Gold is the one and only investment that I strongly believe every investor needs in their portfolio at all times. However, don’t go overboard and don’t fall for sales pitches that are meant to frighten you into buying gold. In this episode I’ll teach you the basics of investing in gold, what it can and cannot do for you, and how to get started if you don’t yet have any gold in your portfolio. I also discuss how to use fundamental and technical analysis on gold to find the best buying opportunities.
Section 1: Background & Basics
- History of gold as money
- Who owns it, and in what form?
Section 2: What Determines the Price?
- Fundamentals: global supply & demand
- Financial conditions: Supply of money and credit, interest rates (real and nominal), inflation rate, health of the credit markets, and the rates at which these are changing
- How I create my forecasts
Section 3: Why You Need Gold – The Rational Arguments
- JP Morgan, 1912: “Money is gold, and nothing else.”
- Liquidity (ease of conversion to paper currency)
- Protection against inflation AND deflation
- The wealthiest central banks and investors are holding gold – shouldn’t you?
Section 4: Risks, Downsides, and Common Mistakes
- Keeping too much of your money in gold, silver, or mining companies
- Buying based on fear or panic
- Buying from a less-than-reputable dealer
- Buying at the top of the market
- Security concerns
- Tax treatment (United States)
Section 5: How to Begin Today
- Take stock: How to determine if you are ready to purchase now, or if you should wait
- Choose what form(s) of gold to buy – or, whether to start with silver because it’s more affordable
- How to buy gold coins
- How to buy gold bars in fractional/unallocated form (vaulted storage)
- How to buy “paper gold” (e.g. ETFs)
- How to buy shares of gold mining companies
- Advanced strategies for earning cash flow from gold holdings
Historical gold price chart:
Intro music by audionautix.com