All That Glitters Is Actually Gold

The Beginning of 2012 the markets witnessed a bullish period with most asset classes  reporting strong gains fuelled by an economic recovery compared to 2010. However the past six months have brought in volatility, resulting in the economic slowdown.

 

Gladly the central banks are now prepared to tackle any cascading effects. Likewise it will be prudent for world’s global investors to make gold as an insurance policy, since we are still bleak about what is going to happen in 5 to 10 years’ time.

 

Apart from Equity and Bonds, hedge funds, commodities etc. Real-estate and Gold have outer performed most traditional assets consistently since two years’ time. To reduce an overall investment risk spreading funds across different assets could prove to be a winner.

 

Billionaire investor, Druckenmiller has reportedly placed $324 million of his own money on Gold ETF at a time when precious metals have probably bottomed out. He intends to call it a long term goal and seems content on his massive bet. With this move it could further be advised to investors to move where the smart money is.

 

Gold feeds on inflation in addition to how far the central banks may cut interest rates in the negative territory and right now it does seem to be on a diet. Although experts have indicated that prices starting from $1205 an ounce could rise a touch from here. In this very month it has seemingly fluctuated from this point hence could be seen as a sound investment.

 

According to a study by Ernst and Young 3 out of 5 people will run out of money in retirement. The Global Debt reckoning is accounted to be about $200 Trillion, excluding unfunded liabilities.

 

While inflation seems to be rising from the dead, it does not seem to be paid back soon and inflating is the only solution. USA is no longer the sole contributor of the problem with $18 Trillion of debt. More debt will result in more currency in circulation leading to currency devaluation squashing the paper money value & higher Gold & Silver prices. Delving at the past could be termed as history repeating itself like in the 2008 financial crises, which actually had taken its toll from the end of 2007 but did not result in significant rising prices of gold until 2009. In a quick span of three years it had shot up to a 160% peak price [$1900].

 

According to the historic cycle, on every 38 years in average paper money devalues itself and Gold takes monumental charge. This cycle dates back to when USA was not ‘ the USA’; the current US dollar has been around for 44 years, so if this trend is repeated then all paper money will be devalued and could prove to be really huge!

 

The purchasing power of your current wealth could attain its urgent goal by protecting and expanding your current wealth by not risking all what you have for a potential return.

 

PERCEPTION ON GOLD INVESTMENTS

Making money with gold has to be risky or has to be a traditional retirement plan? There are three criteria’s that make an investment risky according to the worlds most advanced investment traders.

1. The actual idea is unproven.

2. It’s totally untested.

3. It’s unrealistic

 

REALISM QUESTIONS TO ASK ONESELF

1. A lot of time they are unproven and have occurred for a limited period of time in the market-never seen a Forex system planning huge returns lasting for a year.

 

2. A lot of products quote 30% investment banking- How do you measure realism when aiming to make a 100% return in a month and then lose 11-12-13% every single month after that.

 

3. Look at the people who are currently wealthy like the biggest investor in the world -Warren Buffer and Donald Trump. Always watch out for the greed that is overtaking us. It is what is going to tell you that a certain method is going to work fantastically well and our natural radars naturally get pacified with it. Generally this happens when there is good salesman in front of you who is directing the benefits of Return on investment.

 

SOLUTION PERTAINING TO YOUR MIND SET.

Keeping in mind this mental check list you will approach differently. Only then your greed will no longer be able to take control when one is to sell an investment plan that is just not right.

1. Proven

2. Tested

3. Realistic for the funds that are going to come in handy for your legacy.

 

SO HOW MUCH SHOULD ONE INVEST TO SEE A RETURN.

In the financial world we live in, people making a money investment of a minimum of 10% increase per year growth on saved money could be referred to as standing still and safe on their purchasing power.

 

It is highly important to test out any investment at first, so an investment of 20% of your capital could be used to test out and when you are happy you could go for the next 20%, reiterating this plan until you are confidently stepping in to your investment with comfort would be a wise move. This method will bring in your psychology and your experience to be grown in together for best results. With bricks, bars and coins you could start off with an investment of $50-100$ or go higher to about $300, 000 for some great returns.

 

As long you are not investing in a locked in hedge fund you can liquidate it anytime.

However never make an investment with a capital you shall need within the next five years and bare in mind that is an investment and not a business. After all, Investments should be made to be happy and not to impress. The desire for Gold is the most deeply rooted instinct of human race, so focus on Gold.

 

About Mariem Seddiqi

Mariem Seddiqui is an Architect, Investor and a storytelling Traveller. Her other interests include exploring trends on Internet Marketing and interviewing successful entrepreneurs from a variety of industries.

 

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