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Question from a reader: “I think I am too late to cash in on gold.  What do you think?”

I think that if you are looking for a short term quick turn around of money, you are right, this isn’t the sort of time for gold to have any drastic changes.  There is a retrenching and revisiting to paper currency and for the short term, barring any dramatic news events that might cause spikes-but you can’t factor that in comfortably as a profitable indicator-if anything, gold may be flat for a bit.

For the long haul, that is a different story.  Eventually we will come out of the deflationary situation we are in.  As a commodity, gold is scarce and even now it is tough to find people who will sell you the actual gold you can take possession of without some kind of cash premium on it.  The next question is when will we come out of it and go back to inflation.  I have no idea and despite what fnancial analysts may blog or quip - they don’t have a clue either.

There are gold bugs (people who are great believers in the power of gold as a currency and who lament the loss of gold backing currency-something I somewhat share at times) who feel that now more than ever you should be loading up on actual gold. 

Honestly, at this point, if you are looking to put a small portion of your portfolio, I am not inclined to put anything in gold mines.  I would look for actual gold or funds where you can actually know if there is gold there (for full disclosure-I own some shares of CEF).  If you opt to take ownership of actual gold, make sure whoever you are buying from you can trust.  I would research the heck out of them and try talking to actual people who have bought and taken delivery of the gold.  The next step is to find somewhere safe to store the gold.  Doghouses, treehouses and under the bed generally shouldn’t be your first choice.

I am not a financial advisor and I don’t even play one on television.  Due your own due diligence and remember that when you see the peaks and valleys of commodities like gold or oil, remember that people are reacting on what they think the future might bring.  Your tolerance for risk and how much money you have behind you should be factored in. 

For the immediate future, I will go on record restating that cash is king for the time being.  If any business opportunities present themselves, if you have cash, you can jump in.  A lot of profitable events have happened because people had the cash at the right place at the right time.  Remember that during economic downturns there are a lot of bargains and opportunities.

Also, in case you are interested, here is a $100,000 gold note that use to be used for transactions between banks.

If anybody has any of these lying around that they want to send me, I will be happy to take them off their hands.  For the good of the economy, of course.

Always open to questions and thanks for asking!

Practical Money Making-Surviving Recession, Layoffs, Credit Problems, Generating Passive Income Streams, Working Full Time or Part Time and Retirement

Kim Isaac Greenblatt

As of the writing of this article,  I owned shares in CEF.

Too Late For Gold?  Kim Isaac Greenblatt says it depends.

Tags: Business, cash, gold, Kim Isaac Greenblatt, profitable

This entry was posted on Saturday, November 8th, 2008 at 12:09 am and is filed under Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.