Stocks vs. Gold: What to Buy in a Turbulent Market

Let me preface by stating that I am neither a financial analyst nor an investment advisor or financial planner. I'm also not clairvoyant and can't tell you whether stocks or gold will perform better, or how much better, in the next 3, 6, 12, or 24 months. Working a lifetime in the gold industry, however, I have do have some good points to be made.

Unlike stocks, gold will never be worthless. It has an intrinsic value that guarantees it will always be worth something. Stocks, on the other hand, are simply representations of partial ownership of a company. If the company ceases to exist due to bankruptcy or nationalization or any other variety of factors, then your stock is now worthless.

As this recession has demonstrated, even the best of blue chip stocks can suffer. If you had held a well-diversified stock portfolio owning blue chip stocks like AIG, Citibank, General Motors, Washington Mutual, and Circuit City, you’d be as bankrupt as they were. When companies go bankrupt, shareholders are taken along for the ride.

Gold, however, has intrinsic value since the beginning of time. It has industrial purposes as a catalyst for chemical production. It has wonderful properties as an electrical conductor making it useful for electronic components. And, of course, it has natural beauty. In short, as long as modern civilization exists, there will be always be someone wanting to buy gold, so you will always be able to sell it for something. I’m not saying you won’t lose money by investing in gold, just that it’s impossible to lose everything.

Like the stock market, the gold market fluctuates daily depending on a wide variety of factors affecting the world marketplace. Recently, as other markets such as stock and oil lost their footing and people began to look at more secure investments, investors worldwide turned to gold as a tangible asset to purchase.

Professional investors rely on market figures to determine when is the best time to buy and sell. Several websites offer 24-hour live feeds showing what markets are open and what gold is currently trading for in any particular time zone, making it easy for even novice investors to know what is going on in the world market. The recent trading in the mid $900’s per ounce is about as high as it has ever been in recent years. Although you would think that the high price of gold would translate into a major sell-off by investors, the opposite is actually true as investors have scrambled to buy more gold because of its stability in an otherwise fluctuating market.

With the demand of gold remaining high, the price of gold similarly stays high. So, interestingly enough, this market has become both a buyers and a sellers market with buyers scrambling to get as much gold as they can and sellers being able to cash in with high payouts!

Not surprisingly, individuals and not just investors have begun to realize that now is the best time to take advantage of the gold market and have begun to cash in on gold that they may have around the house. The result has been the blossoming of an entire cash for gold industry. Gold buyers have begun to market themselves to sellers knowing that times are tough and people may not know what their jewelry and gold pieces are worth. With that in mind, it is important that a seller understand what they have and what it is worth. Doing basic research on market rates and online gold buying companies will give you the knowledge you need to make sure that you get the most out of this market and are protected during your transaction.