Is Gold A Good Investment?

[No DUplicitous DUpe]

Is Gold A Good Investment?
posted with permission from http://sane-ramblings.blogspot.com/2010/11/is-gold-good-investment.html

It's current price in dollars is about $1,370 per ounce. At that price, if you have some extra money, would you be wise to invest it in gold? If you have gold jewelry, should you keep it or sell it?

Measured in dollars, unadjusted for inflation, gold hit an all-time high of $1,409.80 an ounce on November 9th and while its price fluctuates, it has tripled in the last six years. Why? From fear. There is tremendous anxiety about the U.S. and European economies and the dollar and euro so nervous investors have bid the price up.

But while gold coins and jewelry are pretty to look at they have little practical value and can be a lousy investment. You can't eat or drink them, gas your car with them nor easily spend them. They make no interest income and they can lose value.

If you need cash to pay your bills, seriously consider selling the gold jewelry that has no sentimental value to you. Making a mortgage or car payment or paying for your health insurance is far more important than a largely forgotten piece of jewelry.

If you are an experienced commodities investor and you are knowledgeable in gold, then you may want to speculate in its value and even do so in multiple currencies. But if you are like most of us and simply want a hedge against the declining dollar or euro, then it may be worth a small investment of your savings.

One of the most common ways to invest in gold is to buy shares in a gold fund. The biggest fund is SPDR Gold Shares, which trades under ticker symbol GLD on the New York Stock Exchange,* as well as in Hong Kong, Mexico City, Singapore and Tokyo. Funds are relatively inexpensive and let investors get easily in and out of gold.

If you would like to own coins, you can buy one ounce or even 1/10 ounce gold coins and put them away. If the U.S. and/or European economies bounce back and the dollar and euro become strong, you likely will have lost some value but you had the comfort of feeling safer about your savings.

But if the U.S. and/or European economies collapse and take their currencies with it, or they inflate their currencies to try to avoid a collapse, you will be pleased you have this sanctuary of value and what could become valuable and usable currency.

Dick

*For more information about GLD and using this approach to invest, please see Wall Street Journal, "Behind Gold's New Glister: Miners' Big Bet on a Fund," 11/26/10 http://online.wsj.com/article/SB10001424052748703628204575618602535514506.html

[hobbit709]

1. Only for those trying to sucker you into buying.

[Warpy]

2. Gold is a hedge against inflation. Its value should reflect actual inflation

and it doesn't generate any returns the way savings or equities do.

Offhand, I say limit your gold to jewelry you like and wear.

The price of gold has skyrocketed in the last 6 years, far faster than the rate of inflation. That means investor beware. It is being manipulated by the big boys and using it as a long term investment should be left to those big boys. Leave them holding the bag for once when the bottom falls out.

[No DUplicitous DUpe]

3. Did you read the piece, or just comment on the title?

The author is just trying to answer questions he has been asked frequently, lately.

[No DUplicitous DUpe]

5. oops, I meant to address this to hobbit709 nt

[mitchtv]

4. good investment? not so much

good insurance, yes
It is too expensive to be a good investment right now, It is, nice to have some if everything else crumbles

[No DUplicitous DUpe]

6. Thank you Mitch....

Nicely summarized.
:hi:

[Poboy]

7. Exactly. Use it to preserve wealth if you think TSHTF is upon us.

Not good for wealth appreciation, but saving what little you have in this climate.

[DailyGrind51]

8. I remember when real estate was supposed to be a great investment!

Because "there is only so much land". Look what happened with that one!

[Greyhound]

9. If you bought it in 2002 through 2006 yes. With the spread and fees I would only

buy it if I believed it will hit $3,000 or higher. At today's price, it will have to hit about $1,950 for you to break even.

[WhiteTara]

10. Turn the tv off, put down the remote and

walk away from the tv set. Do not. I repeat Do not watch Glen Beck again. After you have had a good scrubby shower and spent some time in nature, you will begin to regain your senses and know without asking, gold certificates are a very bad investment; especially now at the price of $1300 something or other.

[No DUplicitous DUpe]

19. Re: "you will begin to regain your senses and know without asking.."

The author was only using the title in question form, to make a narrative point. He knows (without the help of Glen Beck) what he thinks of gold and its price to value in the current market.

[Xenotime]

11. The article forgot to add that gold will never be worth nothing.

Unlike big-company stocks.

[WinkyDink]

12. What will it be worth? Useless currency?

[Poboy]

14. Do not be so smug...

Gold For Bread - Zimbabwe

MDC activist Sam Chakaipa returns to his village in Zimbabwe to find his friends and neighbours starving. As the Zimbabwean dollar becomes ever weaker, gold has become the currency of choice.


VIDEO CLIP-
http://www.youtube.com/watch?v=7ubJp6rmUYM

[Wounded Bear]

13. I've always figured.....

that by the time I hear about "how good such-and-such of an investment is" it is too late for me to make any money at it.

:shrug:

[Poboy]

15. At the moment it is not a 'safe' buy, but wait for a significant pullback.

It is due for one. I would guess if it drops to around $1000, that it would be a good buy, but I am just an anonymous poster on a message board. Do not take my comments as advice, and DYDD.

[Ruby the Liberal]

17. Bullion? I agree. I like equity commodity mining.

[Ruby the Liberal]

16. I like FKRCX (Gold, Silver, Platinum, Palladium mining)

Information: http://www.franklintempleton.com/retail/app/product/views/fund_page.jsf?fundNumber=132

[taught_me_patience]

18. No

Read the book "A Random Walk Down Wallstreet".