By now you are more than familiar with my friend and his struggles to get into the Gold trading market in hopes of getting rich quick. While this might not be a bad idea, it's just not how I am built. Don't get me wrong, I will take advantage of a situation when I can. This by no means I am out to cheat anyone, what I do mean is that while stock prices are falling I will continue to buy because of the low prices. Remember that old adage, "buy low and sell high" well that's how I roll.
Unfortunately, my friend is still so enamored with getting in on the new Gold Rush that he is letting opportunity pass him by. He is not seeing the forest for the trees. Right now, his biggest complaint is that stock prices are down and his mutual funds are dropping in value and he needs to get into gold because it is rising.
I asked him if he was living off the return on the stocks or mutual funds.
He responded with a "No."
So why is he worried about the falling stock prices and the need to get in on the rising gold commodity? He is worried, because, the media is making him worry. They are all about doom and gloom...that is what sells newspapers. When was the last time a 3rd grader winning a local spelling bee made the front page of a national newspaper? Hmmm, maybe never...I may be wrong but I doubt it.
Lately, it has been all doom and gloom: who is sleeping with who, who embezzled money, who committed murder, and which celebrity is off to rehab, again. As well, almost daily on the front cover of any newspaper are stories about rising oil prices, falling stock prices, gold going through the roof and people losing their homes.
With headlines like that it is understandable for my friend to fall for all the bunk. He may never come to his senses and realize that it is best to stay the course, accumulate, and, above all, NOT panic. Now is the time for him to increase his mutual fund and stock holdings. Now is the time to scrape up some cash and buy some real estate, it doesn't have to be a house but it certainly should be some dirt. Dirt? Dirt as in earth, an acre, a farm, anything that is more dirt than development.
Why? Just like gold, there is only a certain amount of surface space on the planet. So, why not own a little piece of it? It makes good sense to own land. It can be used as collateral in future projects. Unlike gold, it is a little more difficult to steal. Carry your gold in a brown canvas bag, pretty soon a modern day Robin Hood will be helping himself to your gold. While, Robin will certainly rupture a disc if he plans on taking all your land, one tractor load at a time.
Right now, real estate is at a good place for investors. There are a lot of foreclosed properties and more on the way to choose from. While I understand that it may not appear as a good thing to profit from other people's misery, remember you are not the one who forced those people to get themselves into a situation they knew fully well they were not prepared to handle. If you can relieve a bank from holding on to a worthless property (it is worthless for as long as they hold it).
Trust me it is a liability for the bank to hold property, it only becomes an asset when they get rid of it. Just like the homeowner, no matter how you slice it, until the mortgage is paid off that castle is a liability.
I am certainly not saying anything new. I am just saying that there are still plenty of people out there that run for cover the moment someone cries that the sky is falling. That's why it's worth repeating every once in a while. Especially in these near uncertain times. My friend has been warned.
Let's tag this with:
Dave Guerra, Gold, Asset, Liability, Real Estate, Economy, Stay The Course, Stocks, Mutual Funds
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