gold rush

Feb 11 2009 9:45AM

Gold Rush

Investors are beginning to flock to gold. Knowledge of the markets will optimize returns.

In the aftermath of the third financial crisis in a dozen years, many investors are looking for alternatives to the traditional investments of blue chip stocks, bonds and mutual funds. Gold, as one of the few investment classes that has increased in value over the past year, is attracting a great deal of interest.

The gold market is more complex than many people appreciate. A little understanding of the market and the many alternatives available within the gold universe will help investors to position themselves to maximize returns.

Too many investors are drawn to the gold market by predictions of huge gains in the gold price just around the corner. In the late 1970’s, the gold price did soar, making fortunes for those who were properly positioned. From a low of $100 in 1976, gold rose sharply to surpass $850 in January 1980.

It seems inevitable that at some time in the not too distant future, the gold price will again take off, as it did three decades ago. However, it is not certain when that will happen. An equally likely scenario is for gold to continue to notch steadily higher, as it has for the past eight years. Therefore, investors should position themselves for an eventual rise in the gold price – but, do it in a way that has your money working for you in the meantime.