Your Questions About Is It Smart To Invest In Gold

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James asks…

Are puts a better bet than gold if the market declines?

I got burned in the last six weeks — lost a sum I can’t afford to lose. The saddening and maddening part is that my strategic vision for the economy was 100% correct. I just mis-executed on that vision.

Six weeks ago I figured out that the recession was going to turn into a depression, and get deeper and last a long time, and pull down the whole economy and the stock market. I knew this in the 4th week in May.

So what did I do. I invested in gold futures — call options expiring in Jan 2011 strike price $1,100/oz.

My theory was that this was a way of betting against the market, and it was much safer than shorting stock. See I was trying to play it safe. I figured the market would go down, gold would go up, people would seek the haven of precious monetary metals like silver, gold, platinum.

So what happens? Everything in my vision turns out to be 100% true and correct except gold goes in the toilet along with the market and the economy.

Meantime the Fed starts creating paper money, about $1 Trillion every two weeks. In a regular normal logical world this would make the price of gold go up right?

So what happens?

The paper fiat greenback dollar suddenly becomes the Emperor of all Value in the World — the only thing people want — just more of those paper dollars please. What? Why? How Come?

OK, so now I’m wondering if there might have been a smarter way to execute on my vision. Maybe buying puts on the DIA ETF (Dow Jones Industrials Tracking fund — sometimes called the Diamonds).

So all the complicated features of gold would have been eliminated. It would have been a pure bet on the gist of the vision with no impediments or distractions.

This would have been so much smarter for me. On the same vision.

Puts would have been better than gold.

Trying to play it safe was a mistake. I guess courage of one’s convictions is key to money making. Wall Street chews up and spits out smart people every day. One gains ability to cope with Wall Street by learning the lesson from every painful loss of capital.

Am I understanding any part of this correctly. I really am asking for some help here. There’s nothing rhetorical about this question. I know there are people out there much wiser than I am about investing, so please, if you are one of those, share some knowledge with me now. I stand confused, saddened, and in need of some friendly guidance. Would DIA puts have been better than GLD calls, given my vision, and its time of occurance. If so, can I store this up as my lesson learned from this painful experience, or am I still way off base?
In Weimar when they printed a Trillion marks every two weeks the paper money became worthless.

In Argentina when they printed a Trillion Pesos every two weeks the paper money became worthless.

But in USA, in 2009, for the first time in 3000 years, when they print a trillion dollars every two weeks, the paper dollars just get more and more valuable.

What is this some kind of big trick just to fool me? Is it lile Lucy and the football with Charlie Brown. Do all the rules of the universe have to suddenly change and turn around by 180 degrees just because I make an investment? I admit it, I’m at my wit’s end, so I’m paying 5 points here to see if anybody can help me out.

financi4 answers:

You answered your own question. Don’t complicate things by trading a different market from your analysis. Your analysis involved the economy/business and stocks, yet you traded a metal?
A cursory glance at the different markets will show that EVERYTHING has been going down together for a year. There has been no safe haven and no successful bets to the upside, merely a cleansing of excess in all markets and all countries.
Inflation killed the currencies in Latin America, not printing money. Doesn’t apply yet to the US, but it will eventually.
The next leg down in the markets is just beginning. If this is still your vision, buy the put on the Diamonds or the Spyders. The metals and real estate and oil and corn are all in their own little world. Just be aware the options are a wasting asset. Short the DIA or SPY directly at 2:1 or 4:1 margin, and you can hold until the cows come home.

Mark asks…

how much does farm land cost in dungeons and dragons?

i had a player come into some good gold last session, and being the smart man he is, he decided to invest it. he wants farmland and to build a house on it for workers. problem is i cannot find a base price for land. help
table top. and i am the dm

financi4 answers:

Online? Otherwise depending on your dm

David asks…

How does one buy gold?

I’m only 18 but I feel it is the smartest thing to have money in, more so than even currency itself, so I want to put a lot of my money that I earn into gold. How do I go about this? What are all the ways to invest in gold?
JoeyV should stfu and stop being so smug. Being a c*nt only takes you so far in life.
JoeyV should stfu and stop being so smug. Being a c*nt only takes you so far in life.
Joey, how is investing money in gold rather than just having it as plane, old currency a bad idea? How is the dollar a safer investment than gold? Gold continues to go up.

financi4 answers:

You can buy the GLD etf, thru a brokerage account.
Or you can buy it from an online site. Check Kitco. I buy my Krugerrands from a coin dealer.

