Lower Gold Price = Buying Opportunity
Simple Investment Guidelines
From January to May 2006, gold prices rose to over $725; £380; €561 in May 2006, now at $608; £330; €482, and many investors were buying gold on the wave of rising market prices. When gold eased off around May 15th, many potential investors lost interest and stopped buying. A simple concept which we try to communicate to our customers, is to buy when prices are low, often when other investors are not actively buying, and to sell when prices are high, often when the sheep are buying. Thought of in these simple terms, investing is easy. Many other investment advisers have given similar advice in different ways before. Another way of looking at this is "contrary thinking". Look what everybody else is doing, and do the opposite. While this is not going to work 100% of the time, it is worth considering. If you can get in before the pack starts, and get out once they are in full cry, you will probably beat the market. To do this, you will need to put in a small amount of effort, read and research, then make your own decisions.
Bull Market, Bear Market or Correction?
Nobody ever rings a bell to tell you when a bull or bear market has started or is about to start. All investors share the common problem of deciding or trying to guess whether the short, medium, or long term trends is up, down, or sideways. There are, of course, many analysts, pundits, and financial journalists with an opinion. Unfortunately many of these opinions often coincide with the current direction or recent trend of gold, or whichever other commodity or share is being discussed. Also, there are always conflicting opinions. It is actually a good healthy sign when there are differences of opinion, because this is a fundamental and underlying cause of any market. All markets depend on a difference of opinion for their very existence. In any market, if all members were only interested in buying, or all in selling, there would be a very significant price change necessary to change sentiment among sufficient members to allow the price to stabilise at its new level. In fact, armed with this knowledge, the smart investor would be ready to sell whenever everybody else was buying, and conversely ready to buy when others
Wake Up & Buy Gold
Survive & Prosper in the Coming Economic TurmoilA book by Jim Mellon & Al Chalabi We have read this book, and agree with many of the ideas it contains. Many of the events they predict in the book are already happening. One of their strategies to protect your finances is to buy gold coins. They also recommend visiting our website for more information!
Dollar Confidence & US Deficits
One of the central and recurring themes throughout this book is the fact that the USA, the world's biggest economy is running twin deficits, and has been doing so for a number of years. These deficits are the fiscal deficit, i.e. that government spending is being financed by increasing debt rather than through taxation, and the trade deficit whereby the USA is importing far more than the value of its exports. For most countries, these twin deficits, and their size, would have affected exchange rates before now, which would be helping to reduce the imbalance. The main reason why this has not already happened is that the US dollar is still the world's favoured reserve currency. How long this will continue is probably the
big question.
Warning Signs
Since reading "Wake Up", we have noticed almost daily press reports from financial institutions or about financial markets.
In General
Although this page was originally written at the time of a specific brief dip in gold prices, the advice we give is good general advice at all times. It is better to buy when prices are lower than when they are higher. It just seems so obvious, that we don't find ourselves saying it often enough. Warren Buffet, one of the most successful investors of recet times, firmly believes in the priciple of buying when prices are low, often when sentiment is negative or neutral. His approach does require a little patience, something which seems to be missing in large parts of modern society.
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