18 replies to this topic

[smak786110]

How is investing in Gold... is it worth it ?
I am hearing people are minting cash from it..... but I dont understand why do the brokers give you a leverage of 1 to 100... Like if you put $1000, and they give u loan of $100,000 ... whats the advantage to them ?

[Philip]

Gold has real value while today's money is imaginary monopoly money which is worth the paper + inc + printing press overheads + transportation etc .. Which means that the value of a dollar bill is the same as a 100 dollar bill. And nowadays money is an imaginary # in you bank "account" .. Which is an imaginary # on a computer somewhere, which is controlled by some hidden individuals.

So in short: I believe investing in gold or anything with real lasting value is good idea. Rabina yekrimak

My guess is that after dajjal n sufyani r dead (may Allah destroy them fast) .. There will only be trade with real value .. And no more economic slavery and illusionary "money". Basically back to good old bartering give n take like in the days b4 banks took over the world. We seek refuge in Allah from all evil.

[Ali Huzaifa]

I am full time currency trader and i can tell u that right now GOLD is over valued,if u want to buy gold plese wait untill there is some correction,then u can jump in.

world economy is not doing well specially UK and US this is the reason for all this bullish in GOLD.

[Philip]

I heard somewhere a guy saying that the value of gold doesn't change. The value of money is going down ( which makes gold look like it went up )

[xstatik2]

smak786110, on 11 September 2011 - 04:29 AM, said:

How is investing in Gold... is it worth it ?
I am hearing people are minting cash from it..... but I dont understand why do the brokers give you a leverage of 1 to 100... Like if you put $1000, and they give u loan of $100,000 ... whats the advantage to them ?

This is what you would term as "Margin Trading" . Check the link which explains the concept of Margin Trading in Forex. -- http://www.investope...p#axzz1XghHX6vu

the $1000 - $100,000 is usually for Forex e.g. (GBP vs USD) and if you have bought GBP which gains a couple of pennies, then you have made a profit. Usually the margin amount helps u to make a "lot". Sometimes you make money on the difference and sometimes you don't.

Gold usually has a leverage of 1:200 and your buy order for $1,000 could get you good returns .... the down side of Margin Trading is that IT IS VERY VOLATILE and the risk v/s. return is very high.

Banks and financial institutions offer you a margin so that you may buy lots and everytime you make a buy or a sell, there is a commission called "spread" which is deducted from your account balance. The more you trade, the more the institutions earn on spreads therefore they are okay with virtually lending you $99,000 to make your trade.

PERSONAL RECOMMENDATION - Do not try to trade unless you have training and experience.

[Ya Aba 3abdillah]

A 70/30 silver/gold portfolio is definitely an excellent investment. And land/property too. Hold real non-monetary based liquidatable assets, not worthless paper or electronic numbers in a bank-account.

[titumir]

You are all wrong. The best investment would be in a company that provides some service to people and employs people, such as, for example, a housing company which owns flats and rents them out, or a company that makes clothes, or a company that makes bicycles. You would never have to worry then, because people are always going to need those. There is limited wealth in the world. I prefer to invest all my capital in actual companies which provide a positive service to the world, and not keep it locked up in the form of gold bars, or 1000 different currencies all changing every minute. This is one of the main points in my strategy to eliminate poverty from the world, when I become the ruler of the world (Insha Allah).

[Haji 2003]

titumir, on 12 September 2011 - 09:45 AM, said:

You are all wrong. The best investment would be in a company that provides some service to people and employs people, such as, for example, a housing company which owns flats and rents them out, or a company that makes clothes, or a company that makes bicycles. You would never have to worry then, because people are always going to need those.

Needing something and being able to pay for them are two quite different things.

xstatik2, on 11 September 2011 - 06:11 PM, said:

the $1000 - $100,000 is usually for Forex e.g. (GBP vs USD) and if you have bought GBP which gains a couple of pennies, then you have made a profit. Usually the margin amount helps u to make a "lot". Sometimes you make money on the difference and sometimes you don't.

If this thread ventures into forex trading on margin - then I am going to delete the offending posts. Licence to lose money for the majority of money and I am personally getting a lot of promotional material about courses etc. and someone somewhere is looking to make money off this and it isn't the mug punters opening trading accounts.

Ya Aba 3abdillah, on 11 September 2011 - 06:50 PM, said:

A 70/30 silver/gold portfolio is definitely an excellent investment. And land/property too. Hold real non-monetary based liquidatable assets, not worthless paper or electronic numbers in a bank-account.

Lester and I were talking about this a couple of years ago on this BB and I was confident in buying. At current prices I am not buying, just holding to be honest.

smak786110, on 11 September 2011 - 04:29 AM, said:

How is investing in Gold... is it worth it ?
I am hearing people are minting cash from it..... but I dont understand why do the brokers give you a leverage of 1 to 100... Like if you put $1000, and they give u loan of $100,000 ... whats the advantage to them ?

Be very very careful with margin.

Think of it like this, you may believe that gold (or any other investment) is undervalued and you think it will go up. Fine. You buy it and you hold. In the meantime if the price collapses, no problem, if you thought it was a sound investment you just carry on holding.

But

If you had bought on margin and the price fell dramatically, the broker would want you to put up more margin (your own money), if you could not do that, you lose the position. So you may have made the right call regarding the investment, but you lost because you got the timing wrong.

