Opportunities & Threats in Gold & Oil Investments Research Paper

Opportunities & Threats in Gold & Oil Investments - Research Paper Example gibe to the research findings with the ever increasing uncertainties regarding the overall global economic and fiscal outlook, the coronation strategies have also experienced some major changes. It is actually feeling and confidence of the people that changes as the time and situation changes. As a result, the strong value of the investment changes with the perception of the people. The real worth or tenderness remains the same, however, the other party to the transaction perceives it to be either on a higher side, lower side or at a durable level. In short, the substance of the investment remains the same but what actually changes is the worth of that investment in the eyes of other person as per his/her perception, vox populi and confidence. The change in the perception of the people leads to the change in the worth of the investment as a result the investors actually face a find that their investment s send packing experience significant fluctuations associated with the unpredictable behavior of the people. Over the years, there have been different patterns and trends that represent the psyche of the people regarding the riskiness of different types of investments. From bonds to stocks, commodities to metals, currencies to real estates, each different class has different sorts of risks associated with it. The risk appetite of individual investors also varies which in turn contributes significantly in the variation of the values of the investments. (Fabozzi, Gupta & Markowitz, 2002). The in a higher place mentioned asset classes can be broadly split into ii categories namely as paper money investment and real substance based investment. For instance, currencies, bonds, stocks atomic number 18 considered as paper money as the investor ultimately do not acquire a physical substance or matter when he or she purchases investment. For example, by buying some shares of a company ca nnot actually allow a common stockholder towards entitling a specific asset of the company. Similarly the bonds or other paper money instruments do not allow ennoblement to the investors on a particular asset of the issuer of that instrument. On the other hand, the non-paper money instruments provide a self-discipline of the investment in the form of goods, property or any other physical substance. The term physical delivery for these kinds of investments is vastly associated as they entitle the investor for the taking the actual physical delivery of the form of their goods (Shefrin & Statman, 2000). For instance, in case of metals, gold, silver or platinum, the physical delivery is possible and the investor can keep the possession of the metals with himself. Similarly, in case of real estate property, the investor can actually take the possession of a particular property after transferring the property documents. The above two categories of investments have some specific risks as sociated with them due to which the non-paper money based investments are considered as safe heavens for the investors as the investor enjoys the possession of those investments and later on can make the use of those goods for his/her face-to-face needs unlike paper money investments which are intended to be returned to other investors or the issuers of those investments because they cannot be used for personal needs. On the basis of usage or consumption as well as holding the possession of those investments, this particular assignment deals with the opportunities and threats that rest with the investments that are assignable in nature (FinanceSpain, 2012). Particularly the investment in gold and oil are highlighted in the discussion. Gold is a precious metal which is the most super recognized and consumed metal especially used in the jewelry and ornaments. Oil is the commodity which is used as an energy resource for varieties of different purposes. Both of these investment class es have distinct opportunities and threats which are discussed separately in further sections. The first section emphasizes on the opportunities