Should I buy gold?

I am an American and I'm looking for the best place to put my money. With the United States currently economic situation, should I buy gold? I have never done this before and really don't know where to start. Any suggestions would be greatly appreciated.

I would not be buying Gold.

The weak US Dollar (USD) drive is what has been driving commodity prices higher as many are priced in US Dollars. The lower the USD, the higher the commodity is priced.

As the FED lowers interest rates to help out the home borrower, and bail out the banks, the lower US rates drive commodity prices higher. Lower rates devalue the US Dollar.

Further, speculators are driving prices further.

According to Chase Performance Digest, Gold is one of the worst investments just before non-industrial diamonds.

It has taken 28 years for gold to exceed 1980 prices.

http://goldprice.org/30-year-gold-price-...

Gold is not used by commercial industry except for jewelry. Gold has been "hot" lately as investors flock to gold as a "safe haven" during recessionary times. Investors are just speculating on this commodity.

Long term, better bet.

S&P 500 Index.

The US Dollar has been beaten so much I am actually becoming a little more Bullish on the USD. if the USD goes up in value (and eventually will again), this will drive gold and other commodity prices lower.

If you think that you have to own gold, then I would look at the US Gold Index: "GLD."

In contract to economics classes, I have found that economists are good with theories, but the professional traders have a much better understanding on how the financial markets really work. I took some 6 econ classes in college. None made me a dime. I was self-taught to trade (see my bio for more), and have done much better paying attention to traders than the economists.

BTW: My take on investing right now for 10-15 years growth

1 - Forclosed, short sale, distressed real estate
2 - S&P 500 Index in a Roth IRA.

You're months and months too late.

If you buy gold now, it'll be like buying a lot of tech stocks in January 2000.

Stocks are currently a better bet than gold, particularly blue-chips with a lot of international exposure.

The time to buy gold was 2-3 years ago. The big gains have been made.

While there might be some more upside, you do not want to be caught holding it at the top like the people who did that in the early 80's.

It depends who you are and how old you are. If you are in your teens to twenties, I would recommend 100% stocks because you;ll most likely have time to rideo ut the market. The older you get the more safety investments you should have. E.G. When you're 30, you should have maybe 80% stocks 20% bonds.

This is how I would be investing my money in this order.

1 - High Interest Debt
2- Stocks and Mutual funds
3- Gold
4-Real estate
5-corporate / government bonds (low risk low return)
6- saving account (this won't increase your capital. the money you save that you could have bought a $30000 mustang with with will still be the the same amount of money you will buy a ford mustang in 10 years. (inflation)
7- any lame ideas your buddies have (this wont make you money most of the time)

*** Gold and bonds are really great when the economy goes bad. Because interest rates go down on bonds making your bond look better and people rush to buy safety gold when the economy is bad. Also, when the economy gets bad, people usually sell stocks, making it cheap. When the economy gets better, people usually buy stocks again. At this time, it will be to late for they have bought stocks when it was highly priced. History tells us that in the long run though 10+ years, the rate of return of a diversifed stock portfolio is 10-12%. That means 3 bad years. 4 Really good years (40-70% rate of return) and 3 okay years (2-15%). If you want to know more, contact me.

I would like to also add that Gold is NOT a capital growth investment. Gold is an investment for "insurance and emergencies". In the middle ages, what could a golden coin buy you? A really nice suit. In our current times, what can a golden coin buy you? A really nice suit. When all else goes bad, gold will stll rise with inflation. When all goes bad, gold prices will drive UP UP UP. If you want capital growth, stick with stocks.

For stocks, invest in at least 5 sectors of the economy with at least 20% of your investments in International markets. Also mix up your investments with big and small companies. For example, if you buy stocks in Ford, don't buy stocks in tires because when the market for automobiles go bad, chances are, tires will be a bad market too. If you diversify your investments, even if one market goes bad chances of having your entire portfolio down will be lowered. And don't forget, expect to lose money for 3 out of 10 years, gain big money for 4 years, and gain average money in 3 years out of 10 years.

And remember, there is always a bull market( a sector thats gaining money in stocks) even when the market is bad. You just have to do your research. Understand the economy.
Interesting fact, the world has only enough gold to fill a tennis court stacked together and up 100 feet. Thats why it cost so much.

There are 2 things to look for in investing:

Capital Presevation and Capital Growth.
Gold is great for capital preservation for prices of gold will always rise with inflation. Useful if you're a satisfied retired millionaire that just wants to keep the money stable.

Stocks are great for Capital Growth. Higher risk but also way way way higher return.

With this said, investing in stocks is not for everybody. If you do not have time to do research, you'll probably lose money. Get a professional to help you, or buy a mutual fund. When you get a professional, don't look at his/her performance the entire market was doing good. Look at his/her performance when the market was doing bad. Ask him/her of their performance in 2001-2002.

When you choose a mutual fund, the fund's performance is based on the captain of the mutual fund. Again, look at this person's performance in the down times. When the captain leaves the fund, its also time to sell the fund.

Only if you can get out of it what you put into it.

At this point it has high value, but very expensive. Stay away from the dollar however, you can

gold , silver , and copper

Enter Your Message or Comment

User Name:
User Email:
Post a comment:

Archive: Forum -Forum -Finance - Links - 1 - 2 - RSS - All RSS Feeds
The Causes and the Results. 0.034
Copyright (c) 2011 Financial Crisis Friday, February 10, 2012 - Terms of use - Privacy Policy