Gold buying, investing in commodities.
Posted 09-11-2009 at 06:55 AM by Tim Franklin
If you spend any time in front of the television these days you have seen a commercial trying to sell you on buying gold, very often they attempt to sell you on the idea that the price of gold will go up and up, this is a common selling technique for many commodities.
Buy low Sell High...
In the world of investment and indeed for just about any type of retail atmosphere, that is the only way to make money, buying low and selling high, that is not only a good way to look at marketing but in some cases it is the only way to look at the very competitive marketing world that we have come to know over the recent months since Jan 20th of this year.
The one thing they always fail to tell you when investing in commodities, is that in almost every instance the time to invest in the commodity has already passed by the time you start seeing the commercials on TV.
This is because the time to invest in these types of commodities is before they are promoted in this way, so in fact, once you see these commercials playing on cable and TV then what is happening is that you are being sold on buying into a commodity that has already inflated to its desired payoff event.
Payoff Event...
So what is a payoff event you might ask?
It is much as you might imagine it is the time after which you have already invested in a commodity, that you sell in order to achieve the payoff or the investment amount that you have already purchased plus an additional amount that is the payoff amount.
As an example, let us take a good look at gold, which is selling around 900 to 950 as an average, the time to have bought this commodity would have been when gold was selling at 400 to 575, then you could sell now at 900 to 950, so in fact if you buy now you are probably going to loose value in your investment, the price could go up, but it more likely to go down than up because what you are seeing is a sell off of the commodity, and you are the buyer.
Can you imagine how much money you could be making right now if you had bought gold back in say 2005? The price range was from $427 to $485 if you had invested in gold back in 2005 now you would be selling that gold in order to achieve your payoff event.
Profiting by making the right buying decisions.
Again this is the way you want to do business, by making the right buying decisions, so do not be fooled by the TV advertisements claiming that gold will go up to $1300 or higher and if you listen to what they actually say, it is more like the price of gold "Could" go up in price, they never promise you that you will make money buying or selling gold.
The fact is that most of the time the price will actually go down, which could make buying gold a bad investment. Playing the market is often something that is done far in advance of these television commercials you see on TV and hear on the radio.
Buying gold, how do you know you will not get ripped off?
There are a number of ways to reduce the amount of risk in any given transaction.
Taking risk is you take when making a transaction, one of the most important is communication, having the ability to communicate with the seller, as well as the sellers reputation, never just take the word of the seller that " they have been in business for years" this is not an indication of a good seller, in fact it could be an indication that the seller is in fact a confidence artist.
Always do the research before you make a purchase, we did a search on google on fake gold and found websites that taught hucksters how to create convincing fake gold bars, that is scary and it is a sign of the times in which we find our selves, fake gold is a problem in many markets however, for the most part it is not difficult to find a good seller who is bonded, this is the real test, calling the bond so to speak is a term that is used in the event that a trade is found to be fraud, if the seller is not bonded then leave them alone.
Buy low Sell High...
In the world of investment and indeed for just about any type of retail atmosphere, that is the only way to make money, buying low and selling high, that is not only a good way to look at marketing but in some cases it is the only way to look at the very competitive marketing world that we have come to know over the recent months since Jan 20th of this year.
The one thing they always fail to tell you when investing in commodities, is that in almost every instance the time to invest in the commodity has already passed by the time you start seeing the commercials on TV.
This is because the time to invest in these types of commodities is before they are promoted in this way, so in fact, once you see these commercials playing on cable and TV then what is happening is that you are being sold on buying into a commodity that has already inflated to its desired payoff event.
Payoff Event...
So what is a payoff event you might ask?
It is much as you might imagine it is the time after which you have already invested in a commodity, that you sell in order to achieve the payoff or the investment amount that you have already purchased plus an additional amount that is the payoff amount.
As an example, let us take a good look at gold, which is selling around 900 to 950 as an average, the time to have bought this commodity would have been when gold was selling at 400 to 575, then you could sell now at 900 to 950, so in fact if you buy now you are probably going to loose value in your investment, the price could go up, but it more likely to go down than up because what you are seeing is a sell off of the commodity, and you are the buyer.
Can you imagine how much money you could be making right now if you had bought gold back in say 2005? The price range was from $427 to $485 if you had invested in gold back in 2005 now you would be selling that gold in order to achieve your payoff event.
Profiting by making the right buying decisions.
Again this is the way you want to do business, by making the right buying decisions, so do not be fooled by the TV advertisements claiming that gold will go up to $1300 or higher and if you listen to what they actually say, it is more like the price of gold "Could" go up in price, they never promise you that you will make money buying or selling gold.
The fact is that most of the time the price will actually go down, which could make buying gold a bad investment. Playing the market is often something that is done far in advance of these television commercials you see on TV and hear on the radio.
Buying gold, how do you know you will not get ripped off?
There are a number of ways to reduce the amount of risk in any given transaction.
Taking risk is you take when making a transaction, one of the most important is communication, having the ability to communicate with the seller, as well as the sellers reputation, never just take the word of the seller that " they have been in business for years" this is not an indication of a good seller, in fact it could be an indication that the seller is in fact a confidence artist.
Always do the research before you make a purchase, we did a search on google on fake gold and found websites that taught hucksters how to create convincing fake gold bars, that is scary and it is a sign of the times in which we find our selves, fake gold is a problem in many markets however, for the most part it is not difficult to find a good seller who is bonded, this is the real test, calling the bond so to speak is a term that is used in the event that a trade is found to be fraud, if the seller is not bonded then leave them alone.
Total Comments 0