Personally I see gold heading down and not up. But hey, to each their own.

William asks…

I’m new to investing, any advice?

People have told me it would be smart to invest some of my money. What type of investments should I make? What’s the difference between stocks and bonds? I’m also thinking about investing in a mutual fund. Are those good? What about gold? It’s pretty expensive now, should I wait until it goes down? I pretty excited about this whole thing! Hopefully my investments will pay off so I can pay my kids college tuition when they get older. I’ve been reading all about investing, and watching CNBC and Bloomberg, but it’s all just so confusing! I just need some advice in terms I can understand. And one more thing, I don’t want to invest in any companies run Jews. Those greedy goddam Jews already have enough money as it is.

financi4 answers:

To Start Investing
It takes a long time to learn the stock market and it would help if you read some books and information online. Before you start investing in the market the first thing you need to decide is what risk level you want to take. CDs backed up by the government has about 3-4% annual return for the long term with a low risk. Bonds or Bonds Funds has about 5-7% annual return for the long term with a medium risk. Stocks or Stock Mutual Funds has about 8-10% annual return for the long term with a high risk and are more volatile than Bonds. A person could make more than 10% annual return with the right investment. Usually the more risk you take, the more return you will have, but not always. To see the Risk vs Return go to my photo: The stock market is basally made up of stocks and bonds. Investment managers pick a group of stocks to make a mutual fund or a group of bonds to make a bond fund. They even put a mixture of stocks and bonds together and call it a Growth & Income Fund.

1- MUTUAL FUNDS: I like mutual funds because they have a group of stocks (could be around 100+) invested in different sectors, and manage by a professional. Managers have lots of schooling for investing in stocks, around 8 years. So I think managers can pick stocks better than I can. You can make a buy or sell order anytime of the day for mutual funds shares but it will not go in affect until the close of the day. There are lots of different kinds of mutual funds that does not charge any fees to buy it’s shares and they are called Noload Funds. There are also some funds called Load Funds that charge about 5% of your investment. But what I don’t like is the fact that most funds has trading restriction and you may not be able to trade more than 4 times a year. That’s because it makes it hard for the fund to make a good return if there is to much trading in the fund, causing the fund manager to make more buys and sells and keep more cash on hand. Mutual funds are meant for long term investors.
2- STOCKS: Stocks is more volatile than funds unless you spread you money in about ten different sectors and know witch sector will do best. And stock trading restriction is only a few days and that’s something that I like. If you own stocks, you will need to keep up with all the company’s business so you don’t get stuck with a bad stock. That could take a lots of time. I think a person that buys stocks is taking more risk hoping to make a bigger return. If that’s the case, look at the leverage ETFs.
3- ETFs (Exchange Traded Funds): ETFs are like a mutual fund but trades like a stock and that is my main reason why I like ETFs. There are some ETFs that represents Index’s. An Index is like S&P or DOW. Index’s operate just like a mutual fund with a group of stocks in deferent sectors, manage by professionals. You can’t buy Index’s because they are not for sell. A company owns them. But you can buy a mutual funds or an ETF that has the same stocks as the Index they represent. There are a lots of different kinds of ETFs for someone to choose from. Some have 1x leverage, some have 2x leverage for aggressive investors, and some has 3x leverage for more aggressive investors. There are some that represent almost every kind of sector.

You can find several good brokers that charge $8.00 and under, per stock trade and no fee on Noload Funds. Most broker websites have good research tools. Some popular broker websites are Fidelity, TD Ameritrade, E-trade, Scottrade and others. I think you need a min. Of $500 (some sites $2,500) to open a broker account and need to be at lease 18 years old. If you not 18, you might could get your Dad to open an account for you.

Joseph asks…

What is the best way to plan for retirement?

Is it smart to just got with whatever program my job offers? Is it safer to just start my own savings? Should people invest in something more stable like gold?

financi4 answers:

How old are you? You talk about safety like you are 99. The stock market crash of 1929 and The Great Depression were 78 years ago. Gold is hardly a stable asset. Please read my profile and send me an email. Start by telling me your age.

Ken asks…

Can I live, or at least partially live, off of stocks?

Is it a smart choice? I’m 19, is that to young to get started? The dollar is about to be nothing, so do I invest in gold and silver? Do you get paid quarterly? If I was to be part owner of a company, would that mean if the company failed it would be partially my fault? Please I really need help!

financi4 answers:

Don’t start investing if you have to ask this question.

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