I have seen a lot of people lose a lot of money this way. Why try and be clever? My experience is that money making opportunities in the (equity) markets come along relatively frequently 1 - 2 times a year, so you can play it slow and build up capital in a way that involves much less risk.

Ya Aba 3abdillah, on 11 September 2011 - 06:50 PM, said:

A 70/30 silver/gold portfolio is definitely an excellent investment. And land/property too. Hold real non-monetary based liquidatable assets, not worthless paper or electronic numbers in a bank-account.

For me it is shares in oil exploring companies. I'll update the thread I started a few years ago sometime soon. Basically the thesis has been to invest in companies looking for oil in regions etc. that may be of interest to sovereign or large corporate buyers sometime in the near future.

Price of oil has held up well in recent years and my largest holding sells oil at a premium to both WTI and Brent. Am expecting a far eastern buyer for it within a year or so.

[Ya Aba 3abdillah]

Haji 2003, on 12 September 2011 - 10:48 AM, said:

For me it is shares in oil exploring companies. I'll update the thread I started a few years ago sometime soon. Basically the thesis has been to invest in companies looking for oil in regions etc. that may be of interest to sovereign or large corporate buyers sometime in the near future.

Ya, Oil commodities are good, though morally might need to be selective in which oil company you buy into, but a definite worthy investment is Gas (Gazprom maybe), and carbon storage companies (though again, you'd be supporting those trying to sell the world the carbon tax), uranium companies, and also rare-earth metals http://www.telegraph...-stand-off.html is worth looking into.

[Haji 2003]

Ya Aba 3abdillah, on 12 September 2011 - 01:54 PM, said:

Ya, Oil commodities are good, though morally might need to be selective in which oil company you buy into,

The only country I have had qualms about investing in is Kurdistan. But in that case my assessment has been that if the Kurds want to sell out to any johnny foreigner who comes calling - then the profits may as well go to a deserving Shia, such as myself.

Ya Aba 3abdillah, on 12 September 2011 - 01:54 PM, said:

and carbon storage companies (though again, you'd be supporting those trying to sell the world the carbon tax), uranium companies, and also rare-earth metals http://www.telegraph...-stand-off.html is worth looking into.

I used to get excited by these "stories" once upon a time. Lots of bitter lessons, individual technologies often don't deliver, things take a long time to come together, as an investor you get progressively diluted as the company runs out of funds. Plus when it comes to miners you need to mug up on each metal etc. and it's a real pain.

And I have lost money every single time, apart from one diamond miner.

Oil and gas just seem much easier to figure out and because there are so many companies essentially doing the same thing, you can use the same knowledge/ideas over and over again.

So now I do boring.

Oil company is valued by the stock market at a level that is equal to cash on the balance sheet. The company is drilling a couple of prospects, either of which could be big. Downside protected, potentially large upside and clear timescale. That's a risk I'll happily take.

[xstatik2]

Another article i read on Gold today, incidently explains how investment in Gold Bars is the new trend. Since most men and women do not wear jewelry, it is wise to invest in Gold Bars which are usually the size of credit cards. With so much of optimism and sooo many sites publicizing the future price of Gold (likely to go up to $ 2300 end of the year) and so on ... it would seem like a tempting offer to invest in such an opportunity. Also the fact that these are predictions based on Economics (Demand vs Supply) the demand for gold is rising and the supply is limited to mines which are few, ultimately affecting price.

[Akritas]

I'm not any sort of professional investor, unlike some of the other people posting, so ignore what I say.

But gold seems like a bad idea to me just now. It looks like a bubble to me, gold is just as capable of going down as, say, real estate.

[Ali Huzaifa]

Man u shud habe brought the GOLD

[gespato]

Maybe its the indian wedding season factor

[hvacgar]

Looks like the Central banks are on this bandwagon .....Gold shares move well with the SPDR shares - a fund which actually buys physical instead of investing in futures

[Cause]

Gold isnt going down until the economy gets better, and that isnt happening anytime soon..

[al ghareeb75]

Max Keiser the economist know well the subject of Gold  i m not specialist but this link can be interesting : http://maxkeiser.com/
Alex Jones as well have topics on this : http://www.prisonplanet.com/

i m also interested by the survivalist project but it 's an other topic however related to the financial crisis and his consequences ...

[Abu Hadi]

These people think they can predict the future, and noone can.
That's the problem with trading in commodities.
If the Euro crisis gets solved, and the U.S. Economy starts to improve significantly, then you will lose money on the gold you buy today.
On the other hand, if the world economies go into free fall again like they did in 2008 or there is a major world war then you will make money.
Which one will happen, only Allah(s.w.a) knows.

There are many better investments like land or investing in an industry that you know alot about already.
BTW, most of the people who make money today on Wall St or in London don't invest this way.
They do it by owning a few very fast computers programmed with good trading algorithms and make a few pennies off of millions or billions of transactions.
It's called arbitrage. It's rich people cheating poor people out of what little they have and the main reason why the rich are getting richer and the poor getting poorer.

Edited by Abu Hadi, 11 July 2012 - 06:47 PM.

[1472Maryam]

The value of gold doesn't change that much over time.  I would not advise it.