Invest in gold or House?

Contrary to the other posts, I would definitely suggest gold.

Why? Because the chances of gold rising in price are significantly higher than the chances of most North American real estate rising in price.

Gold is a hedge against inflation, and many of the true professionals with a good track record are predicting that gold may see $1700 by the end of this year (and by this I do NOT mean most analysts you will see on CNBC etc, who are trying to help themselves, not you).

We are on the cusp of a decent recession, and don't expect it to be solved too quickly. Furthermore, we are in an election year, so to prevent the economy from appearing to collapse before then, the Fed will do everything in their power to keep the stock market buoyant by injecting fake money into the economy (printing money) and to lower interest rates. Both of these, as you will notice if you monitor every time they are done, push the price of gold up.

If you buy gold, best thing is to buy a gold ETF, like iShares Gold (ticker IAU). If you buy futures, however, be very careful, because you can lose a lot of money fast if you don't time it right, even if gold ultimately does go up. ETFs are the safest method. (I would avoid StreetTracks gold, GLD, for reasons that are too detailed to get into right now.)

Many people think the housing market has a long way to fall. Would you want your house to drown in that? Maybe people are wrong about the housing market falling (no person in the world can predict the economy, not even the people who wield massive influence), but think about it---so many people's mortgages are going up for reassessment. A small increase in interest rate will mean millions of foreclosures this year when people can't afford their mortgage payments. This will mean house prices dropping like crazy as people struggle to sell off their homes at fire-sale prices.

Also, if people start losing their jobs, that will also mean people not being able to afford mortgages. The question is---where will the general housing demand come from? Demand will slow.

If you decide to buy a house, my guess is that you are getting a mortgage... that is a large liability right now. If there is a possibility that you will have any difficulty in the future of paying off your mortgage payments for any reason (you lose your job, etc---it's not that unrealistic) you are taking on a huge risk, and could ultimately lose that home... not a good situation.

In addition, houses are not "liquid". If you want to sell your house in a semi-urgent situation, you can't just sell it overnight at anywhere near the price that you paid for it. There will be tons of people trying to sell their houses too, and there may be reduced buyers. Selling a house can take a very very long time. The economy is shifting. Sure, your house price may increase in the VERY long term, but you may have to wait through some tough economic times.

The alternative, owning gold, means that you can sell that gold, if held as ETFs etc, in seconds, and recover your money.

The basic situation is this: you have chosen to look at two very different options---real estate or gold. Real Estate does NOT go up forever. If it does, it can correct in a HUGE way in the meantime (look at the early 80s and the depression, as a reference) and correct very quickly----it may take decades to get back to the same levels. The real estate market has been completely overbought in many parts of the world. It has now started to correct quite seriously.

You have far better chances of gold rising in price than a house rising in price, as a general rule. If you decide you have made a mistake buying gold, you can sell it very quickly on the stock exchange. Even if you bought physical gold, it wouldn't take that long to sell it (if you do buy actual bullion, store it very carefully, and don't tell anyone where you keep it. Split it up and put it in many safety deposit boxes and hidden places, etc)

Here are some sites to look at to start off:

www.kitco.com
www.jsmineset.com
www.321gold.com

It's not easy to get informed, unfortunately, because you have to get past all the mainstream media, which, frankly, is not necessarily working to get you the information which benefits YOU. It's sometimes hard to break free of the idea that you've been misinformed by these outlets for a long time.

And I'll warn you---if you go to the average investment advisor, you're going to get similar contradictory advice. Remember, most investment advisors work for major institutions, and it's the rare occasion that an investment advisor will do something that benefits you, but that doesn't have the best interests of the institution itself at heart. If they advise you in a particular way, it effectively represents how they would advise many people... and very few institutions want you to buy gold right now, because it goes against the grain of the entire system that they are part of.

Read those websites and you'll start to get a slightly better insight into what's really going on.

Good luck.