Drop in Gold Prices

The drop in the price of gold over the last few weeks has caused people to ask me a lot of questions.

I have owned and recommended owning gold for a long time however, I am an uncommon gold and silver owner.

In fact, I believe that as many as 90% of gold and silver owners are incorrect in how they view their assets.

A lot of people who buy gold and have this idea that they will make a fortune; this isn’t always the case however. These people will listen to “experts” who say that the price of gold is about to skyrocket or they see commercials which promise to get them rich quick in gold or silver so they can sell gold for cash.

So like I was saying at first, when people see silver and gold lose value like it has in the past few weeks, they stress out. The trade they made isn’t working out so well.

Once again I own a great deal of gold and silver and I do recommend you do the same. I do have an unusual method when dealing with my holdings however, I hope I lose money on them.

You see I view the price of gold and silver exactly the same way as a homeowner views his insurance policy. Homeowners buy insurance in case of disaster and hope it does not come. A homeowner would love nothing more than to never cash in that policy.

In the same vein, I hope that I never make money on the price of gold or silver and I have already told many of you this.

Economies and markets behaving relatively normally is what I want. If the price of gold and silver remain constant and I don’t make money it is better for my grandchildren. To me that is the most important thing.

In the short term if the price of gold blows up to $12,000 an ounce yeah I’ll make money on it and sell gold for cash but there is a very good chance that I will incur a great deal of problems to go along with those profits. If given the choice, I would like to live in a realm where the U.S. dollar’s value is not fluctuating each month.

What I like to do is maintain a big part of my investable assets in what I like to call “insurance.” One of the best things for this purpose is gold and silver. The remainder of my assets are held in stocks, real estate and cash. When the price of gold or silver loses value It doesn’t phase me.

I encourage you to buy these types of hedges, similar to a homeowner who buys insurance or like a driver of a car buckles his seat belt before pulling into the street.

Take the advice of a wealthy investor, purchase gold and silver and pray there never comes a time when you will have to “cash in” on the gains.

Live long and prosper.

AL