For the sake of accuracy, we should begin with a much-needed correction as we consider what it means to start trading gold.
Technically, one does not “invest” in gold or any of the other commodities.
When you invest, you are purchasing stock in a company in order to participate in the capital gains of that stock’s value and to Schmuckankauf Berlin participate in its profitability by receiving dividends.
Because gold and the other commodities do not produce revenue, profits, or dividends, you are “speculating,” not investing, when you purchase them.
So, what does it mean to speculate on gold?
Assuming that you’re not a manufacturer who needs gold for your production process, it’s fair to also assume that it means you want to protect the value of your wealth.
First, understand that an ounce of gold is merely an ounce of gold.
Gold doesn’t change in value. Its price fluctuations, either up or down, are indications of the changing value of your dollars.
Consider this. In January, 2009, it took only 900 of your dollars to buy one ounce of gold. At this writing, it takes almost 1,600 of your dollars to buy the same ounce of gold.
Gold has not gone up in value.
Gold’s price has gone up because the value of your dollar has gone down.
Second, understand that anything you own that is over and above your “cost-of-living,” is part of your wealth.
Some have great wealth.
Some have very little wealth.
All of us have some wealth.
When you trade some of your dollars for gold, you will be protecting what wealth you have from the dollar’s declining purchasing power.
Third, understand that there are risks.
If you look at a 10-year chart of gold prices, you will see that the charted price line rises dramatically from less than $300 per ounce early in 2002, to over $1,900 per ounce in the fall of 2011.
Notice that it is a jagged line. Gold’s price fluctuates!
The timing of your gold purchases should be coordinated with the times that gold “dips” in price and there is a “pull-back.”
To “buy low and sell high” is still a valid concept!
There are periods of “consolidation” that typically come after sharp advances in price.
That is the time to buy.
Think of gold’s price as climbing a staircase. It takes a few steps up, followed by a step or two back down. The overall progress may be upward, but keep in mind that there are pull-backs.
As long as the government continues to over-spend and pay its debts by printing more dollars, there will be a continuing devaluation of the dollar and a continuing rise in the price of gold.
The successful gold speculator pays attention to the news and reads the conclusions of the economic analysts who write about our economy.
Through such observation, you can draw reasonable conclusions about our government’s debts and the probable direction of the price of gold.
You cannot eliminate all risks, but you can minimize your risks by gathering information.
Trading your dollars for gold can be done in several ways.
You can purchase coins and bars or you can purchase stock in the gold mining companies. There are also many Exchange Traded Schmuckankauf Berlin Funds (ETFs) that hold gold bullion and/or gold mining stocks.
If you believe that the dollar will continue to decline, it’s time to start shopping!
