I don’t include Gold in my Portfolio – but I understand if others feel the need. The thing that turns me off the most -are those terrible infomercials on Fox News – trying to rip old folks off by scaring them into buying gold coins at inflated prices:
What they don’t tell you in the ad – is that you are paying up to a 40% premium for the gold content in the coins.
I like to be able to value my investments by their cash flow – gold has no cash flow. I also like all my holdings to produce income – and that is not something gold can do (in either paper or physical form).
Many experts will tell you to keep 5% of your money in gold – in case of a total meltdown, but that seems silly – 5% is not a big enough stake to be meaningful, and it probably won’t help anyway:
- MarketWatch – Why gold has utterly failed as a ‘safe haven’
- CNBC – Sell gold now as recent rally isn’t justified, says Goldman Sachs
My feeling has always been, if things really go south (War, Zombies, whatever), having paper gold investments like the SPDR Gold Shares GLD will not be very useful. Physical gold might help, but a Gun or some Farm Land would probably help a lot more – plus you have to find someplace to keep your physical gold that is safe – not sure where that would be – Banks (good luck), your basement (don’t tell the neighbors).
Gold as an investment just does not compute for me – but feel free to invest as you please, especially if it helps you sleep at night.
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