Is Gold the Answer?

I just read the BBC article about the rise in sales numbers of Austrian Gold Coins, which made me think about world wide panic about what happens to the financial markets.

First I'm quite surprised that the Europeans are so quick to move on this. People pull their money out of the financial markets, which will make it even harder for the market to recover.

If you loose money, you will either loose it in your stocks or in the higher prices if the economy collapsed due to the fact that people are pulling out their money out of the stock market.

I'm pretty conservative when it comes to investing (right now especially because I don't have any extra money around). My Dad used to be an investor and he taught me, that you have to think about the long term security, never about the short term gains. He always highly diversified and invested in things that had a good ROI, but always over a pretty long period of time.

But it paid off for him. He didn't loose any money in the Asian stock crisis and he took all his money out of the stock market earlier this year with a profit. He said it doesn't look that good right now.

He went completely conservative with various savings accounts with various interest rates. He told me: "I'm too old to gamble. I don't want to worry about it anymore."

Good for him. He is now pretty calm, he didn't loose a single Euro.

Stocks have become so incorporated in daily life, that most of us don't see anymore, that there is no guarantee that they make money. We don't see the risk of us loosing money anymore. Especially when we are in a bull market, even if it was just a bubble.

People are now complaining about that they didn't know - well that's what investing is. My Dad always said: "You can watch the markets everyday, but there is still a lot of unknown things happening." He told me to see the market not in shares, but in economies of countries - who is investing, who is innovating, who is risky, who is playing it safe.

We all give the responsibilities to the guys on Wall Street, the hedge funds and the billionaires, but forget that it was our money and our decision to invest it in one or other ways.

Wall Street isn't more to blame than the common folks. Everybody let it happen.

And the fact that you don't know what happens to your own money, is just a sign that you don't value it until you loose it.

Gold is not the answer, but it is for sure less volatile than many stocks in this world. Long term wise you probably won't see much of a reduction in value, as you would also probably not see a lot of reduction in value with many stocks.

Whatever you choose, here is my fear. The common people are now buying gold in bulk and are pulling out their money out of the stock market, which will make the stock prices go way down. If governments have invested in the market, they will loose money and will maybe not be able to pay their daily activities. So they might also consider buying off part of their Gold reserve, which will make the Gold market plummet. So what good does this do then to you.

Everybody wants to get away from the problem as far as possible, but it looks like that the further people go away, the more disastrous the outcome of the economy will be.

"Don't play poker, if you freak out easily"

The Alien Patriot