5/10/2013 1:35:03 PM | Pablo Paciello, bulliondeals.co.nz
Article from: http://www.stockhouse.com/columnists/2013/may/10/gold-investing-for-the-long-haul.aspx#PFYWJBIXo2S2vY4t.99
It appears that most of the world's gold mines have been discovered
Now is the right time to invest! Many people looking to start investing make the mistake of trying to wait until prices drop to a certain point before buying. While this method can sometimes pay off, often investors simply lose out as markets rise. Time and time again, markets have proven that good investments tend to rise over time. Bad investments, obviously, lose value but if you are considering a certain investment, chances are you already believe it's a good bet.
Generally speaking, it's better to be in than out. Of course, this is a rule of thumb and there may be times when it's better to wait it out and see how markets react to certain news or developments. Still, you shouldn't hesitate when you think stock, precious metal, or another asset is a good investment. Many people make the mistake of waiting for gold or stock prices to drop by a few dollars, only to wallow in regret as prices rise. Instead of living with regret, you should invest confidently!
Further, it's usually best to invest with a long term view. For most investors it is easier to make money by holding onto an asset, such as silver, for a long time and watching as its value slowly appreciates. Many big name investors, such as Warren Buffet, invest in assets they intend to hold onto for years to come. If this is the case, a few dollars difference in the purchasing price point will have little impact.
Unless you see a great opportunity to invest in something that might generate short-term profits, your best bet is to invest in something that you believe will gradually increase in value over time. The problem with investments made based on short-term gains is that the risks are much higher. Even professional investors regularly get burned on high-risk short-term investments, so if you are simply trying to oversee your retirement account or personal wealth, high-risk short-term investments simply don't make sense.
Instead, you should ask yourself which commodities, stocks, and other assets will be more valuable in 10 years. Let's examine gold as an example. So far, it appears that most of the world's gold mines have been discovered and many of them have already been fully exploited. While certainly there will be discoveries in the future, there is little chance that these discoveries will be flooding global markets with cheap gold. In a sense, we could say that the supply of gold is limited and is now becoming fully tapped.
Markets are determined by supply and demand, and so far we have good reason to believe that future supplies of gold will be limited. Now what about demand? Determining demand is never an easy thing to accomplish, however, we do know that the world's population is growing in size and wealth. As the world's population increases in size there will simply be more people to buy gold. And as the world's population increases in wealth there will be more people who actually have the money to purchase gold. This should lead to an increased demand for the precious metal.
At least based on this brief analysis, gold would appear to be a good long-term investment. Of course, that doesn't mean you should rush out and purchase gold right away. Many analysts had been arguing that gold prices were inflated and in April of 2013 they were proven right. Gold prices slid from just under $1,900NZD per troy ounce to under $1,600NZD. In this case, the short-term analysis suggests that gold had formed a bit of a bubble, though in the long run demand for gold should continue to rise and gradually push its prices upwards. In fact, if the gold bubble has completely deflated, now might be the best time to invest.
Choosing when to invest is always an important decision and one that should not be made lightly. If you are waiting for prices to drop on investments that you believe will demonstrate long term growth, you should seriously consider investing sooner rather than later. Don't let the world and rising markets pass you by all because you hope to pick up an ounce of gold or silver for $20 cheaper! Most likely, you'll simply be left in the dust as other investors reap the profits of rising markets.
ABOUT THE AUTHOR
Pablo Paciello, bulliondeals.co.nz
Bullion Deals was established in New Zealand with the purpose of providing a superior bullion buying experience and offering the best deals in the country. Bullion Deals stocks a range of Gold and Silver bars, coins and bullion products. Visit www.bulliondeals.co.nz to find out more and to check out their range of products.
Pablo Paciello, bulliondeals.co.nz
Article from: http://www.stockhouse.com/columnists/2013/may/10/gold-investing-for-the-long-haul.aspx#PFYWJBIXo2S2vY4t.99
