Is it Time to Buy Gold?
By Dr. Thomas Carr | June 4, 2015 |
My Grandfather was a very conservative investor. His investment capital was tied up in real estate, treasuries, the bluest of blue chip stocks, and gold. I remember well his argument for buying gold. “God only put so much of it in the ground,” he would say. “So it can only get more valuable.” For him, gold was the perennial answer to every financial problem. Inflation? Buy gold. Recession? Buy gold. A volatile stock market? Buy gold. A weak dollar? Buy gold.
Unfortunately, he didn’t live long enough to witness the great gold rally that began shortly after his death. From the $255/oz. spot price low of 2001, the price of gold (POG) rallied to an alltime high of $1,923 high of 2011. Over those 10 years gold averaged a whopping 65% ROI per year, far surpassing stocks and bonds combined. Silver nearly doubled that rate, of course, but it has never had quite the allure of the yellow metal. See the 10-year monthly chart below:
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