Gold Investing
Gold, is it the best investment since Wal-Mart or McDonalds debuted- many years ago, and since made many investors wealthy?
Columbian Gold Figurine-photo by Casver CC
Or is gold, truly fool’s gold, only worthy of a Gold Bug’s time and study?
In this WSJ Blog article, James Altucher, writes about gold’s two century-long lack of investment growth- a miserly 1%-even counting it’s go-go growth the last few years.
What do I say to those who brag about Gold tripling in value over the past 5 years or so. I say,”So what!”
Internet stocks hit the stratosphere in the late 1990′s. Housing was growing 15-25 % in some parts of the country a few short years ago. And my personal favorite- beach property in Florida-where your’s truly has lost a bundle.At their heyday all three seemed to be no-brainer investments.
That is the nature of bubbles. And my personal best barometer, is “When Dr Dean start’s to think about an investment, it is probably at it’s bubble-licious peak!
Internet Stock Bubble
Think about it. When the internet investment bubble was near it’s high, I saw a nurse anesthetist- who didn’t know a P/E ratio from a vial of Narcan-poring over the Wall Street Journal. With her broker holding breathlessly on the other end of the phone, waiting, for her latest pick. She no longer reads the WSJ….
Housing Bubble
Another acquaintance in another part of the country, has had several foreclosures, on his flipping flops in the housing market.
Beach Property Bubble
And finally, there is yours truly, who is still holding beach property, at 25% of its former bargain price,(so I thought!) Just when I thought the market might be turning, BP had to turn loose a couple billion gallons of oil on my beloved Gulf Coast! Saying it’s like throwing gas on the fire (sale) would just be too easy!!!
Calling Market Tops
Years ago, there was a saying on Wall Street-called the Business Week Sign-if an area of investing was featured in Business Week-it was probably at it’s top!
That is just one more sign of the herd mentality. It is emotionally more satisfying to follow others, than to make a decision all our own, based on facts as we can determine them.
So based on the “Dr Dean’s Investing Forecast” I have been more and more tempted to buy gold recently-probably a sure sign it is close to its top-buyer beware…..
Or. is this recognition of my failings, a sign that I am becoming more mature-Nahhhhhh!
What say you, Gold Bug, or Gold Bear? Or do you care??????
Tags: gold investing, investing in gold, is gold a good investment, is gold at its peak
All the “smart money” seems to be PILING into gold. So far they have been right!
But when it crashes-the smart money will have gotten out, and you and I will be left holding the bag…
If I was convinced to buy precious metals-I would for sure dollar cost average, and have a stop in place.
cash gold in for what, a fiat currency that is backed by a government that is 4 trillion in debt running 1.5 trillion deficits? Yea give me that paper backed by a bum over a metal that was 5000 years of history and is coveted by other nations.
Can’t argue with the deficit part. But does that mean gold will follow-the gold market is a world one, not necessarily just the US.
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I’ve been struggling with this for some time. In the end we have to look at the fundamentals and trust our convictions.
I’m with JIm. The value of the dollar is being utterly decimated by our reckless spending. The only thing saving us from hyperinflation right now is the sour economy, which has contributed to slowing the velocity of money to a trickle. Eventually, the economy will turn around, the velocity of money will increase and – like a lit match to a gasoline soaked pyre of worthless paper – the inflationary conflagration will ensue.
My only questions are:
1. Do I keep my gold holdings in gold-based funds/certificates, or do I buy the real thing?
2. When will that inflationary “match” be lit?
My $0.02 (after taxes)
Best,
Len
Len Penzo dot Com
Well, Len, as usual, you know how to make your points! I think we have a couple of years of a slow economy, before inflation shoots us in the foot. I am concerned that gold has lost its inflation connection-as it seems to be more tied (inversely) to the dollar and our economy, rather than inflation these days. I would probably buy gold mining stocks, if I wanted to play the gold thing.
Thanks for your opinions!
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