Today I want to talk about myths when it comes to buying precious metals and other hard assets.
(1) The 1st myth is that buying gold and silver is just scare tactic. And we see this quite a bit with, investment officers and personal finance gurus saying don’t buy it, someone is just trying to scare you, so you’ll buy it from them, and they’ll make money. Now, I’m sure there are people that do this, but the majority of people I see discussing the benefits tend to be honest, present solid economic data and don t persuade people to own what they can’t afford. The “experts” will say invest in stocks or bonds and not understand the benefits of precious metals.
(2) The second myth, which we see a lot of lately is around that is being said the dollar is so strong and can’t be overtaken. And this really a response by the establishment to more people waking up and learning the role of the US dollar in global trade and how more countries are beginning to look for other options. While many quickly dismiss the US losing its global reserve currency status, there’s a lot of reasons to start thinking what will happen down the road. The dollar is inversely correlated to gold and silver prices. Right now, the dollar is the world’s reserve currency, and more people are aware of the story of how it came to be so powerful. Overall, other countries are looking for other options and mainstream media is beginning to look into the story more and more.
(3) Third myth that is pushed is that gold and silver are not very liquid. The thing is in reality gold and silver are easy to sell and there is always a buyer for this asset. If I’ve got 1 ounce of gold and I go to sell it, I can move it quickly and get either spot price or slightly over. Financial professionals often though are going to push another asset, like T-bills, and not understand the role of precious metals. And while I don’t completely dismiss T-bills or think anything is wrong with having a portion of your portfolio in them, the fact is gold and silver are just a different type of asset to own.
(4) That owning any gold or silver is bad despite the fact it helps one diversify. Financial professionals preach diversification but when it comes to gold and silver, the rules don’t apply. They’ll state things like it pays no dividend or the stock market is a much better place for your money. But they fail to see it offers wealth outside the system and that precious metals are very unique in that they serve as money and insurance as well as preserve purchasing power.
