What kind of market am I investing in if I invest in Gold Savings?
Posted by admin in Finance Tuesday, 29 November 2011 22:53 3 Comments
What kind of market would I be investing in if I keep part of my wealth in gold. Is it the commodity market? But in commodity markets, people buy and sell Contracts. Therefore, I don’t think keeping part of my savings in gold is similar to investing in commodity market. Any ideas?
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gold is a commodity. Contracts and futures aren’t the only way to invest in commodities, you can buy the commodity outright and hold it as you are doing with your gold. Buying and holding wheat or oil is messy and expensive so most traders prefer contracts and futures.
The commodities market deals in option contracts. You go long or short a futures price on a commodity (ie Crude oil, sugar, OJ, gold, etc). If you do not exercise your options correctly, you may be forced to take possession of the goods (physical barrels of oil?)
It is highly complex and easy to lose money. You can buy tangible gold assets through a gold broker and take posssion of coins and keep them in a safe somewhere.
I am not big on gold, it is trading at all time highs right now (what goes up eventually comes down some). They has to be a mark-up or premium on what you purchase. It is an unregulated market, so be careful. The radio ads can basically say anything they want, things that mutual funds companies cannot…
Read up and educate yourself on an independant website. Don’t listen to the Gold-bugs who say the world is coming to an end and buy gold. They own gold, therefore you buying gold helps them. You can’t do that with normal investments, that is called Frontrunning