Precious metals investing

It is time to rethink about investing strategies.  It is time to seriously consider precious metals investing.
Most of us are comfortable with paper assets.

That means we know about buying stocks and buying bonds, in addition to keeping our money in the bank.

However, the volatility of the stock market makes paper asset riskier than before.  We need to read the annual report, and pay attention to the announcement.

We fear insider trading and the manipulation of stock price.  We hope that the company does not make any stupid decision and lose money for us.

Buying government bond is traditionally viewed as a risk free investment.  However, looking at the way the US government manages its budget, we wonder how the US government is going to get out of debt.

The fall in Dollar is a sign of poor management on the part of the government.  That is we should question ourselves just how risk free is the government bond.

Since the risk free asset (government bond) is guaranteed by the government which does not know how to balance the budget, it is not that risk free.

That is why the attention of investors turn to precious metals investing.

The price of both gold and silver is an indication of investing and speculating.

If nobody wants to invest in gold and silver, the price will stay constant.

However, the declining purchasing power of the Dollar strikes fear in the heart of many people worldwide.

Physical assets are assuring.  The government is not.  The declining purchasing power of the Dollar is certainly not assuring.

Investing in physical asset such as precious metals is less cumbersome than investing in real estate.  It is easier to sell gold and silver than to sell an apartment.

After all, all you need to do is to post the advertisement in Ebay and Craiglist, and then ship the gold bar or silver bar to the buyer.  You do not need to engage lawyer for the transaction.  You do not need the service of the accountant to calculate the taxable amount.

You cannot do the same thing for an apartment.

Diversification is good when you diversify across different asset classes.

If you have the bulk of your cash in the bank, it is time for you to take the cash out, invest in the stock market, precious metals and real estate.

Precious metal investing is easier than buying stocks.  You do not have to read annual report.  You do not need to worry that the company pays a few million dollars to the useless CEO.  You do not have to worry about insider trading and price manipulation.

It takes more people to manipulate the international price of gold and silver, than to manipulate the price of a particular stock.

That is why many people participate in precious metals investing.  Some people buy jewelries.  Some people buy gold bars. Some people participate in Exchange Traded Fund.  Some people open a precious metal account with the banks.

How high will the price of Gold and Silver reach?  Nobody knows.

The short term pricing is rather volatile.  In the long term, as in the foreseeable five years, the price of gold and silver should rise.

One important factor is the declining value of US Dollar.  If the dollar keeps declining in value, the price of Gold and Silver will continue to rise.

Only when the USD appreciates against the major currencies of the world, then we can expect a gradual decrease in the price of gold and silver.