Investing In Gold And Silver For Capital Preservation And Appreciation

Gold And Purchasing Power

Even with the ongoing financial chaos many investors are still aversive or simply do not contemplate the significance of diversifying and investing in gold and silver. Wealth protection and capital preservation seem to be strange concept to some individuals.


Even with the ongoing financial chaos many investors are still aversive or simply do not contemplate the significance of diversifying and investing in gold and silver. Wealth protection and capital preservation seem to be strange concept to some individuals. Older generation still believe that if you invest in the stock market for the long haul you will not only make money but also preserve your capital. Perhaps that was true prior to 2000 when in every decade the stocks delivered positive return. However, things have evolved in the past decade when the return for stocks was zero, negative in real terms. It appears that the fundamental nature of the markets has changed and long term now is considered milliseconds.
Another point to consider is that a dollar in 1913 when the Federal Reserve was established is today worth a meager cent. That signifies you lost 99% of your purchasing power and the stock returns had to be greater than 100% just to be in the same position as then. Now, lets examine if you had invested in Gold and Silver. The best analogy I have heard concerning the constant value of gold is that in 1913 with a once gold coin you could buy a mens suit, and today with that same coin you would be able to do the same.
The problem is that we romanticize with stock market returns made during the late 1990 until 2000 and the again until 2007. The problem is that these returns were aberrations and not normal. In pursuit of those returns many investors lost the majority of capital when the market returned to normal state. We have to comprehend that the world’s financial landscape has changed and wealth preservation has become the most important theme. Investing in gold and silver and in precious metals is the best alternative for that.
We as a nation are nostalgic and would like circumstances to remain as they once were. The sooner we awaken to the fact that investing in 2010 is not the same as it was in 1999, the more capital preservation will attain. Perhaps in a few years things will stabilize financially and the investing landscape will once again evolve. Meanwhile we must strive to safeguard our capital and play the game of wealth protection.