So you have decided to go ahead and make the jump, and finally invest in some precious metals. Investing in gold or silver, or even platinum for that matter is not the same as investing in stocks. How do you decide what type of investment you want to purchase? Here are a few options to help you decide.
The first question you have to ask yourself is are going to invest for the long-term, or are you more of a short-term trader? There is a huge difference, and the way you approach this will determine your actions: either a fundamental approach, or a technical analysis approach. Know the risks going into both, and you will be ahead of the game.
So first of all, do you know how much capital you have to invest, or how much you are comfortable in taking a risk with? Once you figure that out, get a serious plan together and do the following:
1. Find out your outlook – bearish, bullish, or neutral?
2. What specific asset will you focus on – stocks, options, futures, commodities only?
3. When will you enter a trade – figure out what technical indicators you will look for.
4. How long will stick to your position – set a price when you need to get out, either to stop a loss or take your profits.
One of the best ways to get familiar with a particular trading strategy is to observe it for awhile, take some time to learn the ups and downs. This way you get a feel for what is typical, how far up or down a specific trend may take your stock or commodity. Try to focus on one strategy at a time, rather than learn it all at once. Know your numbers inside and out, research is the key!
Trying your hand at gold stocks? Online brokerage accounts make it fast and easy these days, and they have ways to do all your research too. Most even have simulated trading that can help you get started, practicing with “play” money until you’re ready to go.
How about futures? If you have a future in futures, then be ready for some serious risk. Along with great risk, however, comes the greatest chances for profits. Just be sure to spread your risk out a bit, and hedge your risks as best you can.
Options are also one of the better ways to make profits and take advantage of volatility in the market. The best thing about options is you can limit your risk, and you can do options based on stocks, ETS’s or even futures contracts.
These are just a few of the ways to start out making money in precious metals, and with some practice and a little experience you will be able to figure out some more in no time. Do your research and hedge your trades, limit your losses and know when to cash in!
Are you tired of losing money in the stock market? Or do you just want to learn how to diversify your investments by adding gold or precious metals to the mix? Learn more by visiting us at online gold trading website.
Friday, April 9, 2010
Saturday, April 3, 2010
Gold - a brief history and why you should invest in it
Do you the know history of gold in this country? Yes, gold used to be used as the way of valuing the US dollar, called the “gold standard”. This had to be stopped in the 1970’s (1973 to be exact) because the value of the dollar was heading south, while the government pumped up the economy as usual. So gold went up in price, and from then on was able to compete with other currencies in the market including foreign currencies abroad. At a price of about $42 in 1973, the price of gold started it’s upward trend, never to look back.
By June of 1973, the price for an ounce of gold had sky-rocketed to $120, and soon other major countries lifted any restrictions on buying gold. By 1974 Japan had lifted restrictions on buying gold as well, and the climb continued. By 1975, gold futures started to be traded on COMEX and the free market traded it as any other commodity – demand drove the price to $180 already by then.
The late 1970’s saw gold swing pretty wildly up and down, eventually closing in over $240 before sinking below $200 again.
The year 1979 saw gold climb even higher, due mostly to the poor stock market performance (sound familiar?). Add to that the international tensions with Iran and the oil production uncertainties, gold was headed for over $420 by the fall of 1979 before dropping again. By 1980 though, the crash was inevitable.
The point of this little history lesson is to show how gold has the potential to “blow up” in price, even over longer periods of time. This usually happens in times of inflation, international crisis, and stock market uncertainty, among other things. To sum it up, gold started the 1970’s at around $35 and ended up at over $870 an ounce by December 1979. In extreme contrast, the Dow Jones average went from 809 points in January 1970 to about 839 in December of 1979, a whopping 3.5% rise over the decade! If this doesn’t convince you that gold can be a good investment, nothing will. Of course, like any investment you must be aware of the drivers that are working behind the scenes. However, with the uncertainty in the world right now, and lack of real value in the stock market, I firmly believe that gold is poised again for a steady rise.
Are you tired of losing money in the stock market? Or do you just want to learn how to diversify your investments by adding gold or precious metals to the mix? Learn more by visiting us at online gold trading website.
By June of 1973, the price for an ounce of gold had sky-rocketed to $120, and soon other major countries lifted any restrictions on buying gold. By 1974 Japan had lifted restrictions on buying gold as well, and the climb continued. By 1975, gold futures started to be traded on COMEX and the free market traded it as any other commodity – demand drove the price to $180 already by then.
The late 1970’s saw gold swing pretty wildly up and down, eventually closing in over $240 before sinking below $200 again.
The year 1979 saw gold climb even higher, due mostly to the poor stock market performance (sound familiar?). Add to that the international tensions with Iran and the oil production uncertainties, gold was headed for over $420 by the fall of 1979 before dropping again. By 1980 though, the crash was inevitable.
The point of this little history lesson is to show how gold has the potential to “blow up” in price, even over longer periods of time. This usually happens in times of inflation, international crisis, and stock market uncertainty, among other things. To sum it up, gold started the 1970’s at around $35 and ended up at over $870 an ounce by December 1979. In extreme contrast, the Dow Jones average went from 809 points in January 1970 to about 839 in December of 1979, a whopping 3.5% rise over the decade! If this doesn’t convince you that gold can be a good investment, nothing will. Of course, like any investment you must be aware of the drivers that are working behind the scenes. However, with the uncertainty in the world right now, and lack of real value in the stock market, I firmly believe that gold is poised again for a steady rise.
Are you tired of losing money in the stock market? Or do you just want to learn how to diversify your investments by adding gold or precious metals to the mix? Learn more by visiting us at online gold trading website.
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