in laws bought krugerands in mid 80's above $800,had to wait 20 yr's for the gold to get back up to that price
Interesting isn't it. Every asset allocation recommendation I read for 2009 now lists gold with a minimum of 5%, better 10%, ideally 20+%. "Every portfolio MUST have gold", "get lots of physical gold in your bank deposit box", "everything looks bullish for gold" they say... Gold has become the most pumped investment for 2009. Sounds like snakeoil to me. I'll buy gold for my kids when it either hits $400 and/or nobody recommends it as a quasi risk-free investment.
The fact everyone is talking up gold is a sign. However, it also means its probably going to run a bit. There is a great analyisis online, i am going to dig it up. Which shows that gold is a terrible investment over time. And its a poor inflation hedge versus other items. Its only good when you buy and sell at the right time. When I find it I will post in a seperate thread. I think 5%-10% gold is more than enough. If you anticipate a currency collapse, like Argetina then the better hedge it to get your money out of that currency period and out of that country. Also, there is enormous supply because of the slack demand from heavy gold consuming countries like India. But in times like this its the 3G'conomics -Gold, Guns, and God!
Everyone being whom? Where do all the gold bashers get the idea that "everyone" is in gold? Not many people are. Go check the lowest denominator, the jewelers. They are asking everyone & anyone to sell their gold to them.
This is an old saw; if you can read a chart and manage your purchases by the cycles you'll be fine. If you're emotionally buying coins and bullion retail, get a snorkel. If your pyramiding contracts and buying gold/silver/platinum/paladium stocks on the way down because the newsletter experts say the dollar is dead and the world is about to end----get a grip and get your ass back on track.
First, gold has done pretty well over the past 80 years, rising from $32/oz to the mid 800s. Then consider this was during a period of an expanding economy for an economic superpower. Of course stocks did well for this period, and there we few fixed income defaults, so other investments may have matched or slightly surpassed gold. Gold does much better comparatively in times when the fortunes of a nation fall instead of rise. Ask the Argentines or the citizens of Imperial Germany.