary investors, with large quantities being stolen by criminal gangs, involved in fraud or otherwise being of dubious origin or purity.
With the dot com crash and the recent accounting scandals the simplicity and transparency of investment land has gained many followers. There are no complicated concepts or international markets that investors need to understand with land, just that we have an ever-increasing demand for building land (as the UK's population gravitates to the rich South - East) and a restricted supply of development land.
Demand for gold is variable and subject to fluctuations influenced by the factors above, but demand for investment land is only likely to increase, because the supply of land for sale is finite. This is a quality of land that virtually no other form of investment has. This is exacerbated by the population of the UK gravitating towards the south east of the country, with building land for sale being increasingly sought by builders, self builders and other members of the public.
