People Don’t Buy Gold to Make Money; They Buy It Because They Have Money

By: Julian D. W. Phillips, Gold/Silver Forecaster - Global Watch - GoldForecaster.com
-- Posted Thursday, 12 January 2012

Performance and Trading

You heard the saying, but what does it really mean? We live in a world where performance is stressed. Hedge funds can be measured on a monthly basis. Twenty percent charges on profits are levied by fund making their view short-term. Daily assessments are made, comparing one sector to another giving the impression that short-term performance is what it’s all about. But is it? No it is not.

Just look at where real wealth resides and why it’s there. Old Money means wealth held for many generations. How can wealth be held in this way, and how was it made up? While that’s a huge subject and one we cannot cover here, it’s important for you to realize that this was not made on a monthly, trading basis. It certainly was not made through day or week or month trading. Many traders do well several times and then on a “certainty”, go into an investment that costs them their past profits, and more –this is more akin to gambling. Looking at a month to month trading performance as the measure of investing ability, the investment manager is being measured on his ability to trade short-term and not on his investment abilities. Genuine wealth-building ability is a far broader subject than this, as the wealthy know.