Quote:
Originally Posted by D
I disagree.
You're not going to make much at all by investing in gold, but that's not why you invest in gold.
Anyone serious about hedging their investments would always have at least a small portion of their wealth invested in gold. You don't put money in gold to make money - you put money in gold to keep it.
Not that I have a Berkeley degree or anything (yet), but this is what I've heard wealthy investors say time and time again when I've had the opportunity and opted to listen.
But then... I'm not an invester, myself, with millions to toss into the market (again... yet), so what the hell do I know?  |
Investors buy gold because it is inversely correlated to stocks (like bonds). When stocks go down, investors move into gold and bonds as their prices go up. However gold and other commodities have cyclical prices without an upward bias. Simply put the purpose of investing is to grow your principal investment. Even if it means growing it in pace with inflation (maintaining your buying power), you still need a positive return. If you happened to be unlucky with your timing and you bought in 1980 at $750 you would have had to hold until now to make profit or sell at a loss in between.