Is Gold Really A Sure Thing?

Not too long ago while the Real Estate bubble was still being inflated I remember reading a great line in an internet article that I will never forget. The article stated, " "when your 18 year old dental assistant leans over your chair and tells you it's time to buy Real Estate maybe the bubble is about to burst". Not that I have anything against dental assistants but I think you get the idea. When everyone else seems to be doing it, it is usually too late to get in and make a profit. I think we may be on the verge of another "sure thing" and I don't want it to catch you off guard.

Today everyone seems to be talking about Gold and what a sure thing it is. But is Gold a sure thing? Is it possible to buy gold and still lose your shirt? Is it too late to buy Gold? Let's take a look at some of the facts...

Gold is a Speculation not an Investment. Gold is not like stocks and bonds as it pays no interest, it pays no dividends, it has no earnings or income. The price of gold goes up because people are buying more gold, and people are buying more gold because the price of gold is going up. That is called speculation and Mark Twain once said, " There are two times when a man should not speculate; when he can't afford it, and when he can!"

You can lose money in Gold. All you have to do is look back to 1980 when gold spiked from about $560 per once to $850 over 3 short weeks but by the end of the year it was back below $600.00. The price of gold did not go past $850 again until two years ago. If you had bought gold in 1980 at $850 you would have had to wait until two years ago just to get your money back. That's the same as taking about a 30% loss and having to wait 28 years just to break even.

Might buying gold still be a good idea in our current economy? Perhaps. Could gold continue to sore through the roof and hit $2,500 per ounce or more? I guess, but before you buy remember what your dental assistant said about Real Estate.

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