Gold's Bull: Reality or Myth?

Someone I know told me yesterday how one of her colleague laugh at her when she told her that gold price has risen around 30 percent a year. Now from my understanding this is a misinformation and strangely many people is still not aware of profit potential from gold, or silver, or palladium for that matter. Ladies and gentlemen, for the last 10 years, gold has not risen 30 percent every year. In fact, gold has risen around 400 percent in the last ten years or 40 percent per year! Wow. Is this real? If you look at the chart below, you can see the price of gold ten years ago at around USD280 and the latest price today hovering at almost USD1,400. 

Not only that, lately, it's been super rise for gold, up 55 percent since April 2009, and in recent weeks, it rose as high as 17 percent a week! I'm not sure if ASB, property, stocks, mutual trust or bond can give you that much.

So, you see, to those people who laugh when we suggest to them to invest in gold, especially in times of economic uncertainty, well, let them be. Time will tell, and I'm quite sure, after the stock, property, bond and monetary market bubble burst, gold and silver will be the only asset that is still standing.

Gold Member

Recently, a friend of mine introduced me to the idea of gold as an investment. I must confess, prior to that, I never would have thought of gold as an income generating asset. Yes, I know it is desirable, and people from all sorts of life have sought it as a measure of wealth since thousand of years ago. Well, I gave it some thought and after that I did some research on the subject matter, and I'm really impressed by what I read. 

Gold is not only used as a jewelery, it can also be traded like a commodity, and before the introduction of paper money (or FIAT money) gold is used as a currency and most importantly gold acts as a store of value, like a hedge fund against inflation, or like an insurance policy that can help you in the event of paper money collapsing or severe economic depression. It is widely predicted that when the stock market, mutual funds, bonds, forex market or even  property markets fails, it is always towards gold that people sought refuge to. Hence, gold's value as an investment and asset is very important. Some analyst suggest we save 10 - 15 percent of our income in gold, well I say we must at least save 25 percent of our income in gold, or silver for that matter because of its versatility and stability.

Gold's bull run started in 2001 and since then, the price of gold has quadrupled to almost USD1350 today. I can't remember any other types of investment that gives that much return. But, as in any other types of investment, gold has its shortfall as well. In short term, gold is exposed to market volatility like any other commodity. It can go up and down, so those who seek to make short term gain usually fails to do so without proper guidance, knowledge and experience. However, in medium and long term return, nothing beats gold, period.

For those who want to invest in physical gold,  the principle that should be used is Buy-Hold-Sell routine, it is as simple as that. The first part is straight forward. You buy gold. Usually in the form of gold coin, or gold bar. There are many types and brands of gold coins and bars out there. The second part however, requires you to plan ahead. In order to plan, you must set a target for yourself. At what price level you are willing to let go of your gold. Then you can calculate roughly how much profit you can make. The third part comes easily once you set your target of gold price appreciation, all you have to do is sit back, and wait for the price of gold met your target, and you can sell your gold afterwords. It is that simple.