Gold Breaks $700
Last Friday, gold dropped to $680/ounce before rebounding to $740/ounce. Like every other asset, gold has been hammered this year. However, this may be partially due to a strengthening of the dollar. In terms of other currencies, it’s still close to its all time highs.
I think this is a good time to buy some gold if you don’t already own some. (and if you do, then it’s a good time to add more!). People often ask what’s the best way to invest in gold.
I tell them to buy a little bit of everything. Here’s an excerpt of an email I got recently.
“I believe the gold juniors offer the best value for your paper dollar going forward,” says Ed Bugos of the violently beaten-down junior mining sector. The Canadian Venture Index, the bellwether of juniors, is down a nauseating 70% from its 2007 high.
Ed sent over a lists of what gold bugs should NOT do:
* Don’t be overly short the stock market at this stage of the collapse.
* Don’t slow down your gold buying just because the market is down. Buy a lot of gold - coins and bars. Buy as much as you can before it breaks through $1,000. Then hide it.
* Don’t buy the GLD streetTRACKS, unless you’re just trading.
* Don’t buy gold from your bank.
* Don’t put all your eggs in one basket. Diversify your wealth between tangible assets, like gold, silver and platinum, or even real estate, and continue selectively accumulating bargains in the equity sphere. Diversify geographically.
* Don’t invest more than 20% of your wealth in junior miners. It is not a safe-haven panacea. The rewards are potentially high, but the risks are, too.
* Don’t keep all your wealth in gold, because the government will one day probably come for it.
I own a lot of gold and silver coins and also the Market Vectors Gold Miners ETF (GDX). Check out this link to see my favorite gold coins.
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October 30th, 2008 at 6:02 am
Have you considered purchasing pre-1964 silver coins? I’ve found some reputable dealers on Ebay who sell them, usually in $5 rolls. In my area at least, it’s damn near impossible to go into a coin shop and find any silver or gold at all.
November 19th, 2008 at 10:50 am
I am not sure I agree with you here. Is it ever wise to buy things when they are at their most expensive price? I dont think so. I think this might actually be a good time to be getting into stocks and leave gold alone. When the price drops, you might want to get back into it. That is at least my take on it.