10

When Is a Good Time to Buy Gold?

Please share the knowledge

big golden clock

Time keeps ticking, when is a good time to buy gold?

A big question that a lot of professional investors are talking about is: when is a good time to buy gold? Is there a time when you should buy gold and a time when you should not buy gold?

One thing that most investors agree on is that gold is a very good investment in economic turmoil and recessions. The reason why gold is said to be a good investment during recessions is because it is seen as a safe investment.

If you have heard that argument you might think that the only time to buy gold should be during economic recessions. Me, and a lot of other investors, beg to differ. I like to argue that there is no good or bad time to buy gold if you look at it long term.

Sure, if you are somewhat of a day trader that goes in and out of the gold market every day then looking for price peaks and drops are very important in order to make money. But when I invest in gold I do so for the long term gains.

I do not expect to be a millionaire over night just because I bought some physical gold. I am looking 5-10 years ahead when I invest in gold.

So what do I mean when I say ”for the long term”?

I think the easiest way to prove my point is to do an example of a person investing in gold for the long term gains. Lets look at the results that my imaginary gold investor Bill has been experiencing.

Bill was born in 1955 in a regular family of 5. Growing up he was a very productive and energetic person that had a job since he was 15 years old. By working after school and on every summer break Bill had saved up $10,000 by the time he was 20 years old.

Not knowing what to spend his money on he started to do a bunch of researching on investing. After spending a few days at the library he finally had decided what to do with his money. He was going to invest them in physical gold.

In November 1975 Bill bought gold for $10,000 which gave him around 69 ounces of physical gold (gold price in November 1975 was around $145/ounce).

One of the biggest reason that Bill chose to buy gold for his money was because he didn’t have to constantly be involved with the investment. He just had to buy it and put it away. Unlike the stock market where you constantly have to be on top of your investment to make sure that you do not loose money.

So how much is Bill’s gold worth today then? At the time of writing this post the gold price is around $1,250 for one ounce and Bill got 69 ounces. This makes his gold investment worth a whopping $86,250!!

In 41 years Bill has seen his investment increase by 862.5%.

This is by just buying some physical gold and storing it. He never had to take any financial classes in order to do the investment. He didn’t have to worry about all the stock market crashes that happened under this time period. He basically made a 862.5% gain without doing anything. Now that’s the way I like to invest. I don’t know about you?

If we go even further back in history (so over a longer term) we will see even bigger results. If you bough gold for $10,000 in 1920 that would be worth a staggering $604,156 today! That is a 6041.5% increase in your investment.

Have a look at the chart below which is the price of gold from 1915 until today. The price of gold is going in one direction if you look at it over a long period of time, and that is straight up.

historical gold chart

When you look at gold prices over a long period of time you can see that it is going straight up. Do you want to get on the gold train?

This is what I mean when I say that I invest in gold for the long term. I mean just look at the chart! Yes gold has it’s small peaks and dips here and there but if you hold onto the gold long enough you will see tremendous gains, just like Bill ”did”.

This is why me and a lot of other gold advocates are saying that there isn’t a perfect time to buying gold. If your not planning on buying gold today and sell it tomorrow then there is only one direction that your investment is going, and that is higher.

Why wait until tomorrow when the price is even higher?

Gold can be $10,000 in just 2 short years

Another point why I don’t see a reason to wait for ”a perfect moment” to buy gold is the fact that I can see gold soon doing the same incredible jump as it did in the late 1970s.

The reason that gold keeps going higher and higher is because of inflation. The same reason to why the groceries that you buy on a weekly basis keep going up in price.

In 1978 the price of gold was around $175 for one ounce. By the end of 1980, just two short years after, the price of gold had jumped to $850! That is a 485% increase of your investment in just 2 years. Wouldn’t that be nice?

Gold went up almost 5 times because inflation in US was running out of control.

Today our governments and banks are doing the exact same reckless things. They keep printing more and more money every second of every day in order to pay their bills. I’m sure you have noticed the US national debt? Right now the national debt is around 19 TRILLION DOLLARS and it is expanding every second.

This is obviously not sustainable and sooner or later inflation will run out of control just like it did in the late 1970s.

If the same thing were to happen and gold jumped up 5 times in 2 years that would put gold at around $6250. I personally think that we have a bigger debt problem today then we had the last time gold did this jump, which is why I think gold will be closer to $10,000 this time around.

gold keeps going higher

When inflation runs out of control gold will skyrocket without warning. Do you want to own gold before everybody else wants to buy?

Final thoughts

Gold keeps going higher and higher if you invest for the long term. That is why I don’t see a reason to wait for a ”perfect” moment to buy. After looking at the chart above do you wish that you bought gold 15 years ago when it was around $250 an ounce?

With this post I hope that in 15 years from now you will not look back and say the same thing. That you wished you bought gold when it was $1,250 an ounce.

Also if you don’t believe that our current system is sustainable with the massive increase in debt then gold is the perfect bet against it. Once the inflation starts running out of control everybody is going to want to buy gold just as in the late 1970s.

