The Daily Paul has been archived. Please see the continuation of the Daily Paul at Popular

Thank you for a great ride, and for 8 years of support!

Comment: Yes, diversification is key.

(See in situ)

In reply to comment: I disagree (see in situ)

Yes, diversification is key.

Yes, diversification is key. But my main point is that the buy in point is important. Just look at the story of this guy's old dad:

The way people talk about gold here, it's like there are NO risks involved whatsoever and you will never ever lose money no matter which time you buy in. If that were true, stories like the above wouldn't exist.

The key is that the only people that don't really have to worry about holding gold are those that bought gold EXTREMELY early, just right at the moment when worry about the economy starts to hit. For those people, it really does not matter if the exchange goes up or down, they will really retain their value in whatever scenario pops up.

But if you step in late when prices are high, the risk of losing money when the economy recovers (or food shortages) grows with each moment you delay buying gold. Because these two times are the moment the goldprice plummets. Because its fear that fuels the gold price in a crises. You can see this by simply looking at the goldprice during a crises and the prices after the crises ends. It's during crises that the goldprice is high. But after, not so much. In other words, gold prices plummet after a crises ends.

What does this mean? It means that people who buy gold close to its peak price are screwed.

Now, I'm not saying that you shouldn't invest in gold. It's EXTREMELY smart to invest in gold at this moment. That's because gold IS likely to increase a considerable amount in the near future and that gives you alot of room to step out at any moment. But you must realize that any goldbuyer at this moment that is buying TODAY is actually a little late to the game. For those buying gold late, it's ESSENTIAL to sell it for a price between its peak price and the buy in price and to keep watching the exchange.

The exact peak price is hard to determine, the only thing I can say to people just dabbling in these kinds of things, is to watch the prices with a close eye and not let greed get in your way. Be extremely risk averse regarding these matters.

Regarding land, land also has the same problem that anyone buying land TODAY would also be late to the game. One also needs to watch the prices of land periodically.

The best most risk averse strategy is to only invest that amount of money in gold and silver you can sell quickly (look up sites or exchanges where you can sell large amounts). And then whenever you read the news about foodproblems or when you notice the crises dying down, that's when you sell. Now, it's possible that prices will continue to go up for gold, so you may lose some potential profits. But rather that than risking a loss. You can always buy back in later.