Feedback on my AWA essay

[sarahmoore.2009]

Could someone please give me feedback on my AWA essay?
Any comments would be greatly appreciated!

p.s. I did this within the time restraints so I didn't have time to go back and spell check. :)

PROMPT:
"Over the past several years, investment in precious metals, such as gold and silver, has proven to be one of the most profitable investment strategies for our firm. Over the next decade, the demand for these metals is expected to be strong, largely driven by the economic growth of large emerging markets--China, India, and Russia. Thus, our investors are best served by increasing their exposure to precious metals to take advantage of this unique profit-making opportunity."

Discuss how well reasoned you find this argument. Point out flaws in the argument's logic and analyze the argument's underlying assumptions. In addition, evaluate how supporting evidence is used and what evidence might counter the argument's conclusion. You may also discuss what additional evidence could be used to strengthen the argument or what changes would make the argument more logically sound.

RESPONSE:
The author argues that investors should start investing in precious metals such as gold and silver because the demand for these metals is expected to rise, given the expected emergence of large markets such as China, India, and Russia. The author make this argument on the premise that these metals have been highly profitable in the past, therefore, if investors increase their exposure to such metals now the return will be plentiful. Although the intentions of the authors are good for his investment company, his argument is weak and unconvincing because it is plagued with two errors.

One, the author assumes that because investing in precious metals has been one of the more profitable strategies over the past several years it will continue to be one of the most profitable strategies in the future. However, this may not necessarily be the case. It's plausible to assume that these metals were a lucrative investment in the past because they were rare and not in extremely high demand. The expected increased demand in the future may lead to increased mining for such metals, which may lead to several large discoveries of new metals, which in turn would decrease the overall values of these metals because the market would be larger.

Two, the author does not taken into account the basic economics of investing. The most profitable investments are made when demand is low, not high or on the verge of being high. If investors purchase stocks and bonds when the price of such items are low (because the demand is low) they are able to make a much larger amount of money than they would have if they purchased them when their price was high. To illustrate this point, look at a the apple corporation. Apple's stock is one of the most expensive on the market at the moment because of the company's continued success and popularity. It would be unwise for companies to invest in apple at the moment because the price of the stock is so high. It would be wiser to wait until the price dropped a little bit. Those who have made the most money off of apple are the investors who purchased stocks before apple became one of the most profitable companies in the entire world, not those who purchased the stocks afterword. The author of the memo doesn't take this basic investment principle into account when penning the memo. If the author would have stated that the current price of such metals is low his argument would be significantly enhanced, but without this critical piece of evidence, it's open the speculation just entailed in the paragraph herein.

Although the author brings up an interesting strategy, that has potential to make money, the author fails to provide evidence that would ensure the reliability of the strategy. Thus, without providing further evidence and specific details, the author's argument recommendations are unconvincing and vulnerable to criticism.