Do you want to buy yours now, before everybody else, or wait until everyone is looking to buy gold and the price is higher?

My top 3 reasons for why you should invest in physical gold today.

Why Should You Invest In Gold?


Please share the knowledge

10 Comments

  1. Hello Marcus,
    this is a very interesting article about gold and investment in physical gold. Yes, the gains over the years are really amazing. Do you recommend gold coins or gold bullion?

    • Hi Bernd.

      I personally recommend buying bullion. I mean you can buy bullion in a ”coin” format as well but as long as the coin is close to the gold price it’s all good.

      What I don’t recommend is buying numismatic coins. These are the coins that are suppose to be rare and valuable so there is a ”collector” value in them. If you don’t know exactly what you’re doing it’s very easy to get scammed there.

      Check out my page about how to invest in gold. There I go through how I do it.

      Thanks a lot!

      Marcus

  2. I agree with your opinion. Just the reason of uncontrollable inflation should be enough. That is why I bought a bit of gold for safe keeping. You can not predict the future, but history tells us that Gold has always been the measuring item.

    Actually, it is not that Gold has gone higher. I read it, our money has lost its value tremendously.

    • Hi Arief. You’re very right on that. It’s actually not the gold, the house, the big mac or the rice that goes up in value. It is the dollar going down. Every year one dollar can buy less and less goods and services so it feels like the price is rising but it’s the value of the dollar that is tanking.

      The dollar has lost almost 95% of it’s value since 1971! I do NOT want to be invested in that. The reason why it looses it’s value is because our governments and central banks keep printing more and more money. And it’s basic supply and demand that the more there is of something the less it is worth.

      As long as the government and banks are printing money they will create inflation. Sooner or later the inflation catches on and gold price skyrockets. I want to be in on that!

      Thanks!
      Marcus

  3. Marcus,

    Excellent investment strategy!

    I love your example. I’m not any kind of financial genius, but I have attended investment workshops, and there the goal is to find investments that can earn 5% to 10%. Compare that to Bill’s return of 862.5%!

    Plus you make an excellent point on the simplicity of the investment. No checking the stock market, no worries about corporate scandal, no anxieties regarding a hostile take over. Just buy it, store it, and watch it increase in value.

    For someone like me, who does not imagine being able to master the ups and downs of investment portfolios, your advice is: Good As Gold!

    Thank you for your excellent advice.

    Roger

    • Thank you very much Roger for the kind words. I totally agree with you. The people that you are competing against if you invest in the stock market is highly educated science people that read charts and graphs like it’s nothing.

      With gold you just store it and let it do it’s thing. And still, without the fancy degree and the science brain Bill has outperformed most of the stock market investors over long term.

      Marcus

  4. It certainly seems like a wise investment, long term the value is only going to go up, I’d be interested to see how it compares to other forms of investment. Also how do you deal with storage? I’d be a little reluctant to keep it under the mattress?

    • Hi Dan.

      It’s the wisest investment of them all if you ask me :). If you compare it towards stock markets you have to take into consideration that there has been a lot of stock market crashes in the past 40 years (even more the further back you look). If you were not on top of your investment strategy and/or had an investment broker that was really good. You loose on average about 50% in every stock market crash.

      Gold has still outperformed almost every single investment that you can do if you look at the past 40-50 years. And when investing in gold you can feel safe that your asset is outside of the financial system and often goes up in value in a stock market crash and not down.

      There are facilities where you can store your gold but you will of course have to pay a small storage fee. If you have a lot of money in gold I would suggest getting a safe storage. But for the average small investor I see no problem in having it at home.

      Gold stores a large amount of wealth in a small object so I’m sure you’ll find a safe place ;).

      Thanks Dan!
      Marcus

  5. Great article!

    I have always wanted to start investing in gold but I do not necessarily have money that I can use to just put into purchasing gold. I am looking for a more ongoing cash flow for my money as of right now.

    I have heard many stories where people invest in gold and then come to find out later that they bought fake gold. Where would I go to make sure I am getting real gold and fake gold? Because I am no gold expert.

    Thanks for the read.

    • Hi Derek.
      Thanks a lot for reading my article. Not having enough money is usually the first problem in starting to invest in gold. I had the same issue when I started, I mean it takes a while to save up around $1300 to buy an ounce of gold, right?.

      What I do actually is that I have a savings account in gold. Every week (you can set it to months as well) I buy one gram of gold as a savings program from a company in Germany.

      The company has the highest ratings for their purity of the gold and it comes in small cards (like a credit card) but with one gram of pure 99.99% 24 karat gold bullion in the middle. The company also has the LMBA stamp which is highly respected within the gold community.

      The company is called Karatbars. I’ve been doing it for a while and I highly recommend it. It’s free to start a savings account and you can directly set up auto payment.

      Email me at marcus@whyphysicalgold.com if you want more info.

      Thanks again!

      Marcus

Kommentera

E-postadressen publiceras inte. Obligatoriska fält är märkta *