Matter of opinion. People do make money in commodities. It's a matter of supply and demand and timing. Right now demand for gold is running about 1,000 tons higher than annual gold production. There can always be some volatility in a traded product, but gold is not going to plummet any time soon with demand this high. I don't have a huge amount of gold, but I have some and it has appreciated significantly and will never be worthless, which is a chance with some technology stocks I hold. It's cloaked from the taxman's audits, it's portable and exchangeable around the world.
Dynamite is a poor choice of instrument for a friendly game of catch, but that doesn't mean that it has no place in the world. Gold was in a bear market for 23 years, from 1978 to 2001. After Bush cut taxes, started fighting wars, and passed prescription drug coverage without FUNDING IT (i.e. fiscal irresponsibility), the die was cast and the dollar was toast. How do you protect yourself from a toasted dollar? Gold is a time tested store of value in periods of inflation. You can't just print it, you have to go in the ground and dig it out, which is why it is different from a paper dollar. Also, there is not debt on gold, and it can't go bankrupt. One bad thing, it does not pay interest, so no income. It's just another tool in the investing universe, like euro bonds, collectible art, diamonds, real estate, oil futures, stocks or bonds. If you can deploy it at the right time you can make money. Obviously there are times when holding it is horrible, like 1978 to 2001, 23 years and it just went down from 850 to 265. Real bad. Lately, its been real good. It's a good hedge against inflation and a weak dollar. One of my concerns with gold now is if whoever we elect pres. makes an attempt to reduce the budget deficit and return the country to a fiscally responsible path, the dollar would strengthen and gold could fall. Not likely before 2009.
me too. im gonna wait til it drop half its value before i buy. im not confident enough that the world is gonna end with this housing market credit issue.
Gold is one funny investment. Part of its trading is on fundamentals, as an inverse to the value of the dollar. But when it starts moving, there is something magical about the word "gold", and it seems to trade a great deal on emotion. That makes it scary. Remember the "tulip bubble" in Holland? If you look at a point and figure chart on gold, right now it sits atop a long pole. That is usually an invitation for a correction. But since gold trades on both fundamentals and emotion, and emotion can be a huge component, I don't trust it to enter at this level. Now if you look ahead 20 or 30 years, with the US unfunded liabilities, our 9 trillion cumulative debt is projected to grow to 40-50 trillion, due to SS and Medicare. I hope it doesn't get that bad. Medicare is much worse down the line than SS. For SS, I expect a combination of actions, increased taxes, means testing so the rich don't get benefits, move the start age to get benefits back later in life since we live longer. But the long term prospects for the dollar are not that great if we don't get our fiscal house in order better. How do you deal with that? Hard assets (house, gold), foreign stocks and bonds go up as the dollar falls. I expect the rate of decline of the dollar to slow, it has been decimated the last seven years, falling by 50% vs. the Euro. That can't continue, or we'll be like Brazil in 1999. Gold was 850 an ounce in 1978; on inflation alone today it would be about $2,500 an ounce. It's not, hence SupaFans concern about gold as an investment. Usually, 9 times out of 10, he's right.
Really? Why more emotional than any other trade? Where do you hear this? I think people buy gold jewelry on emotion, but investors buy gold bullion or gold futures on its potential for growth and its relative stability in a diversified portfolio. No, I don't remember the tulip bubble. Post a figure chart on gold and show us this pole, please. Evidence? Anyone who buys gold at its highest peak is going to lose 10 times out of 10. But many of us who bought gold on its way up to its modern price have made a profit that held during the dot.com bust. Gold price is a matter of supply and demand. Currently demand is outstripping supply and price continue to rise. Could demand fall? Sure, but I think it is unlikely in the near future and more gold profits can be made. Asian economies are industrializing at the fastest rate in history and are becoming huge consumers of gold for jewelry, electronics, industry, and investing and will compete with Western economies for the product. Gold production has been relatively flat for over a decade and some feel that "Peak Gold" is near, when known gold deposits will begin to be depleted. There will be peaks and dips, which can be opportunities for the investor, but I think gold will rise steadily in the long run. I don't put all my eggs in one basket but gold is one basket I always keep a few in. I believe in diversification and investments outside of the stock market. I like to have some real estate, agriculture, and commodity investments in the mix. Gold is a commodity that is easier to understand than pork bellies or wheat futures.
As a long term investment gold is piss poor, and should not be included in a portfolio. Long term is the only way I invest. People who hold gold now are largely get rich quick investor's, people who jump in and jump out of different investments, or people who don't understand a rate of return. If you are holding gold as a long term investment you are much better suited to sit your money in an MMA type savings account where you will get roughly the same return and carry no risk.
Nonsense. Gold is a commodity and commodity trading is all about supply and demand and timing. Sometimes you hold for a long time, sometimes you buy, and sometime you sell. I have many long-term investments, but it doesn't stop me from making an obvious buck along the way by buying low and selling high. Well, gold has made me money. If I ever lose money with it, I might start listening to you. Again, I think it is wise to have both long term investments in the stock market and other investments in areas where you have to watch the investment and buy and sell wisely. It's not a risk or a waste of money if you do it carefully and smart. If one can't, then definitely he should put all his money into a money market savings account where it will barely keep pace with inflation.
As an investment gold barely outpaces inflation. Regardless of when red55 made his purchase and the current price gold has an average rate of return of 4%. That means it is not a sound investment compared to the stock market or a 5 year CD for that matter. The argument that money can be made by paying attention is not sound investment strategy. Its a get rich quick scheme. A good growth stock mutual fund is a far supperior investment with a much better wealth building track record.
Just what I see. In 1973, gold was about $100 an ounce, by 78 it was 850, or 8.5 times increase. Inflation was not that high, demand did not go up that much, oil only tripled. When gold moves, and the public gets in, it goes too far too fast. This is usually seen in the aftermath of its fall; it simply can't get up to its old level for a LONG time. Remember the '49ers. They don't call it "gold fever" for nothing. Here's something on the tulip bubble, it was even before your and my time!!! http://en.wikipedia.org/wiki/Tulip_mania I don't know how to post the chart itself (if someone can tell me how in a PM, I'd really appreciate it), but here is a link to a point and figure chart. It just shows price action, no time action. X's go up, O's go down. I see 4 long pole rises on the chart. After a long pole rise, it eventually must correct. If the correction holds above the midpoint of the long pole, that's good. If the correction falls below the midpoint, not so good for the near term. http://stockcharts.com/def/servlet/SC.pnf?c=$GOLD,P&listNum= As far as SupaFan saying gold is not a good long term investment, I don't know. Much has changed in the world since 1972 when the US left the gold standard via the Breton Woods Accord. The US fixed the price at $35 an ounce prior to that, and its only been deregulated 35 years. Having been a regulated commodity for a long time prior to that, I'm not sure what to say. But if the total US debt climbs to 40 or 50 trillion over the next 30 - 40 years, gold may have a better shot at shining for a good while. I got in in 2003 at 380, now at 920 4.5 years later. My calculator says that's 30% a year average for 4.5 years, pretty good. For me, 4 years is at least intermediate term. I would not expect it to return that annually over the next 30 years, but its been a fun ride. I just looked at a nine year chart of the S&P 500, and if you got in an index fund in 1999, you have been in there for 9 years and made exactly zero dollars.
We can talk about the value of the dollar and how it's in the toilet but I find it funny that when they found Saddam in his hole......he didn't have millions in euros, yen, pounds, peso stuffed away. He had dollars. And towel heads around the world with cash stashed away in foreign banks aren't moving euros.........it's dollars.
