One of the temptations that most investors fall prey to is the temptation to check the value of their investment portfolio on a daily basis. When prices rise significantly, they feel great; when prices drop significantly, they feel like they made a bad decision. But looking at things in the short term is never a good way to think about investments. Every asset you invest in will have ups and downs. The important thing to think about is whether the overall value of your investments will increase in the long term. If that’s the case, then you can forget about short-term drops because the long-term value will still be there.
That’s as important for gold and silver as it is for any investment asset. Gold and silver aren’t immune from short-term price drops either, so investors shouldn’t get discouraged when they see the value of their portfolios declining in the short term. If anything, they should see falling prices as an opportunity to buy even more gold and silver.
If you look at the price of gold this year, it started the year by rising above $1300, but it’s since fallen about 10% from where it started the year. But that’s exactly the same pattern we saw in 2008. In 2008, gold peaked at just over $1000 early in the year, then plummeted nearly 30% by November. But a year later it had nearly doubled to over $1400, and a year after that it was nearly $1800.
Gold right now is trading at just under $1200, which is lower than all of the medium- and long-term moving averages. Both the 200- and 500-day moving averages are around $1290, while the 1000-day moving average is just over $1240. Once gold jumps back above those averages, the opportunity to buy gold this cheaply probably won’t be seen again.
With tariffs starting to go into effect, the ever-present threat of war, political turmoil in Washington, overvalued stocks, and a housing bubble that is as threatening as but more low-key than in 2008, there is a perfect storm of factors coming together that will send markets into a tailspin. Right now we’re experiencing the calm before the storm, which is the ideal time to take the necessary steps to protect your investment portfolio with gold and silver before it’s too late.
This article was originally posted on Goldco.
