Even though we all know that “good things come to those who wait” and “patience is a virtue”, it seems we have become very impatient, especially where our investments are concerned. Some people persistently choose investments providing immediate gratification versus larger, long-term profit potential, and this can be especially damaging to your retirement. However, buying gold and other precious metals consistently over time, also known as dollar cost averaging, can really pay off over the long term. Buying gold and silver incrementally, and especially when the market is down, results in you owning more when your metals eventually regain greater value.
In a recent interview held at the Clinton Global Initiative, renowned resource investor, Frank Giustra, emphasized that “All the reasons why gold went to $2,000 in the first place are still there, and in spades.” He further went on to say, “Nothing has changed fundamentally to tell me in any way that one should divest of their gold position. I just think you have to have some gold in your portfolio because currencies are being devalued by money printing worldwide.”
Although most investors are more focused on the stock market and real estate markets these days, Giustra says his view on gold remains unchanged. Governments are still running deficits, debt is still out of control, and he does not believe we will see a stronger economy when the Federal Reserve ends its bond buying program at the end of October, as confirmed by Janet Yellen, the Fed Chair. (This is when the crap hits the fan).
Some experts and the government would have us believe that the U.S. economy is recovering, and the world is in much better shape financially than it was a decade ago when gold was shining brightly, but actually things have not improved. In fact, I can think of many examples of how it has actually worsened. (How about $2 Trillion?) Click here.
So be patient. There is still sound reason to hold on to your gold, and to continue to add to your allocation in precious metals, both gold and silver. Evidence suggests that no real economic recovery is taking place, and that our economy is actually on temporary life support! In my opinion, massive stimulus is a bandaid that is coming unglued, and the significant growth in productivity (GDP) required to signal true recovery is not evident.
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