People love bargains. They will travel miles to find an item they want on sale.
But this behavior is rarely present in investing. Driven by fear of missing out, all too often investors follow the herd and buy assets in a bubble.
Do you remember the investment craze when the Nasdaq was trading at 5,000 in early 2000? Or Bitcoin above $19,000 last December? The mania quickly turned into devastating losses.
Conversely, when Goldman Sachs was trading at $52 in November of 2008 or GE under $7 in March of 2009, few investors had the guts to buy amid collapsing markets.
Only true value investors like Warren Buffett were buying.
My point is that forward-looking investors should always look for value in unloved assets that are trading near lows. That’s especially important in a world of low yields.
Today, gold trades under $1,300/oz. It’s been out of favor for more than seven years after it reached all-time highs in 2011 and some pundits were predicting $10,000 an ounce or more.
Look, gold is now trading at a 35% discount from its previous high. It is truly a bargain in a world laden with record levels of debt and artificially inflated financial assets.
In the long run, therefore, gold has nowhere to go but up! However, there is an even more attractive investment you can get into today.