Is Gold a Good Investment?

Confidence in traditional investment vehicles such pensions and equities has seen better days and many investors are still licking their wounds after the dotcom crash that has overshadowed investment markets since beginning of the decade.

On the build up towards the dotcom meltdown over-confidence was epidemic amongst investors as they scrambled to put all their assets into technology shares in the hope of a get rich quick solution. Any adviser worth his salt will tell you to never put all your eggs in to one basket, but the in intense fervour of the moment many didn’t listen…and many lost everything. These lessons have been learned and now investors are far more conscious of the need for low risk investments that bring solid growth in the long term in order to balance the higher risk assets in any portfolio.

Gold has been widely coveted throughout history for its mysterious properties: it’s beauty, it’s multitude of uses and of course its scarcity. But from the investors point of view the most magical property of this precious metal is its stable nature.

Gold is well known to retain its value well, no matter how uncertain the political and economic climate of the times – it’s a well known fact when the outlook is grim, gold investment increases. After the false gold rush that was the dot com boom, many investors are rediscovering gold and are using gold as the stabilising element of a balanced investment portfolio.

How does one go about investing?

Gold investment is not as difficult as you might imagine and no, it won’t entail a visit to your local river with a sieve.

Gold investment is offered by a number of financial institutions and precious metal dealers. You can buy shares in gold mining companies and this is usually the best way to make a paper-based investment in gold. The idea is that gold mining shares should roughly mirror the shifts in demand and price of gold bullion. However this isn’t always the case and the values of gold mining shares are also affected by shifts within the company and its management.

Share certificates are one thing but nothing can compare to that powerful rush you get when you hold your own chunk of gold. Buying physical gold is sure to be an exhilarating experience even for the seasoned investor and surely one that can never be forgotten. You can buy gold bullion is the form of bars or coins and which form to choose depends on the needs of the investor.

Gold bars are well suited to the large scale investor and buying large bars is usually more cost effective than buying smaller ones. The downside of owning large bars is that, when it comes to selling, they’re not very flexible and you can’t sell off a small amount of your gold at short notice.

Gold coins are an altogether more convenient form which is competitively priced, universally recognised and easy to resell. Old (numismatic) coins may also have additional value on top of their intrinsic gold value if they are rare or collectable.

If you do intend to invest in physical gold you must first consider the security implications – where will you keep it? You can of course have a safe fitted into you home, but this is costly and it doesn’t ensure total security. For this reason many investors take the less romantic route and choose to house their gold safely in the vaults of their favourite financial institution.

Source: ukinvestmentadvice.co.uk

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Is it possible to day trade for a living?

Considering the fact that many people have earned well into the millions of dollars from day trading, it would be safe to say that it is definitely possible to earn huge income from day trading. But, it is also important to note that day trading is for the serious investor.

This is not an easy process and it takes a great deal of work to succeed at this. This work entails performing a great deal of research across the entire stock market spectrum. This is a critical point because day trading decisions should rarely be based on looking at a small fraction of the market.

Stock trading involves picking a stock that is currently at a low price per share and then selling it when it increases in value. The time frame for this strategy is essentially completely open. That is, you can purchase the stock and hold it for a few years before selling it. However, with day trading, you would perform your sales in a much more rapid manner. In some instances, you would buy and sell the stock in the same day.

If you invest a great deal of money and earn a small profit on it, the profit will be quantified by the high amount of the initial investment. For example, investing $10,000 in a stock in the morning and selling at the close of the day for $10,300 is a nice profit for one day’s work: $300. Of course, the possibility to earn more is there but so is the potential to lose a great deal of money. Again, day trading is a complex and difficult process. That is why a clear understanding of what it is one is investing in is critical.

This is why it is important to have access to an excellent day trading software or platform that can help deliver expansive statistics on the market. From this information, one can make a much more well informed decision. This, in turn, will add to the potential to succeed with your trades. Clearly, if you want to engage in day trading for a living you will need to make profits on the bulk of your trades. You simply would not be able to do this for a living if you were losing money on the bulk of your trades. Once again, this is why it is necessary to have a solid software program that can help you make better informed and, hopefully, more successful trades.

A Penny Stock Prophet would be one of the better programs to work with. Such a program will launch an expansive technical analysis of the market and present that information. No, it does not make prediction or pretend to be a virtual stock market guru. Instead, it is a logical device designed to help promote successful day trading decisions. While this may seem like a simple goal on the surface, it is the primary means in which many day traders are able to be successful in their venture.

Are you tired of scraping by at your day job? Why not get into the stock trading and make some money the easy way… with the guidance of artificial intelligence! Check out Penny Stock Prophet completely risk free for 60 days at http://www.Penny-Stocks-Prophet.com

Peter Skotnicky

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Chinese Investments in U.S.

(From AFP): “WASHINGTON (AFP) – China consolidated its position as the top creditor to the United States, with 739.6 billion dollars in US Treasury bond holdings as of late January, US government data showed.

The US Treasury Department released the monthly figure at a sensitive time, less than a week after Chinese Premier Wen Jiabao expressed concern about the fate of Chinese investments in the United States.

It marked growth from 727.4 billion dollars of Chinese-held Treasury bonds at the end of December and was up from the 492.6 billion dollars China held in January 2008, according to the Treasury statistics.

While that year-on-year figure represents a sharp increase, much of it was down to big rises in September and October.

China has been the biggest holder of US Treasury bonds since September last year, when it overtook Japan for the first time ever, according to US data.

However, it issued its most high-level note of alarm yet last Friday when Wen admitted to being worried about China’s massive investments in US debt.

“We have lent huge amounts of money to the United States. Of course we are concerned about the safety of our assets,” he told a press conference here.

US President Barack Obama later responded with an assurance that “not just the Chinese government, but every investor can have absolute confidence in the soundness of investments in the United States.”

Lawrence Summers, director of the White House’s National Economic Council, denied Sunday that US Treasury bonds might lose their “AAA” rating from credit agencies because of the economic crisis.”

So before discussing this further here is a look at a NY Times interactive graphic depicting the Government’s various expenditures and commitments as part of the bailouts, company rescues, stimulus plans, etc. The upshot: the government has spent $2.2 trillion and has made commitments in excess of $9 trillion, an amount that’s roughly 64% of 2008’s GDP.

Making matters worse, the NY Times tally of the money spent on bailouts dates back to February 4 of this year, meaning that it predates the finalization of the stimulus bill, AIG needing more money, the housing rescue plan, etc. In other words things are probably worse than this graphic indicates in terms of total expenditures and commitments.

As a result it stands to reason that our nation is going to have sell significantly more debt over the coming months, which will only increase some of the concerns our creditors have over the stability of their investments.

Consider this: even if China’s YoY increase in U.S. debt investments increases at barely 1/2 the rate it did in ‘08, they’d still have holdings of nearly $1 trillion by the end of this year. Needless to say we’re on a path that’s simply unsustainable, and something is going to have to give unless we start decreasing our debt levels in the near future. Now I’m not saying that we’ll lose our Triple A debt rating, or that China will start refusing to buy our debt, but to think that we can keep borrowing like this and not suffer any consequences is patently fatuous.

Sources:

AFP: “China cements role as top creditor to US: Treasury”

The NY Times: “Adding Up the Government’s Total Bailout Tab”

The Bureau of Economic Analysis:” Gross Domestic Product: Fourth Quarter 2008 (Preliminary)”

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