Gold

40-year gold chart.

Back in early 70s, gold price was below USD100 and now it hits high of USD1,800. For those of us born after World War I and II could never appreciate the importance of gold as a vehicle to store value! If you talk to any investor or business man, they will tell you that it is dumb to invest in gold. As Warren Buffet, the legendary investor puts it, "you dig a hole to produce gold and dig another to store it". Worst still gold does not produce income. so why invest in gold? Well having said all this while, probably Warren Buffet is the one that keeping a lot of gold.  

Gold has gone through the test of time even during ancient time it is still the best vehicle to store wealth. Hence wealthy people will always think of gold during slow economy growth and uncertain time. During economy boom time, wealth is invested for various forms of economic activities such as boosting production capacity, services, building infrastructure, spending on luxury goods and even lend to somebody. To sum-up, wealth will be be placed with productive activities that produces economic returns. Hence who cares about buying gold during this period. Observe the period from early 1980s all the way to early 2000s. Gold price has been depressed for a period of 20 years. Gold price always has an inverse relationship with economic growth.

This chart is relevant to Malaysian readers. For those ladies who are keeping gold jewellery, are you aware that you wealth has at least quadruple by now! Should you sell them now and buy back latter! Haha......