In 2008, many stock market investors lost their shirts as stock prices went down and down. Fortunately, however, I was not one of them because I had placed my money in gold stocks. Back in 2005, my broker had advised me to buy several stocks that he strongly recommended but I had told him, “No, I want to buy gold.” I swear, my broker almost laughed at such unheard-of foolishness on my part. But he, to his credit, did manage to humor me and dug up some cheap gold stocks in Canada for me to buy.
So who got the last laugh? It was me. My “cheap gold stocks” paid off at a fabulous rate. And my broker’s stocks? Not so much. In fact, by 2009 I think that he wished that he had taken my advice instead of his own.
But I was lucky. Or smart. Or whatever. I knew that the stock-market bubble that had gone on for so long couldn’t last very much longer. But with gold, you always have a sure thing.
Something I read in one of those gold stock newsletters — not one that was involved in the “gold stock newsletters” scam but a legitimate one — featured an article that has stuck in my mind. It read, “No matter how expensive gold gets, it is always a good buy. Why? Because it never loses its comparative value. Even if gold should sink all the way back to $36 an ounce, its value will always remain constant. This means that the buying-power of gold never changes. It is always good — even if the buying power of the dollar sinks down to almost nothing. During a period of depression or inflation, you will still be able to buy things with gold.” And I’ve always kept that in mind.