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Question: I was thinking about starting to invest a little. I have never done it before. I am 20 yrs old and have some extra money I would like to put away. I want to start small. $500-1000 for now. Maybe in the coming months invest more. I have heard that gold is one of the smartest investments right now. I was thinking about buying some 1/10th ounce gold eagle coins. They run like $122 each. I was thinking about buying several of these just to get my feet wet. I know I wont become a millionaire or anything like that. That is not what I am trying to accomplish. I’m just trying to maximize some funds that would otherwise just be sitting in a savings account. Any advice is greatly appreciated.
Answer: You are very very smart. You you are even choosing the right product. Now Im going to elaborate on why this is a good idea.
First off you need to understand that gold is not an investment. Gold is and acts more like an insurance policy. You are insuring that something in your portfolio can never go to $0.00. All paper assets have the ability to go to $0.00. This is what you are insuring against. Te only other asset to not go to zero is real estate. But real estate is illiquid. It takes too much time to sell real estate and in a credit contraction like today this is the case. Because of the debt time bomb you better own gold. I have been selling my stocks and buying gold and silver but I understand exactly what is happening and know this market isnt comming back for many many years to come, if ever. There we be no jobless recovery. Who is going to buy all these paper assets in the market that are all in default. And with what job. We have exported every job that we can and we cannot survive not building, not producing and not manufacturing and only consuming. No.. Im buying all the gold an silver I possibly can and not allowing the Madoffs to steal my wealth. I know the gold will always be worth something. I had stocks down 95% and was taxed on undistrubted capitol gains that the Pin Stripped Bandits stole from the shareholdrs. When that happened I dumped all my stocks. Every one of them. The best way to own gold is to buy and take physical delivery of the gold itself. Silver is also in the gold realm as well, so when talking about gold, silver is included.
It is always a good idea to own some gold and silver at all price levels. To truly understand gold and silver, and why you should own it you have to understand the economy and get the movie of life on the largest screen possible.
Gold is money and a store of value. It is the “Currency of last resort” as Greenspan has stated many times through the years. Gold doesnt pay interest, dividends, doesnt restate earnings, has no lawyers, accountants, CEOs or CFOs lying to you on television. Gold doesnt ask for bailouts, doesnt go BK and cannot cook its books. Gold cant be debased or printed at the will of a company or governmetnt and holds its purchasing power.
Gold sits there as a store of value, is labor intensive, and a one ounce coin will not split into a bunch of half ounce coins at the direction of the pin stripped bandits on Wall Street. Also Gold is the ONLY asset class in the last ten years to increase in value and retain every dollar of its purchasing power.
The NASDAQ is up 1700% since it was created in 1971. Gold has outperformed all assets since we went off the gold standard in 1971. Gold would be even with the NASDAQ if it fell to $630 an ounce. Gold would be even with the DOW and the S&P 500 if it were to fall to $420 an ounce.
Gold has outperformed ALL asset classes since we went off the gold standard. No exceptions. However silver since 1928 silver has outperformed them all.
Investing in gold and silver for the short term is gambling. Dont do it. Putting cash into gold and silver for long term savings is the only way to go. History has shown that to be the best way to perserve wealth for 6000 years.
Some people say that gold is in a bubble. This isnt true. If it were then everyone would be owning it. There are very few people who own gold and silver. When looking at gold you must think of it as a currency, just like the Canadian dollar or the Euro. Begin pricing any and all goods and services in gold. If you are able to buy substantually more of your food, energy, transportation costs, taxes etc with the same amout of gold then you can today or historically then tht would be a sign that gold is in a bubble. Dont listen to those that tell you gold is too expensive. It isnt.
Again you are VERY smart for doing what you are planning.