Pity your father's very dumb friend, who would buy something AFTER is has risen 2300% in 7 years.
Dear hubbubhubbub,
Well, the price of gold has increase over 100% in the last five years, and folks are talking about it continuing to run up, right in this thread. I see a post or two aiming for $750 or $1000 or more per ounce.
Just the sort of stuff folks were saying when gold topped $800 25 years ago.
The decision can only be judged foolish in hindsight, when the market has reversed.
In fact, in 1979 - 1980, the economy was going to hell in a handbasket, inflation really was going wild, the Russians really were on the march, Islamofascism was just really getting settled into state power, oil really was spiking again, we really did have gas lines again, interest rates really were at record highs.
Why shouldn't gold have gone even higher?
Right now, we're seeing a little blip in inflation. It may get worse, it may not. But the economy is humming along with modest unemployment, modest economic growth, modest interest rates, nothing quite like the Cold War threatening us, why should we expect that after a doubling of gold prices in the last five years, they'll continue to soar?
Yet, folks here are telling folks to buy gold!
Myself, I think it's possible that gold could run up a bit more, but I suspect that in five more years, the price of gold will be nearer to $250 than it will be to $1000 per ounce.
If you'd have bought Intel in 1971 at what is now, after all the splits, 2 cents per share, you might have told me that buying Intel in 1995 at what is now, after all the splits, was something like $3 per share, was foolish.
But the stock continued to go up for a number of years, I sold off most of what I originally bought at very large profits (I sold most near the top of the market), and I still have a few shares lying around that are, essentially, "free."
But I bought when all the analysts were saying "sell" and if it had tanked, I'd have looked very foolish indeed.
Only if you have a crystal ball in working order can you forecast whether an investment will make one look like a genius or like a fool at some distant time in the future.
sitetest