Ask Wealthy Joe: Invest in Gold?

invest in gold

Good morning!

So last week, I received a text from a friend asking me about investing in gold.

The ads are out there – you’ve seen them on TV, on websites, and perhaps have even received an email talking about the riches to be made investing in gold and other precious metals.

Using this calculator, let’s take a look at what you’d have today if you’d purchased $1000 in gold 19 years ago, on February 11, 2000:

Adjusted for inflation, your return would have been 181.566%.

Your $1000 investment would now be worth $2,815.66.

“Wow!  That’s nearly triple my investment!”

Yes.  It is.

Let’s now go to Stockchoker and see what that $1000 would be worth today had you purchased shares in various companies’ stock on the same day:

Home Depot (NYSE: HD): Up 343.99%, your $1000 would be worth $4439.91.

“OK…”

Wait, I’m not done!

Amazon (NASDAQ: AMZN): Your investment would be up 1988.86%…

…meaning your $1000 would now be worth $20,888.57.

Apple (NASDAQ: AAPL): Your investment would be up 4880.24%…

…your $1000 would now be worth $49,802.36.

There is simply no substitute for investing in the stock market when it comes to accumulating wealth!

If you’re thinking about investing in precious metals, do something that will be truly precious to your and your children’s future.  Open up a brokerage account and put that money into the stock of good companies today!  My short guide, below, walks you through everything you need to know.

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click the image of the book at left to be taken to its Amazon page.  (Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)

 

 

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Buy Low, Sell High? Not Necessarily.

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I’m sure most people are familiar with the phrase “buy low, sell high” when it comes to stocks.

This term is associated with buying so-called “value stocks”, which Investopedia defines as “securit(ies) trading at a lower price than what the company’s performance may otherwise indicate”.

However, the digital age has made a mockery of this tried-and-true saying.  It is now “buy high and sell higher”.

America Online, way back in the day, set the table for this new approach.  I remember watching AOL in the mid 90s trade at valuations that made it very difficult to buy using traditional metrics.  I’d be convinced that I’d missed the move, only to watch the stock double, and then double again.

Then along came Amazon (NASDAQ: AMZN) that completely broke the mode of traditional valuations, and became a short seller’s nightmare!  I know, because we traded Amazon when it went public, and proceeded to lose money on a daily basis as the stock went from $15 to $400 in a few months.  It eventually sold off when we had the dot com bubble, but it took no prisoners prior to that.

When a company has an opportunity in the trillions of dollars, you have to throw traditional valuations out the window.  Look at a stock like Berkshire Hathaway (NYSE: BRK.A).  Stewart Horejsi, an average retail investor who owned a welding company, started buying the stock in 1980 when it was between $300 and $500 a share.  Today the stock trades for over $300,000 a share – and Mr. Horejsi is #1339 on Forbes magazine’s billionaires list.

Don’t be afraid to buy high and sell higher!


My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click the image of each book to be taken to its Amazon page.  (Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)