Confessions of a Former Goldbug

With the price of gold pushing towards the $4,000 level (currently $3,783) a Former Goldbug wrote to us describing what he believes will happen next with Gold.

Using the name “Goldmember” ala the Austin Powers movie Goldmember, our reader laments some of his past experiences owning gold.

 

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Mr. Vincent, I’m sure I don’t need to tell you that gold is up 45% YTD and continues to seek new all-time highs.

And it is my firm belief that it will continue to $5,000 and beyond…sooner than most Wall Street Guru wannabes are predicting.

In fact, most of the Gurus still don’t own much gold and the average investor has little to none.

But that’s about to change soon.

Some background…Back in 2008 during the meltdown I became very skeptical of stocks and turned my focus almost entirely on gold.

However, it took me until 2013 to realize that gold (by itself) is NOT a good investment.

But gold is a great investment as part of a larger portfolio.

And when mixed into a portfolio of stocks and bonds, gold works wonders to both reduce volatility and increase overall long-term returns.

It works that way because gold has a low or negative correlation with stocks, bonds, and other financial assets.

So, when their prices go down – like in the three major crashes since 2000 (Dot-Com, 2008, and Covid) – gold prices often hold strong or rise.

But stocks don’t need to crash for gold to make you money.

Gold has gained 40% this year, while the market is up 14%.

And Gold is having its best year since 1979, as analyst Charlie Bilello’s chart shows:

 

 

 

 

Former Goldbug Problems

 

Unfortunately, goldbugs like myself learn lessons the hard way by only owning gold.

And much of that reasoning is because:

 

• Unlike stocks, gold doesn’t require the economy to keep humming or trade to keep freely flowing to rise in value.
• Unlike government bonds, gold doesn’t require politicians to act with long-term prudence to hold its value.
• And unlike the US dollar, which has lost 86% of its purchasing power in the last 50 years, gold has always appreciated over the long term.
• Gold’s value is independent. It doesn’t require anyone to keep promises. It’s the only financial asset like this.

 

 

You don’t have to become a gold bug or cheer for the implosion of the financial system.

Because you can own gold just in case.

Chances are you’ll never need it. But if you do, you’ll be happy you have it.

And every time I’ve put off buying gold, I’ve regretted it.

It wasn’t that long ago (2010) when you could buy 10 ounces of gold for $10,000. 

Today you can’t even buy three ounces for $10,000.

And the question I have is, How long until $10,000 only buys one ounce of gold?

 

Mr. Vincent, you have written many articles on gold and it would be great if you could update all of us with where you see gold going over the next three to five years.

 

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Thank you for the insight, Goldmember!

Not surprisingly, we at FinancialsMatter all have a little “Goldbug” in us too.

And you can expect to see an update on Gold in our upcoming October issue of “Simplifying Wall Street…In Plain English” (HERE).

Ironically (or NOT) it’s outperforming every other asset class out there.

Share this with a friend…especially if they are still waiting around to buy gold.  They’ll thank YOU later.

 

And tell them:

 

We’re Not Just About Finance

But we use finance to give you hope.

And you shall know the truth,

And the truth shall make you free

 

~ John 8:32 ~

 

 

And don’t forget: