Gold

According to this link gold continues to rise in price as people move money out of the stock market and into gold.  I just don't understand.  Gold just closed a day at its highest price ever and people continue to poor money into gold.  If something is at its highest price ever, it really only has one direction to go in the long run...Down. 

I understand that gold is a security for many people and that if the financial systems collapse and our dollar becomes worthless gold will probably still have value.  However if I am looking for a deal and a long term investment Gold is not where I would be putting my money, because gold is over valued (read bubble) right now.  It may continue to go up for a little while here, but as soon as times become a little less strenuous, gold will go down in value. 

Stocks however, are really cheap right now, and don't cost very much.  There is some short term risk that they will go down, but (again as long as things stabilize here in the near future) long term they are at a bargain price, and who doesn't like a bargain. 

It's easy to see why people lose a lot of money playing this game.  Lots of people got out of stocks after 2008 when everything came tumbling down (so they lost a bunch of money). Then they put the money into Gold which is near a record high, and they will lose a bunch of money when it goes down.

The concept is to buy low sell high, not the other way around.  Right now stocks are low, gold is high, I wonder where I should be investing...

Just my two cents.

Beating the Street

I recently read a book titled, "Beating the Street" by Peter Lynch.  Peter was in charge of the Magellan Fund for Fidelity for 13 years.  I have always been a little curious about the Stock market, and am always looking for ways to make my money work for me.  I felt like reading this book was a great opportunity to gain understanding of picking stocks.
I wanted to share one bit of information that I found particularly interesting.  This comes from page 33 in my edition. 

"If you had invested $1,000 in the S&P 500 index on January 31, 1940 and left it there for 52 years, (1992, which this book was written shortly after) you'd know have $333,793.30 in your account...If you'd added $1,000 every January 31st throughout those same 52 years your $52,000 investment would now be worth $3,554,227.  Finally if you had the courage to add another $1,000 every time the market dropped 10 percent or more (this happened 31 times in 52 years) your $83,000 investment would now be worth 6,295,000."

I find this so fascinating.  I know its not a get rich over night scheme, and if you had put $1,000 dollars in the S&P 500 in 2000, you'd still only have $1,000 or so right now.  It's not for sure and you need to make wise investments (and this book does a great job of explaining how to look for stocks). Its hard to do, and takes time and research (something schools don't teach a lot of), but from the research I have done, it looks well worth it to me to be making investments in my future, even if that means going with out somethings that I really want now.  And I try to pick companies that are invested in things that I feel good about or that I use.  I don't want to pick companies that aren't doing the right thing.  Which makes picking even harder, because some of those companies are very good at making money, but I don't believe in what they are doing or selling, so I choose to pick a different company.