| Currencies Gold Gurus missed the plot entirely by advocating that the average person should buy physical gold. Currencies Gold and Oil prices along with stock prices rise and fall over time. The same applies for property prices. The Global Financial Crisis if it has any lesson for investors is the importance of maintaining liquidity. The markets are not sedate stable environments where the prices of various assets, stocks , commodities, bonds and property remain constant. In fact the very opposite is the case. In past decades demand forces and a growing population along with industrialization and consumerism propelled investment assets like a rocket ship to Mars. However it is impossible for growth rates and escalating prices to continue indefinitely. Lamentably the market rigging and games played on Wall Street by Investment Bankers contributed to an exaggeration and false valuation of property and share market assets. Obviously when sanity prevailed the prices of such overvalued assets had to fall. The knee-jerk reaction of many was to buy alternative assets and switch out of US dollars to Euros and almost any other currency in the world. For some time the strategy of buying gold and silver and currencies other than holding US dollars was effective - and the price of gold appreciated strongly. Gold appreciated in price partly due to the increase in its demand and also due to the fact that as gold when priced in US dollars any decline in the US currency is met with an inverse rise in the gold price. Conversely when the value of the US dollar against other currencies rises the price of gold and silver has to fall. In order not to get caught in the same type of meltdown as occurred in property and share markets currencies and gold investors need to become traders and learn forex trading strategies - that will not only protect their assets but also enable them to take advantage of profitable opportunities in all markets regardless of which direction prices are moving. Consider the investor who bought physical gold as it was rising at the first moment that it hit 1550 an ounce. When it had rise by $200 they were certainly celebrating. But where do they sit today with the price of gold back to where they purchased the precious metal? | And what about the poor soul who bought gold when it hit $1700? The decline in the gold price would be bringing tears to their eyes and they are now confused as to exactly what they should be doing now. For both individuals they would be better off had they been trading currencies and gold derivatives instead of buying physical. While it appeared buying physical gold when the US dollar was in a tailspin the gold gurus had no strategy of how to deal with the inevitable reversal in the price of gold when the US dollar changed direction, as it has now done - largely due to the woes of European countries and the consequent decline in the value of foreign currencies against the US dollar. Wall street investors who were caught holding stocks when the share markets of the world collapsed clearly wished they had liquidated their holdings more quickly. Similarly property investors and holders of mortgage securities also wished the same. How many financial planners and other so called investment gurus were caught out by failing to recommend higher levels of liquidity? With the spread of internet forex brokers it is possible to buy and sell currencies, gold, silver and oil within seconds. Instead of adopting the flawed buy-hold strategy used by traditional share investors currencies and gold traders should actually be trading - not investing. Adopting a trading approach to buying these alternative assets can enable a gold buyer to sell his gold at an instant. There are various trading schools and free lesson materials abound on the internet to assist. This links to the best for learning how to trade currencies and gold. And also these links: trading Forex Commodities and Futures education | |
Sunday 1 January 2012
Currencies Gold Gurus Miss the Plot
