RE: bleak current financial outlook in the US, and the declining US$ and the record gold and silver prices
What would you do and why?
If you had money in the US property market would you leave it there and wait for the economy to start growing and hopefully reap the rewards of capital profits in 15 – 20 years time, or would it not be worth while to tranfer these profits back to Australia if the US$ continues to decline against the AU$.
Or would you consider taking the money out of the US now before the US$ declines further against the AU$ and invest in gold and silver bullion?
Personally, I would invest where I believe my returns will be the greatest, and right now I believe Silver is the biggest investment of this decade
Not only is it a monetary metal, but it is also an industrial metal with strong supply/demand fundamentals:
- Monetary Metal: When people lose faith in fiat currency because of excessive currency printing, they always flock back to gold/silver, which has been money for thousands of years
- Industrial Metal: Because of its unique properties, Silver is used in all sorts of appliances e.g. electronics, mirrors, photography
- Demand: Demand for Silver is likely to increase. Not only because of an increase in demand for consumer electronics (e.g. cell phones, computers) due to the rise of middle class in China and India, but also because of emerging uses of Silver such as in Water Purification, and in Solar energy
- Supply: Stockpiles of Silver are at an all time low, and are being consumed rapidly as the information age progresses. It is estimated that there is less than 10 years supply and there is not much new supply being discovered
Hi Veronique.
Kong makes some very good points for investing into precious metal(s) such as silver. However, were your US IP bought for a quick buck or to obtain Capital Growth over time? Why did you buy property in the US in the first place? Property is rarely the superfast highway to riches but ponder on this: the US economy will recover as it has always historically done. Even if you don't experience much in the way of capital growth in your US IP's, what kind of profit could you make if our Aussie doller starts sliding backwards against the greenback. Example US IP worth $50,000 in 2011 and you bought it for $50,000 AU because of the parity in our 2 currencies. Now it's 2016, our dollar is worth 50cents to every US dollar and you sell your US IP for the same price you paid for it 5 years earlier – $50,000 US. Now, convert that into Aussie dollars and you now have $100,000AU. Interesting huh?I think they're two different assets entirely, and it shouldn't neccessarily be one or the other. Keeping a diverse portfolio is always a wise idea, to hedge against market swings etc.
I have to agree with what Anthony is saying above, that both:
a) The U.S. market usually always recovers, although it might not reach the levels we were at in 06/07 for a long time
b) The AUD is very strong right now against the USDAlso, keep in mind that with a strong rental property you can have your money back in 6-7 years thru rental – regardless of where the market is headed. I'm no expert when it comes to gold, and yes I'm biased – but there's my 2 cents:-)
The next major upleg for precious metals is likely to commence within the next 2 months, and this time it could be quite explosive and take many by surprise. I'd encourage all prudent investors to do some research and to consider investing in precious metals such as Silver while they are still undervalued.
As with all investments, it is recommended that you conduct your own research (rather than blindly following the advice of others), in order to be able to make an informed decision based on your own personal circumstances
Some resources I would recommend to gain a fundamental understanding of investing in Gold and Silver are:
- Guide to Investing in Gold and Silver – Michael Maloney
- The Collapse of the Dollar, and How you can Profit from it – James Turk & John Rubino
- http://goldsilver.com/video/why-gold-and-silver-full-movie-mike-maloney-tells-all/
- http://www.youtube.com/watch?v=-IiarVvZguY
Hope that helps!
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