Posted on 12/12/2009 11:45:13 AM PST by blam
Sell Your Gold Only IF You Want To Lose Money!
Commodities / Gold & Silver 2009
Dec 12, 2009 - 12:14 PM
By: Sean_Brodrick
Something about gold just makes people irrational. The latest meme making the rounds in the mainstream media is that gold is a bad investment over the longer term.
A couple of radio hosts asked me about it, and even Bloomberg ran a story on this earlier this week, saying that gold can’t beat the returns on a checking account over the last 30 years.
The rest of the story was about while hedge fund managers are buying gold, it’s a poor investment for regular folks.
There’s so much wrong wrapped around the one nugget of truth in the Bloomberg story that it’s hard to know where to begin. But I’ll try.
And before I do, let me just say that if you really think gold is a poor investment, go sell your gold, please. I want gold to get cheaper. Why? Because my subscribers are waiting to BUY gold again, and we’d love to buy your gold on the cheap. Despite the recent correction — a normal and necessary part of any bull market — the long-term trend in gold is way, way up.
Now, as for the canard that gold is a bad investment, let’s see …
[snip]
(Excerpt) Read more at marketoracle.co.uk ...
All one has to do is note the growing amount of commercials on TV from companies that want to BUY GOLD. And they are giving CHRISTMAS BONUSES.
Commodities / Gold & Silver 2009
Dec 12, 2009 - 11:24 AM
By: Submissions
Commodities are still a great place to invest, while some currencies also offer value and investors should stay away from US stocks and bonds, Jim Rogers, chairman of Jim Rogers Holding, told CNBC Thursday.
Rogers has long been bullish on commodities, especially since central banks started to print money to combat the financial crisis.
He is holding gold right now and despite the recent spike in the metal's price, said he things the market is not experiencing a bubble.
"I wouldn't think of selling," Rogers said. "If gold goes to $1,000 (per ounce) – or pick a number – I hope that I'm smart enough to buy more."
With central banks now buying gold and many people worried about paper money, gold will be a great investment over the next decade and relatively few people are invested in it, he said.
At a speech in Prague Rogers surveyed about 300 people, including big money managers, and 76 percent had never owned gold, he said.
“...gold can’t beat the returns on a checking account over the last 30 years.”
In the REAL world, one invests as one earns. And investing at typical gold prices each year over the last 30 years generates a return that far exceeds checkbook interest.
If you invested an equal dollar amount each year at year-end closing prices, starting in 1980, you’d own gold at an average cost of about $4000 per ounce. The same is true if you started in 1990 or 2000. (If you stated in 1970, your average cost would be $222 per ounce.)
Consider this:
big money is moving into T bills
T bills have a 0% return
why move your money into a 0% yield situation, why not just leave it in the bank?
the only answer is... you don’t trust the banks.
and if the big guys don’t trust the banks... neither should I. and for a little guy, I’ll stay with gold
There are many more companies advertising to sell you gold rather than buy it.
When some expert tells me that gold “could go to $2000+ an ounce and now is the time to buy” I just have to wonder their financial expertise? Why the hell are they wanting to sell it now when they could sit on it and enjoy the $2000+ price. Commercials are very expensive.
I think the companies buying gold jewelery are making their profits more from the diamonds and emeralds left in grandma’s old rings than in the scrap gold itself. Just my opinion.
I assume you mean $400 over the 30-year period. So you have made about 3 times your investment.
But if you had bought conservative utility and oil stocks, and reinvested the dividends, you would have made at least 10 times your money. The power of dividend compounding and increases is amazing. I have several oil stocks that I bought in the early 90s, that are pay 15% on my original investment, and they are worth five or six times what I paid.
.......why move your money into a 0% yield situation,....
With inflation, the yield is negative
I purchased heavily in 2004. The 401k drop of last year was hedged by my purchase. Gold is a device that keeps track of markets, nothing more.
Free advice is worth every penny you pay for it!!!
A lot of old jewelery is worth MUCH more than the value of the metal and gems in it.
THAT’S why they are buying it so aggressively.
So does this mean I need to hold on to a gold ring for a while? I was thinking about selling it just for some extra Christmas money. It’s an old engagement ring that the emerald fell out of years ago, and was lost.
Does it have sentimental value?
The dividends add up pretty quick. Makes me hang onto dogs like KFT and JNJ. TCLP has been a very nice stock. Now if I would have held onto my FCX earlier this year. Oh well.
I can't afford gold anyway. And besides, it seems to me the time to buy gold is the opposite of right now. Next time we have a booming economy and a roaring stock market, I'll know to buy some gold, and wait 20 or so years for the next crisis to sell.
True. Which makes it even worse
they would rather lose money than trust the bank and pull some interest
just how bad are the banks
Oops. Yes, average around $400 per ounce.
Why the hell are they wanting to sell it now when they could sit on it and enjoy the $2000+ price.
There’s a lot less god in rings than you would think. A couple hundred dollars if you’re lucky. Maybe less than $100.
“GOLD,” not “god” (sorry boss).
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