If i buy gold what will happend?

Question

Everbody keep telling me to buy gold and then sell it on the stock market what will happend?

Answer 1

I agree with eaglesonaperch and united9198 doesn't know what he's talking about. In 1980, when gold reached $850/oz. the stock market was going now where.

They key is to know when to move in and out of asset classes. A true pro doesn't get married to an asset class. Those that always advocate stocks aren't pro's. They think they are, but really haven't got much of a clue as to what's going on.

I'll give you an example, let's say you invest in candy bars, and the market is hot for candy bars. It would be wise to invest in candy bars because that's where the money is flowing. But, if people are getting health conscious and are starting to eat more fruit and fruit is going up in price and candy bars are falling, wouldn't the wise thing to do be to move your money out of candy bars into fruit?

Well the same thing applies to asset classes. Are stocks right now make the kind of returns that you want? If not, what asset classes are?

You see, most people haven't the first clue on how money and investing works. During the bull run up of 1982-2000, people thought that they were guru's because they were making money left and right. Well, any moron can make money during a raging bull market because during a raging bull, the majority of stocks will rise (get caught in the updraft) regardless of how good or bad they are. Remember that during the bull market, companies that had no sales, or were losing money - their stock kept going up and up? Now is that logical?

Ask all these people that thought they were gurus during the past bull market how well they're doing now. I bet you, they're losing money.

The markets are forward looking, and gold is a barometer of misery. If gold prices are rising, that's because gold is telegraphing that something not so good is coming up on the horizon. Gold is a store of value, during inflationary times, gold with maintain it's purchasing power. For example, in 1940, 1 oz. of gold was worth $33.85, while the median home price in the US at that time was $30,600. You'd need 30,600 dollars to purchase that house, or 904 oz. of gold to purchase that same house. Now fast forward 60 years. The median home price was $119,600 in the US. You'd need 119,600 dollars to purchase that house, but gold was trading at about $250 an ounce, or you'd need 479 ounces of gold to buy that house. While you need more dollars to purchase that home now, you need less gold to purchase that house.

Answer this, do you see inflation rising? Do you see things getting bad geopolitically? If you do, gold rises on these types of occurances and stocks decline.

Another thing, if someone tells you that stocks will pick up again, ask them how long they've been investing in stocks. If the answer they give you is sometime after 1982, they have a very one-sided view of the markets. For example, if someone tells you 10 years, that means they started investing in stocks in 1996. Well the bull market started in 1982. They haven't the first clue how to trade a bear market or how a bear market even works. Talk to people who have traded since the 1970's, or even better, since the early 60's. They've been through bull and bear cycles, they have a better insight into what to expect.

United9198 has probably only traded for the past few years, and like I said, in the Late 70's thru 1980, stocks were floundering and gold shot up to $850/oz. Gold just came out of a 20 year secular bear market and market cycles last for years, generally 15+ years. We are only beginning to see the bull in gold and based on inflation-adjusted dollars, gold could (and I believe it will) reach $2000 - $2500/oz. before it tops out.

Just remember, do not get married to an asset class. Pro's don't get married to anything, they go where the money is made. Only an amateur get's locked in and won't look elsewhere if the tide turns.

Answer 2

It is very simple. If you buy gold, you will get screwed. Despite what you are hearing, gold is not a good investment right now. gold has gone up tremendously as of late and is now at a very high level. The chances of it going higher are pretty slim. Stick your money in a CD. With short term rates over 5%, you will do better than gold.

Answer 3

Be patient and you'll get better prices in the fall...Looks like a mass liquidation in EVERYTHING is about to occur worldwide-including Gold . I Think you can buy gold for around $485 support one last time and then it goes to $2000 per ounce in less than 2 years from now.

Answer 4

you will have money if u wanna invest in gold the they would go higher in prce if u rob a bank u should but the money in chunks of gold cuz it couldnt be traced back to u evn though that has nothing to do with ur q.

Answer 5

Gold is good in hard times or inflationary times, because it is always accepted and gains value in inflation. In stable or deflationary times, not so good.
A hedge against inflation or disaster.

Answer 6

you own gold