All About Investing in Gold walks you through the often overlooked intricacies of investing in gold with a clarity and coherence you won’t find in other books. Using real-world examples and simple, jargon-free language, All About Investing in Gold illustrates how gold investing works, why gold deserves a spot in your portfolio, and how to avoid the costly pitfalls many investors fall into when buying gold.
Gold trading and investing has become much easier and cheaper, and that is good news for long-term investors and short-term traders who are looking for more opportunities and diversification. It has been the best performing major asset class over the last five years, returning more than 200 percent on an unleveraged basis, and that trend seems likely to continue for the next five years. Gold traders have unprecedented access to investment products that are both cheap and efficient. It is now possible to invest in gold bullion for fees as low as 0.25 percent per year. Many of these products are new innovations; that is not a bad thing, but it does require caution and education before one makes an investment.
The introduction and growing popularity of gold exchange-traded funds (ETFs), fractional gold futures contracts, and legitimate bullion storage services are quickly displacing the outrageously expensive and unstable products that traditionally dominated the gold market. Demand for gold as an investment is growing within markets as diverse as the United States, where investors are seeking protection from financial market disruptions, and China, where gold investors are buying record amounts as a way to hedge against out-of-control inflation. Chinese investors demanded 45.1 tonnes (metric tons) of gold in the third quarter of 2010, a new quarterly record. Chinese buying accounted for 16 percent of total global demand for gold in that quarter.
We can only imagine what will happen when the world’s biggest saver decides to really get serious about gold investing.
During the five-year period 2005–2010 large-cap stocks returned less than 5 percent, riskier small-cap stocks returned less than 25 percent, and even the surprising bull market for Treasury bond funds provided only 10 percent for investors with nearly perfect timing. Don’t misunderstand those numbers: They are not annual returns. These are total returns for all five years combined. As an investor, you are probably well aware of the poor performance of many assets over the last 5, 10, or even 15 years and agree that something has gone very wrong with the traditional investment choices. Smart traders are making a decision to use gold as a way to limit account volatility and improve performance.
Stock investors have been hurt by volatile markets. The Standard & Poor’s 500 (S&P 500) closed 2010 with a net loss of 10 percent for the decade, whereas over the same period gold was up more than 400 percent. If you have been investing exclusively in stocks, we have a lot to show you about adding gold to your portfolio and how it can be done without adding any complexity or disrupting your brokerage account. You still need to be careful not to become a return chaser in the rush to profits in the gold market. We will show you how to balance your new gold holdings to provide the maximum benefits without taking on too much risk.
We think the fundamentals in the market are pointing to a long-term and substantial increase in the price of gold. In this book we will present the reasons for our bullish bias and specific actions we recommend for taking advantage of gold as an investment. However, we are also realists and know that the market is full of fat tail risks that are impossible to predict and can shift market fundamentals without warning. Gold investors should be prepared for changes, and we will show you how to profit even if prices do not rise as expected. “Markets can remain irrational a lot longer than you and I can remain solvent,” wrote the economist John Maynard Keynes, and we agree with that sentiment. There is no reason to feel trapped in old or erroneous analysis when you can be making money instead.
- Gold Market Background
- The Major Players
- The Fundamentals of the Gold Market
- The Bad and the Worst Gold Products
- The Good Gold Products
- Technical Analysis
- Long-Term Investing
- Active Trading Strategies
- Gold’s Sister Market: Silver
All About Investing in Gold: The Easy Way to Get Started By John Jagerson, S. Wade Hansen pdf