So why do people invest in gold?

• To diversify their investment.
• To protect against crises such as economic, political or social crisis (social unrest, wars and others tend to drag the stock market down…but gold tend to be more stable).
• Because it’s simple and straightforward.
• Because the price chart is easily obtainable.

From what I’ve observed, gold investing can be highly speculative but if you are investing for the long term, gold price will definitely go up. And rather than investing in stocks (which you are relying on companies), funds (which are relying on the fund managers and stocks), currencies (which you are relying on the governments for not screwing up) or real estate properties (which sometimes depends on luck since cheap prices are only available for new housing areas), investing in gold does not have so many external factors involved. True, whatever goes down will go up and vice versa. But for a precious metal which will decrease in amount (there’s only that much gold in the world), the price will still go up, albeit slowly.

So my advise to you and myself, is to look at this possible investment option as a way to diversify my portfolio away from funds and stocks. Don’t buy a lot in one go. Just slowly accumulate little by little. And you don’t need to keep all the gold and gold bars at your home. You can let the banks to manage them

There’s a very good article written by KCLau on gold investment in Malaysia. It’s a very good read. For those who are interested to invest gold in Public Bank, you can refer to this link Invest Gold in Malaysia through Public Bank. Maybank also provides such service and the minimum is 1g of gold, as compared to Public Bank’s 10g.

Take a look and who knows maybe gold investing is the one for you (it’s a good learning step for beginners as well).

Good luck

p/s… just checked with Maybank today. The min investment is 1g but there’s no way you can do it online. Meaning, even if you want to buy or sell 1g, you will have to bring your passbook to any of MBB’s branches, and do the transaction there. Kinda troublesome :T

p/s…. you can check MBB’s gold price HERE.

And our stock market value is nothing but a result of all these speculations. There are times when our stock market does not reflect the actual value it has….and a technical correction is inevitable. Sometimes, such correction can reap in profits for the speculators, but most often than not, it will only make them lose a lot of money.

So what exactly is a speculator and what is an investor?

Speculator is someone who guesses, based on some complex calculations, the value of a stock. And people who time the market can be considered as speculators too. Anything that is not 100% true is considered as speculation. Even if the speculator is confident that 99% of the time, his guesses will be correct..there is still the 1% chance that it’ll fail. The speculator is very active in buy and sell activities.

Investor, on the other hand, invest in a company because he/she likes and understands the business. He is willing to hold the stock irregardless of what is happening to the stock market. And he/she will not try to guess the performance or the “actual” value of a particular stock based on some complicated calculations. Buy and sell activities will not happen often.

To cut things short, our stock market is populated by speculators who buy and sell without looking at the true value of a company. True, speculators do earn a lot but they also lose a lot. Warren Buffet is not a speculator, he is an investor. He hardly sells any of his stocks! So from here, you can see that investors actually earn more and win in the long run….but the 1 thing that every investor needs to learn is patience. Because the stock market will, without a doubt, go up and down like there’s no tomorrow due to speculation activities. The investor will just have to stay put and trust in the company that he/she invests in.

For me, I used to be a speculator and I’ve lost a lot. Nowadays, I prefer to invest and just put my money there. It takes less time to monitor and the risks, to me, are lower too.

What I mean here is never to get other people’s money in order to invest – banks included. Because the risk will always be there when it comes to investment. What if the money you get from others, or you borrow from others, started to become lesser than the original amount? Will the “investors” panic? Will YOU panic? How are you going to pay them back? What if there’s a sudden need to repay that amount of money?

For money from banks, it’s worse because it involves interest rate charges. If you are not able to pay the bank on schedule, they will even charge you penalty fees. If the losses in investment don’t kill you, the bank loans will.

That’s why it’s best not to use other people’s money to invest. Even if it’s your own money, you should only use your extra money and not your emergency fund. Because whenever you want to invest in something, you must always begin with a mindset that you are prepared to lose.

Even Warren Buffett cannot be 100% sure he will earn money every year. If you can, do drop me a message, I would love to know how.