Investing in Certified Gold Coins – The ideal gold investment for long term stability and growth potential.
Posted by Adam King on November 10, 2010
November 10, 2010 – We all know that ‘buy high and sell low’ would be a ridiculous investment strategy, but that is precisely the prospect for retirement portfolios that aren’t fortified with investments in certified gold. Brett Arends of the Wall Street Journal recently performed an analysis of the long term growth potential of stocks and bonds and concluded that we are “hurtling towards a retirement disaster.”
The problem, Mr. Arends says, is that the current market PE ratio is well above the long term average, a point of equilibrium that represents fair value. In a free market stock returns cycle around that point, much like room temperature cycles around the setting of the thermostat. When the temperature rises to a certain level the heat is turns off and the room cools. Once the temperature falls to some point below the setting, heat is restored and the cycle repeats. Today’s PE of around 22, compared to an average of 16, is clearly near the peak of the cycle and strongly implies a long period of decline is in store before growth can resume.
Coupled with that pessimistic indication of the growth potential of traditional assets is the continued weakening of the dollar resulting from the current round of stimulus measures. Together these create the perfect climate for strong growth in certified gold investments.
Investing in certified gold coins is particularly appealing in times such as these. Instability in global currencies has spawned wild speculation in derivatives, resulting in volatile daily prices that poorly represent the true value of commodities. However, that volatility has only a muted effect on certified gold coin prices, making them the ideal gold investment for long term stability and growth potential.
Stewart Lawson
Senior Staff Writer – Certified Gold Exchange
Categories:
US Gold Market