Gold is a lousy investment

It may not protect you against the worst forms of inflation, which are often in health care. Your email address will not be published. Read about pressure on gold from China interest-rate concerns. Through gold, governments, especially those in emerging markets, hedge funds, institutions and individuals are seeking an inflation hedge, protection from currency devaluation, and the ultimate safe haven in an uncertain world. Read More.

The yellow metal still has a storehouse of long-term value, but not if you choose this way of tapping it.

I think gold is a good short term investment to hedge against inflation when the economy is down and inflation is on the rise, but not so much in the long term. Most of the people Dave talks to are investing for the long-haul. Either way, Gold is a lousy investment doesn’t pick advertiser based on political ideology or anything like. If they did they wouldn’t let GE a company at the top of the liberal pyramid anywhere near. Gold can be dangerous, everyone feels it llousy secure, for a longterm investment it is a risk, just think if a gold cache is mined excavated matching the current amount of gold we have now, do you truly believe the value remaining the same?

Precious metal lures susceptible buyers into a Midas crush

Of all the precious metals , gold is the most popular as an investment. The gold market is subject to speculation and volatility as are other markets. Compared to other precious metals used for investment, gold has the most effective safe haven and hedging properties across a number of countries. Gold has been used throughout history as money and has been a relative standard for currency equivalents specific to economic regions or countries, until recent times. Many European countries implemented gold standards in the latter part of the 19th century until these were temporarily suspended in the financial crises involving World War I. The system existed until the Nixon Shock , when the US unilaterally suspended the direct convertibility of the United States dollar to gold and made the transition to a fiat currency system.

Pros of Investing in Gold

Rich has been a Fool since and writing ivnestment the site since After 20 years of patrolling the mean streets invesfment suburbia, he hung up his badge and gun to take up a pen full time. Having made the streets safe glod Truth, Justice, and Krispy Kreme donuts, he now patrols the markets looking for companies he can lock up as long-term holdings in a portfolio. His coverage reflects his passion for motorcycles, booze, and guns though typically not all exercised at invesrment same timebut his writing also covers the broader sectors of consumer goods, technology, and industrials.

So follow along as he tries to break invdstment complex topics to make them more understandable and useful to the average investor. Yet like life insurance, where most people are probably better off with term insurance instead of whole life because it doesn’t mix insurance’s investment potential with its risk inevstment capabilities, most gold investors shouldn’t mix business with pleasure.

Buy gold jewelry to wear if you want, but don’t consider it an investment. Where an investor buys a coin that contains a full troy ounce of gold, he is paying for the gold content in it.

A piece of jewelry, on the other hand, may have some inherent value of its own, but it will always be inflated beyond its gold content because of the artisanal premium that goes with it.

You’re always investmetn more than what the actual metal is worth. And because gold is gold is a lousy investment the year lower investmeny value than where it started for first time in more than a decade, consumers are flocking to jewelers to buy. If the you-know-what hits the fan because those structural financial inequities finally cause the system to crumble, selling jewelry with its unreliable provenance will be decidedly more difficult compared with selling an American Eagle or Canadian Maple Leaf gold coin.

So by all means invest in gold. I prefer physical possession in the form of coins or bullion as the best option, though there’s an argument to be made for miners such as Yamana Gold NYSE:AUY that have ridiculously low all-in sustaining costs. Even an ETF in some cases can be justified I own shares in one, toothough the case is much weaker. But for anything other than its adornment value and the enjoyment you’ll get out of it, avoid gold jewelry as an investmenr, as it will ultimately tarnish your portfolio.

Dec 29, at PM. Author Bio Rich has been a Fool since and writing for the site since Stock Advisor launched in February of Join Stock Advisor. Related Articles.

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Gold may be a good speculation; even cautionary voices concede that gold is not yet displaying the parabolic hockey-stick pattern that frequently forms an ugly bubble. MarketWatch Partner Center. This fear over the economic future fuels numerous gold scams. Retirement Planner. With the higher demand in gold and with a limited supplythe price of gold went up — massively. Economic Calendar Tax Withholding Calculator. Unlike a bond, the metal pays no. This is gold is a lousy investment, but what if the currency becomes absolutely worthless and we all have to resort to trading goods to survive? Yet gold bugs peddle uncertainty. Warren started doing this as a boy when he bought a hunk of land.