Savvy Investment Options: Making the Leap to Gold
There are many panicked investors out there who have no idea where to safely
stash their money in these troubled times. Expert investors and traders know
several key facts about investing, which I'm going to share with you now.
You may have heard of the Dow Jones breaking its own low points of late,
causing you to wonder what that means to the stock market. First and foremost,
you need to understand that the values you see quoted on a day-to-day basis for
everything but gold are not true values. The reason is, quite simply, because
the value of money often undergoes significant changes every single day. It's
next to impossible for the average investor to keep track of these changes.
To give you an idea of what I'm talking about, let's break down General
Electric's stock over the past decade. In September of 2000, GE stock was
sitting at a record high of $60.75. Last month, it had plunged 79.3% to a low of
But that's not the end of it. The dollar bill has also lost value in the past
eight years, so we have to take that into account as well. Back in the height of
its value, when GE's stock was $60.75, you could have traded in each stock for
about 1/5 of an ounce of gold. Its recent low point of $12.58 per share would
gain you only 1/50 of an ounce of gold, which is a 93% loss in the purchasing
power of GE stock.
All of this means that General Electric is now worth less than 1/12 of the
value it enjoyed at its peak nine years ago.
The one constant over the years is gold. In fact, gold has served as the
benchmark to gauge the value of money for over 5,000 years, and it's not about
the change now.
One thing's for sure: the value of money is on the downhill slide, a trend
that shows no sign of relief in the coming years. To compensate, asset values
will be forced higher. We've seen it happen in Brazil, Argentina, and other
third-world countries that have muddled through currency devaluations. If we
don't change course, we'll find ourselves the first and only first-world country
to meet the same fate.
Investors are also wondering what's going on with gold, and I'm here to tell
you, gold is doing amazingly well. Larry Edelson exclaims that, 'Gold is still
well above its long-term uptrend line, and even above support derived from the
2006 and 2007 highs.'
He believes that gold has not only held up well but that it's on its way up,
and I couldn't agree more.
We could also look at the history of gold to see that gold bull markets tend
to last eleven years or more, which would mean that gold would top out around
2012 or 2012. Which would also mean that long-term gold cycles are still safe
bets for savvy investors.
Many investors are picking up on this, sending the demand for gold soaring in
recent months. As of September 30, 2008, total gold demand was up 18% from
September of the prior year. Investor demand made up the greatest percentage
(56%) of those seeking to purchase gold.
While demand was surging, supply was rapidly decreasing. In fact, the
available gold supply dropped 10% from September of 2007 to September of 2008.
The biggest reason for the decline in supply? Central banks stopped selling
their gold, which is a huge indication that they are becoming increasingly aware
of gold's real value.
Knowledgeable investors and powerful central banks are quickly realizing that
gold's an optimal place to store their capital for long-term safekeeping. If
you're questioning the safety of your money in your current investments, now
would be a great time to make the leap to gold.