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Why Gold? Let's Compare

Let's compare investment in gold to investing in other assets.


Various charts, inflation , stocks vs. gold.

This chart shows a shrinking paper dollar purchasing power. 95% in the last 100 years:
Shrinking dollar price, 1913 to now

Why not just purchase stock? DOW has been going to the moon, right?

Well, let's start with that DOW is first. Index DOW is not a stable index, mathematically speaking. If you invest in a specific stock that is part of DOW index, chances are 20 years down the road it won't be there. So "DOW will grow", but your stock may plummet. And you lose more when stocks go down than you earn when they go up (mathematically speaking , again, see below*).

Gold Investments

Why invest in gold. Gold is money, this has been admitted numerous times even by the FED themselves. Since Gold = money, you can look at it as another, alternative Currency, that has significant advantages over other currencies: it can't be inflated. Gold always maintains its intrinsic value. Price of gold, however, can fluctuate based on trading of paper market, i.e. "paper gold".

This is gold chart last 20 years:
Gold Chart, last 20 years

Keep in mind that there's a lot more "paper gold" exist than actual , physical gold. Some financiers even estimate paper gold to be 10 times larger that physical gold. That's an excellent news for physical gold investors, as some of that paper will be chasing physical.

* How you lose more money when stocks go down
Imagine you invested $100 in stock.
If you got lucky and those are good years, and it went up , you are happy.
If however (more than 50% chance) that stock went down. Say it lost 20% and you are now left with $80
In order to get even you now need a gain of 25% (not 20% : $80 * 1.25 = $100).

That is what your broker forgot to tell you with his "buy and hold" strategy.