Thursday, July 29, 2010

Investing in gold

Mr. Tan,
My friend approached me to invest in gold. I pay a price for the gold bar and am allowed to keep the gold. I can sell back the goal at a guaranteed price and earn an attractive rate of return. Is this a good investment?
Bob

REPLY
You are probably required to pay for the gold at a much higher price than the market price. When the time comes for you to sell back the gold bar, you will probably not find the seller. At that time, you have to hold the gold bar at an inflated price, i.e. the actual price is lower than the amount that you have invested.

Remember this message: whenever someone comes to market an investment product to you, you have to be careful. It is likely to be a scam, even though the seller may be your friend and your friend may not be aware of the scam.  Read my article on "Marketed Financial Products" which can be found in www.tankinlian.com (click on Information and enter the search word "Marketed".

www.tankinlian.com