When gold falls $100 an ounce, do you react like a wealthy man or a poor man?
The difference between the two reactions is huge.
If you picked the right one, chances are good you’ll make money as a long-term investor…
In April 2017, I write an article urge people to own gold.
The price was about $1260 per ounce.
Here is the link to the article.
Most people buy gold and hope they’ll make a fortune on it.
They listen to “doom and gloom” gurus who claim gold prices are about to explode.
So when gold decreases in value, the average precious metals owner stresses out. His “big trade” isn’t working.
I own gold… and I urge you to do the same.
But I take an unusual approach to my holdings.
I look at gold the way a homeowner looks at his insurance policy.
A homeowner buys insurance against disaster and hopes disaster never comes. He hopes he never has to cash in his policy.
Similarly, I hope I never make money on my gold.
If I don’t make money on my gold, that means economies and markets are behaving relatively normally.
It means I’m making money on my regular investments, like stocks, bonds, and real estate.
If the world economy goes haywire and gold skyrockets to $5,000 an ounce, sure, I’ll make money on my gold… but I’m sure to have a lot of problems along with those profits.
I’d rather make money in stocks, bonds, and real estate.
I’d rather live in a world where the U.S. dollar isn’t plunging in value every month.
Think rationally. Think of gold as insurance.
I like to keep 4%-8% of my investable assets in gold as hedge.
Gold is great for this purpose.
I keep the rest in stocks, cash, and real estate.
When gold plunge in value, you do not need to worry.
If you don’t own these sorts of hedges yet, I encourage you to buy some… just like a homeowner buys insurance… or just like you’d buckle your seatbelt before driving your car.
Take the wealthy investor’s approach, buy gold… and hope the time never comes for you to have to “cash in” the gains.