Gold – Why You Should Buy Gold Now!
The Dynamic Wealth Report
May 8, 2009
Gold At $899, Should You Buy?
When I started in investment banking, I quickly learned the job
was all about the bonus. While we all made nice salaries, the really big
money came in the year-end bonus. Checks for a million dollars or more
were handed out to the top performers regularly.
Real estate agents, boat and car dealers, and the high-end boutiques
licked their chops at bonus time.
Inevitably, a few days after bonuses, someone would show up with a brand
new Porsche, pictures of a new dream vacation home, or a new Rolex
(sometimes costing more than a house).
Now, here’s an insider secret that most people don’t know.
Bonuses aren’t always paid in cash. For most, the bonus is split between
cash, stock, and sometimes other items. Cash is well, cash… and as one
co-worker used to say, “It’s good enough to spend at Safeway”.
Stock is always a double-edged sword. Sometimes you got stock you could
sell right away. Other times you received “restricted stock”… stock you
couldn’t sell for a period of time. Sometimes you had to sit on it for
five
years or more.
As you can imagine, this made some people really mad.
The most interesting responses came from employees who received the
strange items at bonus time. Some were handed empty boxes and told to
clean out their desk. Others received old office equipment. I know of
one secretary who received an old TV for her bonus.
-------------Sponsor-------------
Where Can You Turn $300 Into $1.3 Million Right Now?
Our own small-company specialist, Robert Morris, has found a
way to 'sniff out' tiny penny stocks on the verge of a major breakout. And
the timing for this has never been better.
You see, the system takes advantage of an obscure SEC regulation that
sends penny stock prices through the roof.
We've seen some stocks gain 852%... 5,450%... even 17,496% in no time
flat.
Click here
for the details...
-----------------------------------
However, one of the strangest reactions was the year employees were paid
in gold.
That’s right, not cash, not stock, but gold!
I heard this story from a good friend. One year, the firm he worked for
gave away small gold bars. Each bar was about one ounce in size and
every employee got one… from the president down to the secretary. Right
after receiving their gold bar, a black market of sorts sprung up.
One of the traders on the desk offered to buy the gold bars. Of course,
his price was at a heavy discount to the current value. For the next
three days, the traders kept an informal bid / ask spread on these gold
bars.
Rumors swirled.
One person would buy your gold bar for more, somebody else less. One guy
showed up with a huge roll of hundreds offering to pay cash on the spot.
Some were quick to sell. Others haggled for a better price. Work came to
a virtual standstill thanks to this impromptu gold market.
At the time, gold was trading between $250 and $270 an ounce… I bet
anyone who sold their bars is regretting it now.
As you can see, gold recently traded up toward $1,000 an oz. And I think
it’s heading higher. That’s more than a 300% return on your money in
just a few years.
Lately I’ve gotten a lot of questions about gold.
Should I buy on the dips? Should I sell on the rallies? Is it easy to
trade gold? How do I make money?
I think right now is a great time to buy gold. Here’s two reasons why.
First is the threat of inflation.
To combat the economic recession, the US government is printing money as
fast as they can. Sometimes they don’t even print money. They just
electronically wire it to the banks. Billions of dollars just suddenly
appear in various bank accounts. No printing needed, it’s all electronic
these days.
All of this new money floating around cheapens the value of our
currency. We’ve seen it time and time again. It happened to Germany
prior to World War II, it’s happening in Zimbabwe now. As the government
prints more money, the value of the currency falls, and that leads to
inflation.
Gold’s a natural hedge against inflation. Once we see the first signs of
inflation (which could happen in the next few weeks or months), we’ll
see gold prices jump considerably.
The second reason I like gold is the rise in commodity prices.
Emerging countries like India and China are gobbling up the world’s
resources. Nothing like what the US consumes, but their hunger is
unquenchable. As these economies grow, their middle class grows as well.
With the middle class comes disposable income. And, with disposable
income comes demand for better products and services.
All of this leads to a jump in demand for commodities and eventually a
jump in price. I believe this demand will drive commodity prices higher
for the next few years. Gold is a key commodity that everyone desires.
China and India are becoming big buyers.
I could go on and on with reasons why the price of gold will go up, but
I’m running out of room.
If you like the idea of investing in or trading gold, I suggest you
avoid the futures markets.
Focus on the gold ETFs. You can capture big gains in gold without taking
on all the risk of a futures contract. Take a look at E-TRACS UBS
Bloomberg CMCI Gold ETN (UBG), the iShares COMEX Gold Trust (IAU), or
PowerShares DB Gold (DGL). Each one is slightly different. But all will
give you good exposure to the gold market.
• Cooper Tire (CTB) was upgraded by BB&T Capital
Mkts from a "Hold" to a "Buy" rating. I guess they see a turnaround in the
automotive markets approaching.
• Royal Bank of Scotland (RBS) was downgraded from a
"Neutral" to a "Sell" rating by UBS. The stock is up big (over $13) from its
lows of around $2.
• Oppenheimer recently initiated coverage on US Bancorp
(USB) and Wells Fargo (WFC). They were given "Perform"
and "Outperform" ratings respectively.
Print
Page
Bookmark Us
Home | Whitelist Us |
Terms of Use |
Privacy Policy |
Contact Us | Security |
Site Map