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In January 2000, a friend of mine purchased a new house in the hot California housing market for $650,000. Today, that house is valued at $1,200,000. In January 2000, I purchased gold for $280/ounce. Today that gold is worth $519/ounce. The return on the house over 5 years is 84%, and the return on the gold over the same period is 85%, almost the same. I could be wrong, but I do believe that California, especially Southern California, had the hottest housing market in the US during this time frame. Almost everyone's house value increased by 50% or more. Stocks on the other hand, with the Dow well above 11,000, (around 11,700) would almost certainly have resulted in a loss over the same period. It has not been near 11,700 since January of 2000. So, both gold, and housing returned about the same rate during the past 5 years. That would make gold a hot investment, since volumes have been written about the hot real estate market, and ever increasing home prices. Gold is like Republicans, is not trendy, is not liked by the press, but it is always there, shining brightly, getting more valuable, watching the more trendy investments make the headlines of the business section and the nightly news (which I refer to as the liberal left nightly news). So I quietly pocket my return and listen to those brag about their lofty real estate values, and add the lament, "well, I guess I should have put money into real estate, huh?" And their reply comes, "well you missed the boat, the market has peaked". This may be true for real estate, but it is not true for gold. Given the fact that supplies are to remain tight for the next 5 years, and if a few national treasuries begin to purchase gold again (as they have hinted at doing), gold will stay above $500/oz. for a while, reaching new heights, possibly even breaking the $1,000/ounce price in the next 5 years. It is too soon to say this, but the president of the largest US Gold company (Newmont) has recently made this statement. So, to all of those who have said, "you put money into gold? What a lousy investment", I will say, "no, I doubled my money in gold, and that was one of my conservative investments." Charles Kubach Mine-Engineer.Com Return To Gold Information Page |
