The Mage Posted December 11, 2009 Share Posted December 11, 2009 Forgive me, but gold is not a good long term investment. Over the long term it matches inflation, meaning it holds it's value. If you really know what your doing, over the short term, you can make money off of wild fluctuations in the market, but this usually falls into what is called speculation, (fancy name for gambling,) and only real experts should truly invest that way. Right now it has entered into bubble range. Although I do see it holding it's value for a while simply because of fears in the economy, and the inevitable inflation that is going to occur as a result of the impossibly massive government debt that has been created over the past 14 months. The game is to buy low, and sell high, and right now it is high. This is the time people are supposed to sell. Unfortunately this is when people buy. It is always a good idea to avoid what everybody else is getting into. On another forum, I won a bet that oil was going to go below $80, made when it was at $140. Before that I was telling people it wasn't the right time to get into Real Estate. Everybody was flipping properties then. Actually Real Estate has become a good investment, because it is no longer a bubble. Okay, here is a good way to think when investing. If you go to the supermarket, and find that apples have jumped to $10 a pound, do you start thinking you suddenly need to buy apples? No, you look at the bananas that are on sale for 15¢ an ounce, or the oranges that are a deal at 50¢ an ounce. Buying any investment at a high price is like buying vending machines at BizOp prices. And there are plenty of people who have made money by going the BizOp route, but would one (experienced) person here suggest they do that? Link to comment Share on other sites More sharing options...
davidsurvz Posted December 12, 2009 Share Posted December 12, 2009 Forgive me, but gold is not a good long term investment. I forgive you! Link to comment Share on other sites More sharing options...
caserri Posted December 12, 2009 Author Share Posted December 12, 2009 I understand the principles of investing (buy while on sale) and I have those bases covered. My interest in physical gold is purely from a survival standpoint. A previous poster hit the nail on the head when they mentioned using it as a vehicle to "buy" yourself into another currency when the dollar crashes. This is why I *would* purchase gold when I can, no matter the cost. When I started this thread, I was basically just busting my own chops for not doing it when it was roughly a quarter of the price it is now. Link to comment Share on other sites More sharing options...
antoniocinisi Posted December 12, 2009 Share Posted December 12, 2009 Forgive me, but gold is not a good long term investment. so had my parents bought me a gold bar when I was born over 3 decades ago it wouldn`t have been a good long term investment?? I could be wrong but you probably are too. I am not a stock broker or big invester either though. Link to comment Share on other sites More sharing options...
The Mage Posted December 13, 2009 Share Posted December 13, 2009 so had my parents bought me a gold bar when I was born over 3 decades ago it wouldn`t have been a good long term investment?? I could be wrong but you probably are too. I am not a stock broker or big invester either though. Did they buy early 79 or late? At the beginning of 1979 gold was at ~$220 an ounce, while at the end of '79 it was at almost $520 an ounce. So if it was bought at the beginning of that year, you quintupled your money. By the end of the year, you did a little better then double it. The S&P 500 started that same year at just under $100, and ended the year at over $107. Now it is at $1106, giving you 10 to 11 times your investment over the same time frame. Also I don't think the S&P 500 number includes dividend reinvestment. Anyway, mid '82 it was around $300, and from then to 2006, it hovered between $300 and $500, not really going anywhere. You are talking about 23 years of flat prices, and then 4-5 years growing. The big problem with gold is that it just sits there. If you buy into a market, you are buying companies that are doing things to make money. Using the vending machine analogy, it is like buying a machine on location making money compared to buying one, placing it in your garage, and hoping it will be worth more someday. I understand the principles of investing (buy while on sale) and I have those bases covered. My interest in physical gold is purely from a survival standpoint. A previous poster hit the nail on the head when they mentioned using it as a vehicle to "buy" yourself into another currency when the dollar crashes. This is why I *would* purchase gold when I can, no matter the cost. When I started this thread, I was basically just busting my own chops for not doing it when it was roughly a quarter of the price it is now. When you buy stocks, you are essentially converting your money into stocks. It is valued in dollars, but really isn't a dollar. It will be affected by any drop in the dollar, pulling it down, but then eventually the inflation would end up pushing it back up. Another option is Real Estate, which will rise due to inflation alone. (Caused by the dropping dollar.) But if you are truly interested in foreign currency, either just buy it, or even better, invest in an international fund. Then you are not only out of American currency, but invested in business that should make some money for you I can see the dollar falling, but nowhere near as fast as gold is going to fall. Link to comment Share on other sites More sharing options...
caserri Posted December 13, 2009 Author Share Posted December 13, 2009 But if you are truly interested in foreign currency, either just buy it, or even better, invest in an international fund. Then you are not only out of American currency, but invested in business that should make some money for you I can see the dollar falling, but nowhere near as fast as gold is going to fall. Mage, I truly respect and agree with you position on stocks. As stated, I have those bases covered. But your suggestion to just buy the foreign currency now, before the dollar tanks would essentially be gambling or speculation as well because I would obviously not know which of today's currencies would be most beneficial, or even in existence, say 20 or 30 years from now. I am not looking for a way to make the money grow, the stock market is for that. I'm looking for a place to maintain my lifestyle in the event of a major financial catastrophe. By major, I'm not talking about the perceived recession we just experienced or even the great depression. If those are the worst things we can experience financially then we have nothing to fear. Also, gold may fall faster than the dollar but eventually the dollar will worth zero and while everyone else is sitting on worthless paper stocks and bank notes, I'll be maintaining my current lifestyle somewhere else. Like I said in my initial sentence of this post, I respect and agree with you. I think we are just looking at this from two different angles. Yours is from an income generating perspective and mine from a survival perspective. Both are valid and serve their purpose. Link to comment Share on other sites More sharing options...
The Mage Posted December 13, 2009 Share Posted December 13, 2009 I was wondering if you meant the complete collapse of the dollar, but I cannot see that happening. To me it sounds like the ads for people selling gold. But if it does collapse, either it is because another currency is has taken over, or a total collapse of the world economy. Which right now if America goes down, it takes the world with it. At that point, don't even believe in gold. Barter will take over as the standard for exchange, and food and water may become most important and valuable items. In the past when people wanted to move money, they would exchange cash for diamonds. Small and easy to transport. And a lot lighter then gold. This is what a lot of people did when escaping Nazi Germany. If another currency is going to replace the dollar, I think we will know what it is way before the dollar collapses. I think it is more likely that a world currency is created, and the dollar is simply absorbed into it similar to what has happened with many currencies and the Euro. Link to comment Share on other sites More sharing options...
caserri Posted December 13, 2009 Author Share Posted December 13, 2009 You may be right. It certainly sounds plausible. Obviously no one knows whats going to happen, (or we'd be rich already) We just have to take the steps that we feel is appropriate to secure our future. In the end, our entire existence is just one big roll of the dice. Link to comment Share on other sites More sharing options...
davidsurvz Posted December 17, 2009 Share Posted December 17, 2009 ANYTHING... you can "buy low" and "sell high" is a good investment. (Especially Gumballs) Link to comment Share on other sites More sharing options...
The Mage Posted December 17, 2009 Share Posted December 17, 2009 Oh yeah. If I could buy gold at $100 an ounce, I would jump on it. Then sell it on the open market immediately. And since you brought up gumballs, 2¢, maybe 3 or 4¢ to purchase, and you sell them for 25¢. That is like buying gold for $96 to $196 an ounce, and selling it for $1,200 an ounce. At current prices you would need gold to go up to $7,500 to match the return on gumballs. I would rather buy gumballs then gold. (Then again, gold doesn't go bad.) Link to comment Share on other sites More sharing options...
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