Why Invest in Gold: Ready Fly or Fall?

Why Invest in Gold: Breakout Or Breakdown

Updated March 2023

Gold experts have been making proclamations of a gold breakout since the beginning of time, yet most of them are no longer with us. While these experts love to talk, their predictions hardly ever come true. Looking at the Gold Market Price, it’s evident that these charlatans are full of it. One would think that such a fantastic record of failure would silence the remaining Gold bugs or at least make them more cautious. Still, they continue to throw caution to the wind and willingly oblige their silly followers by coming out with drug-induced targets.

Bitcoin Achieves What Gold Never Could

Bitcoin has already achieved what Gold never could and never will, but gold bugs conveniently ignore this major development. It’s a significant development because it indicates that the masses have embraced Fiat instead of Gold. It will take a massive financial tsunami before they even consider Gold again. Gold experts’ predictions have not come to fruition, raising the question of whether investing in gold is worth it.

So Should Invest In Gold?

Despite the unreliability of gold experts’ predictions, gold is still a valuable asset that can provide diversification and hedging benefits in a well-diversified investment portfolio. Gold is considered a safe-haven asset because it has held its value throughout history, even during economic downturns and inflationary periods. Gold is also considered an inflation hedge because its price tends to rise when inflation is high.

Moreover, gold is a tangible asset you can hold in your hand, making it a store of value that you can use to barter or trade. Additionally, central banks worldwide have gold in their reserves, reinforcing its value and making it an essential part of the global financial system.

This is a video of the article titled gold market finally ready to break out? Of which a small excerpt is provided below

The Historical Failure of Gold Experts

Throughout the years, many experts have predicted that gold would skyrocket in value, but time and time again, these predictions have proven to be nothing more than wishful thinking. In 2016, we stood firm in our belief that gold wouldn’t grow much, even as other so-called experts insisted that it was ready to soar to unprecedented heights.

Since 2011, we have advised investors to be cautious with gold until the trend turns positive and instead to seek out more lucrative markets such as equities and the US dollar. Despite the hype surrounding gold, it hasn’t met expectations.

Some experts have gone so far as to issue outrageous price targets for gold, claiming it could reach $20,000 or even $50,000. However, we believe such predictions are nothing more than fear-mongering tactics designed to draw attention and create hype. In reality, gold has consistently failed to reach these lofty targets, and we see no reason to believe it ever will.

What about Bitcoin?

The Fed has learned a lot from its previous experiments. The way to win is to control the crowd’s perceptions. To do this, you alter the definition of inflation and convince them that a worthless piece of paper is as good as Gold. Both of these objectives have been achieved; it will take inordinate levels of pain to fuel mass resistance. Good luck with trying to figure out precisely what the masses threshold for abuse is. Bitcoin is OK to play occasionally but will not replace the dollar or any other currency. Bitcoin is an experiment to conning the masses into embracing digital cash and eliminating paper currency.

When digital currencies are eventually embraced, the odds are very high that the government, with the backing of the Fed, will issue their own e-money and blow the competition out of the water. And a cashless society is what the big boys have always salivated over; first, the masses resisted, but now they are slowly folding one by one. Market Update, June 12, 2019

Why Invest in Gold Jan 2020 Update

The most effective way to break away from the 9-5 grind and achieve financial freedom is to stop allowing the media to dictate what you should or should not do. On its best day, the TV set is worse than a sewer. The media wants you to run in circles like a hamster on a wheel; only in this case, your wheel is much larger, and so it creates the illusion of movement and freedom. Like the hamster, the masses think the faster they run, the further they will go, but in reality, they are not moving.

The most important concept to master in the markets is that the masses are always on the wrong side of the markets. Mass Psychology can help you get a leg up on the masses.

It takes no effort to panic, which is why there is no reward, but it takes effort to remain calm in the face of panic, which is why the rewards are usually very high.

Above Averaged Volatility expected

Overall we expect volatility levels to remain high, so expect swings in both directions ranging from mild to possibly wild, and we would not be surprised if many parts of the world experience weather patterns bordering on the insane in the weeks to come. Stormy weather is usually followed by insane human behaviour. Hopefully, we are wrong, as when it comes to wild weather, we are only too happy to be proven wrong as it brings untold pain and misery to many.

On the political frontier, the situation will continue trending towards the insane. By 2020, any sane person will think they need some strong medicine to follow what the candidates offer. So far, the scene has all the makings of a D-rated movie.

The only real law that applies to the financial market is that there is no law. We are dealing with emotions; when emotions run amok, all hell breaks loose. That is why like cattle, the masses always stampede when the markets sell-off, and they all jump in when the bubble is about to pop. Hundreds of years have passed since the Tulip bubble, and nothing has changed.

Gold Update March 2023

While gold experts have a history of making inaccurate predictions, it does not mean investing in gold is terrible. Gold can provide diversification and hedging benefits in a well-diversified investment portfolio.

The Cons

It’s important to note that while gold can provide diversification benefits, it’s not without its drawbacks. One significant disadvantage of investing in gold is that it doesn’t generate income or cash flow, unlike stocks or bonds. Investors seeking regular income from their investments may find that gold doesn’t meet their needs.

Another potential disadvantage of gold investing is that it can be volatile. Gold prices can fluctuate wildly in response to global economic and political changes. This volatility can make it difficult for investors to time their entry and exit points and can result in significant losses if prices decline sharply.

Investors must also consider the costs of gold investing, such as storage fees and transaction costs. These expenses can add up over time and eat into potential returns.

The Pros of Investing in Gold

However, despite these drawbacks, good reasons exist to consider investing in gold. One of the primary benefits of gold is its ability to act as a hedge against inflation and currency devaluation. Gold has historically maintained its value over the long term and can provide protection against the erosion of purchasing power that can result from inflation.

Gold can also be a valuable addition to a diversified investment portfolio, helping to reduce overall portfolio risk and volatility. By investing in a range of assets, including gold, investors can spread their risk across multiple asset classes, which can help to mitigate losses during market downturns.

Ultimately, investing in gold will depend on an investor’s circumstances and investment goals. While gold may not be a panacea, it can provide valuable benefits to a well-diversified investment portfolio. Investors must weigh the potential benefits and drawbacks of gold investing carefully and make a decision that aligns with their investment objectives and risk tolerance.

References

These articles discuss the benefits of investing in gold:

“The Role of Gold in Investment Portfolios” by the World Gold Council: This article discusses the role that gold can play in a well-diversified investment portfolio. And the benefits that gold can provide to investors. https://www.gold.org/goldhub/research/role-gold-investment-portfolios
“The Case for Gold in a Diversified Portfolio” by BlackRock: This article explains why gold can provide diversification benefits in a portfolio and why investors should consider adding gold to their investment mix. https://www.blackrock.com/us/individual/insights/gold-diversified-portfolio
“Why Gold Is Still a Safe Haven Investment” by The Balance: This article discusses why gold is still considered a safe-haven asset. And why investors may choose to invest in gold for protection during economic uncertainty. https://www.thebalance.com/why-gold-is-still-a-safe-haven-investment-4164861
“Gold as an Investment: Performance and Characteristics” by the Congressional Research Service: This report provides an overview of gold as an investment, including its historical performance and characteristics. And the factors influencing its price. https://fas.org/sgp/crs/misc/R42877.pdf
“5 Reasons to Own Gold” by Investopedia: This article highlights five reasons investors may choose to invest in gold. Including as a hedge against inflation and a safe-haven asset during economic uncertainty. https://www.investopedia.com/articles/investing/071715/5-reasons-own-gold.asp

Why Invest in Gold: Fly or Fall?