Your Questions About Invest In Gold Stock

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George asks…

Questions about stock market if it crashes again like N 1929?

Curious to know how the rich stayed rich during the depression. (Did they pull out all their money before the crash?) Was the money worthless back then as I feel it will be this time around (Trillions in debt and inflation is going to kill the dollar).

Also if I invest in GOLD stock how do I collect if the stock market crashes and the second Great Depression hits? Gold would sky rocket but if our money isn’t worth the paper to print it on what good is collecting from gold stocks anyway?

How is Wachovia bank doing these days? Would they survive a collapse like the first depression? What banks will make it through a second depression? I understand Government doesn’t want to tell us this information to keep a panic from starting so I am researching myself.

I would like to use this example to get my point across. Let’s say the year is 1925 to 1927 (Just before the great depression) knowing what we know now what sort of advice would you give the average guy back then if you could travel in time for only 5 minutes and only warn 1 person? For example some people made it through just fine but how? What would you tell others back then to do just before the crash so that they were prepared and didn’t suffer?

I may be wrong but I see doom on the horizon and I would like to prepare myself for the worse case Scenario. You might call me crazy or tell me it will never happen and that is fine but I am curious what someone today should do (Financially ) if we knew the second depression was only months to a year away.

Of course pay off debt, stock up on food, barter etc… Just curious how I should move my money so when the dollar is worth 0 I still have currency to remain wealthy. I know people say to buy Gold and that is fine but that doesn’t stop people from knowing you have it and taking it. Let’s say we are 6 months into a depression and you are known for buying stuff with gold you will become marked as a target.

financi4 answers:

This is not like 1929. There was very little government debt back then. Back then some rirch people indeed did get cleaned out. Some did not. I expect that the same will hold true today. It would have made no difference if one could travel back for 5 minutes to tell one person at the end of 1927. During 1928 and 1929 the stock market made its largest gains. Also back then the average guy did not have a 401k or an IRA account. In fact the average guy was making about $15 a week. The average guy was not actually effected by the crash until the layoffs began. Then the fun began. What makes this one different is the mammoth amount of debt being piled up by everyone. People, governments, companies. You name it they are loaded with debt. This crash began when all of a sudden people realized they could not afford the McMansions they had signed on for thinking that they would be able in a years time to flip them for a tidy profit. They wound up flipping them all right, back to the bank that had no business loaning them the money in the first place.

In the worse case scenario, it appears that gold might be best. The only way out for this government is to devalue the currency. They have absolutely no hope of paying even a very small portion of their debt and they are getting ready to add another trillion in hopes of buying our way out. It will not work.

If you will notice, gold is about the only thing that has not lost 50% of its value. About every thing else has except government bonds. People seem to be buying them thinking that they are safe. Ha ha.

Michael asks…

Could a beginning investor start out at scottrade.com with investing in gold and silver stock – step by step?

financi4 answers:

First of all, awesome decision going with Scottrade. I’m a big an of Scottrade personally. Yes, you can totally start out as a beginning invest buying gold and silver stocks on Scottrade. There are two main options.

The first are exchange traded funds (ETFs). The two most popular have ticker symbols GLD and SLV. These basically track the price of gold and silver. Making your purchase is as simple as funding your account, understanding how much you want to allocate to each, and then setting a buy order to order the number of shares you can afford to purchase (you can either do this online, or by calling/visiting your local Scottrade office). If you have any questions at all, make sure to contact your Scottrade office – that’s what they’re there for.

The second option is buying shares in gold mining companies. This gets a little more difficult analysis-wise because you’re no longer just “buying the metal” but you’re buying a company that mines the metal. You’ll want to read some articles/books (such as The Motley Fool) to understand balance sheets, income statements, and the gold mining business. Once you’ve decided, you can then buy your stocks just like GLD and SLV. I really enjoy the ETFs and gold mining companies, but just advise you to do your research before buying any stock and consider starting with the ETFs because they’re a bit easier for beginners.

William asks…

Is it best to invest in gold ores right now in the stock market?

financi4 answers:

It might be. Most of these gold ores are valued at a lot lower rates than the current gold price. You need to find out what value the company is using. They tend to use a 3 year average, rather than keep changing their valuation with the gold price. I think most companies are using something like $650/oz.
You also need to know who is valueing the ores (is it JORC complient) and whether the resource is inferred,estimated or proven (these each have completely different valuations), what grades the ore is, how costly it is to extract and transport. Whether there is suitable space to process the ore etc.etc.

Daniel asks…

Under which kind of circumstances do gold stocks perform well?

I just started investing in the beginning of the year…I had a few people recommend gold stocks to me. Under which circumstances do gold stocks do well or bad in the stock market? Any of you guys invest in gold/silver? Thanks for your help!

financi4 answers:

I prefer ABX & AU stocks. They are too cheap compare with price of gold. Really cheap stocks. I have been loading up on ABX. It is amazing one. I am expecting 20% – 30% move up until year end, or at most early next year.
Gold will perform well when economy is struggling and when there are a lot of buyers.
Buyers will rush to gold, when central banks flood the market with money.
It may look complicated to understand, but lets take US central bank {FED} actions as example.
FED spend more than $2.66 trillion buying US government bonds in the past two years in order to stimulate the economy, that sent Gold price to all time high to around $1926 earlier this year.
Ever since gold has been falling. Why?? Because that amount of money did little to reduce unemployment PLUS the debt crisis in Europe is affecting the US economy.

So, what i am trying to say, investors will wait for more money from the FED. This is expected to happen late this year, or early half next year.

Paul asks…

How much money and I going to lose in the stock market tomorrow?

I’m heavily invested in gold miner stocks, which should shelter from some of the carnage but tomorrow should be more market wide pain.

With everything the way it is, whats going to happen in the market tomorrow? Particularly what will have so the Primary Metals -> Gold industry?

financi4 answers:

You could short the metals sector with this : http://www.profunds.com/profiles/profile.asp?id=135
and if you are long other stock sectors, there are many other short funds to “hedge” your portofolio.
Http://www.profunds.com/profiles/inverse.asp
http://www.rydexfunds.com/website/fund_info_fset.cfm?home=yes

but with all the instability in the MiddleEast, Iran and North Korea…..gold and most of the metals should gather support

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