How to Make Money Buying Gold

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Make money buying gold by carefully monitoring cycles of inflation and deflation in the gold market. Invest in mutual funds that work with gold commodities using help from an investment consultant in this free video on investment.

Part of the Video Series: Personal Finance & Money Management
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Video Transcript

I'm Roger Groh. We're here today to talk about how you can make money by buying gold, or for that matter, silver or other metals. Traditionally metals like that have been hedges against inflation. So you have to time these purchases a little bit and you have to buy them when you think that inflation is going to be going up and up and up and up. And when it looks like there's no end in site and it looks like inflation is going to go on and on and on forever and ever and ever, that's when you have to sell them. These are very volatile, they're cyclical and you need to get in and out. Now that might be a 5 year period between the bottom and the top. It's probably not one day so you don't have to worry about it day after day but just be very cognizant of where you are in that cycle. In today's environment, well all we read is about real estate prices declining. The value of your home may have gone done, clearly the value of your stock portfolio has gone down, cars are cheaper, computers are cheaper, prices overall have gone down tremendously during the last year. Well that's deflation and not inflation and as a result of the lack of inflation, the price of most metals have come down. If you think that deflation is going to continue, you don't want to go towards gold right now. You can watch the paper and once DE turns to inflation, then you can be a buyer in gold. Now how can you do that? Well there are plenty of mutual funds that you can buy which invest in gold or specific companies that you can buy which are gold, in the gold business. Many of them have no debt and they're a pure play on the price of the underlining commodity meaning if the price of gold moves up, the price of their stocks will move up. But like I said, it's a little bit early to begin to do that. You can also use electronically traded funds which are sort of mutual funds but they trade like stock but they do is to give you diversification instead of just owning one company in effect you own pieces of 20 or 30 or 50 or 100 so that you're not picking which companies are going to survive. And if you don't know the gold business, that might be the best way to go. So that's a little bit about gold, when you buy them, during inflationary periods, not now, might be a year from now. Once your own house bottoms out in terms of price and people begin to go back to work and inflation danger begins to pickup, that's when gold will be very interesting again. I'm Roger Groh.

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