Today gold hit $750, the highest its been in 28 years. It looks like we might break the previous intra-day high of $850 within the next few months.
There was a slew of bad news today related to the housing industry and inflation worries and both oil and gold reacted by going up. I bought into GDX today which is the gold mining index. I had bought it last year, but I sold it to buy actual gold coins.
I’m still heavily bullish on gold and I think we’re still in the beginning stages of a rally. Why do I think so? Because almost everyone I know ridicules my idea of gold being a good investment!!!!
Typically, the average person does his investing by looking through the rear-view miror. He invests in whatever was hot last year or the last few years. I fell prey to that investing mindset early on in my investing adventures. I saw that tech stocks had done phenomenally over the past few years and in late 1999 I dumped all my savings (and some money I borrowed off my credit cards) into the high-flyers and subsequently lost all my money. I later found out that successful investing entails “anticipating the anticipations of others”, to quote John Maynard Keynes.
Once the popular media starts hyping up gold, then the average person will want to get in on it.
In a few years, when my friends start asking me about gold and how to buy, I’ll know its time to get out!
Till, then I’m a gold bull. I’ll take a shiny piece of yellow metal over a green piece of paper with a promise on it anyday!