Usually, my Bloggingstocks posts go under the general heading of "Going down in flames," and my basic beat is stocks that you absolutely DON'T want to invest in. That having been said, under the current circumstances, I've decided to cool down the rhetoric. After all, when commentators are yelling about a financial holocaust, armageddon, "blood on the trading floor," and so forth, it just doesn't seem like a good idea to fan the flames.
Although, in the interests of total disclosure, I should point out that my wife, who works down the street from the Stock Exchange, DID recently see the four horsemen of the apocalypse sipping coffee beverages in a Starbucks. Famine, ironically, was wolfing down coffee cake like Michael Phelps on weed.
At any rate, the last few days has witnessed people running for safe bets like oil, gold, and silver. This makes a lot of sense; when things get tough, people want to put their money into things that they can see and feel. Gold feels solid, as does silver, and oil isn't likely to drop anytime soon. Like people hoarding diamonds in times of turmoil, commodities just seem really secure.
To a certain extent, they ARE secure. While the value of gold fluctuates, it isn't likely to drop almost 25% in a day (I'm looking at you, Morgan Stanley), nor is its value dependent on a massive federal buyout. With Citigroup talking about $1000 gold by the end of the year and some overly excitable analysts stating that gold will hit $1,500 in the near future, it seems foolish to not run and dump all your money into gold THIS VERY SECOND.
The thing is, though, that gold is already inflated because of consumer fears about the market. Granted, it had its largest one-day gain yesterday, topping out at $870 an ounce. For that matter, Citigroup's prediction of $1000 gold seems likely to happen. However, it's important to take a step back and realize that the demand for gold is being massively driven by speculation and terror. If the market stabilizes, the value of gold will drop. If, on the other hand, the market doesn't stabilize, well, that's not really worth considering right now...
So, bottom line, if you want to put some money in gold and make a little cash in the next few weeks, go ahead. Long term, though, most advisors are arguing that it's a good idea to stick with the market; I'd tend to agree with them.
Meltdown: Why you might not want to dump everything into gold
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Reader Comments (Page 1 of 1)
9-19-2008 @ 11:48PM
jerry mcdonald said...
Full faith of the government, aren't they the jackasses that got us here.World economy,free trade,wto,united nations,the tooth feiry.
9-20-2008 @ 2:26AM
ynot said...
I have a simple solution to the financial crisis. You get the top 1,000 richest people in the country and take all but 1 million dollars of their money and pay off the bad debt. They also get to keep 1 of their homes free and clear with no property taxes for the rest of their lives. This way only 1,000 people suffer instead of 90% of the country. And to show how patriotic our government is, and how they truly care about the poor in this country, every senator and President should do the same. We'll just call this the elite bailout. Now that sounds fair to me. 1st in line Mr. Bill Gates and the rest of the Forbes 1,000.
9-20-2008 @ 11:24AM
Limoman said...
Oh Balaoney! I serve all these Financial Companies .... and here's the big secret?
Invest your $ into "BALANCED FUNDS"!
The Stock market HATES them! Why? They have to deal with fellow Pro's , not amatures..
VWELX,VWINX,FPACX,OAKBX,PRPFX,PRWCX,WMRIX,WMMRX.. Ave = 10% apy past 10 yrs!
Don't take my word for it..Ck them out yourself!
Invested equally in them? YTD = +1%
past 10 yrs = 10% apy
And I think our SS should be invested in them as well.. We'd have Twice as much SS income as we do now.. and for future Generations..
Saving just $2,000/yr from age 25? You'd have over $300,000 saved up, making $30k yr thereafter+ $40k in SS = $70 kr yr!
God Forbid! Tell them Sen. McCain! Tell them !
9-20-2008 @ 11:32AM
Limoman said...
Well the real Jackass's are US, for Electing our congress and not staying ontop of them.. watching what they are doing..
We have no-one else to blame but ourselves...
It's like Putting up a StopLight AFTER some get Injured or Killed..
This justifies the cost to do it..
Wonder if Obama or McCain will Be Really Honest and Tell us how they will Bal. our Budget so SS & Medicare won't go Broke?
And are going to Cut Spending by at least 5% every Yr after getting elected?
And How they
9-20-2008 @ 11:33AM
Limoman said...
Steal from the Rich to pay the Taxes?
LOL..In your Dreams my friend..In your Dreams..
Whom do you think deserves their $?
A. One who works for someone else and wants a Salary Check and not a Commission?
B. Or One who is willing to be paid on Commission based upon their Own Job Performance?
That's, my friend, the difference btwn Joe Schmo and a Millionaire...
I'd say, lets start putting EVERYONE on a 50% Commission basis and watch what happends...