Today’s a great time to own gold. That’s because gold typically thrives during times of financial uncertainty. As you may have heard, gold prices recently set a new record when they passed $1,200 per ounce! Before you get bitten by the so-called “gold bug,” there are a few things you need to consider, according to MSNBC:
- Gold prices probably won’t be this high forever. In fact, experts say the last time prices rose this fast was during the recession of the 1970s, when prices basically doubled each year, four years in a row! Then, they suddenly plummeted, and remained in a slump for 20 years. In other words: Some experts warn that gold prices might be the next big financial “bubble” that’s about to burst - much like the housing bubble that caused the recent recession.
- Another thing you need to know about gold: It may not provide the “safety net” you think it will. Many people say they feel safer owning gold, because they want to have something valuable to exchange in case the financial system collapses completely. However, that kind of thinking is flawed, according to gold expert Tom Pawlicki. He says if the economy gets that bad, there won’t be any stores left for people to buy and trade thing, and even if there are, nobody’s going to “make change” for your valuable gold coins.
- Buying gold is like buying a new car. Whether you buy gold in the form of bars, coins, or even paper stocks, you’re going to have to pay a commission of at least 5% of the market price. You’ll also pay fees to have gold delivered to your home, or stored in a vault. In other words: The moment you finally get gold in your hand, it’ll be like driving a new car off the lot – it loses value.
- SELLING gold isn’t any easier. As we’ve talked about before, gold parties are all the rage right now. That’s where you sell your old gold jewelry for instant cash. The problem is that gold parties never pay top dollar for your valuables. Experts say you can generally make more money selling your gold directly to a private broker, but only after you spend lots of time shopping around for the best price.