Page 29 - Introduction to investing in Gold

The Beginner's Guide to Investing in Gold
Key Chapter Takeaways
Investments are often cyclical. Although they can go up for a long time (like property), they are NOT a one-way bet; they can go down as well as up. You must make sure you’ve got enough money to cover yourself if things work against you.
Leverage (debt to you and me) is great when it’s working for you (interest rates are going down). But it can be brutal when it turns (interest rates are going up). Again, make sure you can cope with a downturn. Life is for LIVING, not EXISTING.
Build in a buffer in case you’re wrong. Hopefully, you won’t be, but if you are, you want a bit of wriggle room. As a professional investor, I do get things wrong, but if I’ve got a buffer, I’ve given myself a second chance.
Before you do anything, make sure you’ve got some assumptions clearly laid out. Take a look at them before you sign on the dotted line and be careful about catching that falling knife – research, research, research.
Inflation is relevant to interest rates. If you’re worried about one, you should also think about the other.
Debt can be great when it’s cheap but be VERY careful when it’s getting more expensive (look at the direction of travel).
Make sure there’s some fat in your assumptions if you’re buying an asset that’s sensitive to interest rate and inflation movements.
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