Don’t buy gold as I did.

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I’ve avidly collected gold for 15 years due to strong philosophical beliefs about its future value, despite not closely monitoring the markets for the past five years. I tend to buy gold when it becomes expensive, hoping for a breakthrough, but this hasn’t happened. For instance, in 2020, I invested heavily at around $1900, and it’s only recently returned to that level. My experiences offer a cautionary lesson: Stay informed about market trends and set price drop alerts if you consider gold. Gold’s rapid price fluctuations make it a poor short-term investment, unlike stocks that offer dividends and interest. It’s uncertain if the gold market will trend up or down long-term, making it challenging as a bear market hedge due to unpredictable timing. Predicting crises accurately often relies on luck or repeating the same strategies.


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I prefer to maintain a modest reserve of gold, typically no more than 10% of my net worth, as a form of financial insurance. I obtain it from a local coin store, making the purchase with cash, and keep it securely concealed, sharing this information with no one. This approach ensures that, in the event of a personal financial catastrophe that leaves me destitute, I’ll still have a means to start anew. Numerous circumstances can lead to a complete loss of assets, such as lawsuits, divorce, legal troubles resulting in asset seizure, medical crises not covered by insurance, or unforeseen accidents.
The essence of this strategy lies in safeguarding assets from potential threats. Gold, due to its high value density, is an ideal choice for this purpose. A mere $10,000 worth of gold can easily fit in your pocket, allowing for discreet storage. Gold remains impervious to decay, rust, or tarnish, even when buried in mud for a century. While some keep a firearm for emergency situations, in my locale, homelessness is a more common concern than home invasions, making it prudent to prepare for the more likely scenarios.
Consider the worst-case scenario: a complete loss of assets. What would you do? Rely on the charity of others and live on someone’s couch? For some of us, that’s not a viable option. But for those who plan ahead with a hidden reserve of gold, it can serve as a means to regain independence. Even if you’ve lost everything else, having a few thousand dollars tucked away discreetly can be used to secure a modest apartment and transportation. Over the course of a few years, it’s possible to work your way back to a lifestyle resembling what you had before. While holding onto gold may not make you wealthy, it serves as valuable insurance against the risk of homelessness resulting from personal or financial disasters.



Absolutely true, gold’s intrinsic value tends to remain relatively constant worldwide at any given moment. Take, for instance, Brazil’s staggering 250% average annual inflation rate from 1980 to 2000, which saw gold’s real purchasing power decline by about 70% in Brazilian terms—mirroring the drop faced by US investors during the same period. However, it’s crucial to remember that holding US dollars could have been an even more favorable option. Gold might not provide absolute protection, but it could still outperform the currency you’re aiming to hedge against. Personally, I, along with many others, rely on JMBullion for my precious metal acquisitions. Additionally, it’s worth considering that platinum and palladium are part of my portfolio due to the potential for substantial growth, given the extended timeline for the full-scale green revolution, leading to reduced emissions in new vehicles, where these metals are used in catalytic converters.



However, it’s worth noting that many people today haven’t experienced a genuine crisis. For them, 1980 feels like ancient history. Gold stands out as the one asset with a proven track record of surviving the collapse of empires, world wars, plagues, floods, and hyperinflation. This is why it’s often referred to as insurance by folks in these discussions.



I aim to have around 7-10% of my portfolio in physical gold. I’m not too concerned about the exact spot price when I purchase it. I believe it will balance out in the long run because I’m still young. I’m not going to stress over potentially paying a bit more right now. If you’re hyper-focused on the price and timing of buying gold, treating it like a stock before earnings, I’m not sure why you’re investing in it.



The most straightforward approach to access the gold market is via the stock market, where you can purchase shares of gold mining companies. Investing in physical gold bullion doesn’t provide the same leverage as investing in gold mining stocks. When the price of gold increases, the elevated profit margins of mining companies can lead to exponential earnings growth. For instance, if a mining company has a $200 profit margin when gold is priced at $1,000 per ounce, a 10% increase in the gold price to $1,100 per ounce would result in the gold miner’s operating margin increasing to $300, a 50% growth.




Gold isn’t just an investment; it’s art, insurance, a great gift, a fashion statement, and a collectible. These diverse uses explain why it’s expensive and why it makes sense to buy when it’s on sale. Think of it as a form of insurance and a way to safeguard your wealth. But remember, it’s not for quick, short-term gains.



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