any good courses for beginners?, page-3

Hi Unconscious,

I agree with all that MM says and would also suggest you go slowly and with maximum caution.

However, if you compare the DJA or our ASX fixed interest or the now rapidly price falling real estate market as against the gold performance over the last ten years with respect I would say there are a lot worse things you could do than becoming a gold enthusiast. Gold bugs are what people that have totally missed the train call gold investors.

The trick is to hold some physical gold rather than gold explorers or junior producers as the recent few days have proved. Compare the gold price performance over the last few days (and ten years also)as against the shares in just about all sectors and in all markets.

http://www.kitco.com/charts/popup/au3650nyb.html

The hard part for many to understand is there are times to go all out and make as much money as you can. That part is easy just buy shares at their lowest point on the market and sell them again once they have doubled.

However, there are other times when it becomes just as important to preserve ones hard earned capital and again with respect I would suggest this is where gold and to a similar extent silver come into their own.

Ben Bernanke and many others its not fair to just point to him are busy flooding the markets with printed money out of thin air and I believe this will eventually lead to inflation at some point in the future.

Some would argue that since the introduction of the Federal Reserve (by the way not Federal in fact Private and there are no reserves) back in 1913 the US dollar has lost 96% of its purchasing power.

Here is a clear example of how precious metal can preserve ones purchasing power. We can use the information in the USA fuel and silver price charts below.

In 1950 say the paper US dollar and the one ounce silver dollar traded side by side. One ounce of silver in bullion form was also worth around one dollar. Take the top end 1950 fuel price and for ease of calculation call it US $0.25 per gallon or four gallons for one dollar.

Today or very shortly you will need US$4.00 to buy a gallon of gas or petrol as we know it.

However, with a one ounce pure silver coin or bullion you can convert that back to paper dollars at around $34.00 and if you so wish purchase eight and a half gallons of fuel.

The point I wanted to make was that of preserving ones purchasing power; however, with these very real numbers you can see that owning silver over time has in fact improved the owners monetary value. Certainly his purchasing power.




Decade Average Price(per gallon)
1950 - 1959 $0.19 to $0.26
1960 - 1969 $0.31 to $0.35
1970 - 1979 $0.36 to a little less than $1
1980 - 1989 About $1
1990 - 1999 About $1.10
2000 - 2009 $1.65 to $4

The chart above from this full article if you are interested:

http://www.buzzle.com/articles/gas-prices-history.html

http://www.silver-coin-values.com/silver-charts.html

Scroll down to:
Silver Price History: 1792 to 1999

Now Mr. Unconscious with a name like that I assume you are a young guy maybe early twenties that being the case you have many years to take risks and make your fortune investing in the stock market and I commend you for seeking help on sites like these.

There are some very bright people on these sites and MM gives solid advice.

Personally I am at the other end of the time scale and am just moving into the world of fly fishing, long lunches, and the next size up trousers, so for me preservation of wealth is important. I bought my first ounce of gold some ten years back for under US $300.00 I still have it and I sleep easy at night.

The very best of luck with your ongoing market education keep asking questions and take very good care of your over taxed hard earned fiscal powder keep it dry and risk it caringly.

Sorry this is a little long but I feel the main point is worth making. Once you make money preservation should always be foremost in your mind.


Cheers: Andy