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Originally Posted by UglyBuzzard
I agree with most of the above. I think the metals have a purpose in a portfolio though. Hedge against inflation, wealth preservation, pass down to kids, and for periodic treasure baths.
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Gold is "NOT" a hedge against inflation anymore than any other investment. This is something that the sellers in the market will tell you, but what that means is that your actual dollars will increase in value greater than the inflation rate. Nearly any market investment will do that, and some no-risk items (such as long term CD's) will provide this comfort with little to no risk.
Overall, Gold is a terrible investment. Adjusted for inflation, over the last 50 years, Gold has average..... wait for it...... a whopping 2.9% return. Wow! That sucks!
If investing that money with no plan of any kind and just sticking it all in a completely un-managed index fund, you would have got 5.8% - nearly double the return.
If you invested that money more carefully in good, growth stock mutual funds, the annual return, adjusted for inflation, would have been 8.4% over the last 50 years.
Don't invest in gold.
Quote:
Originally Posted by UglyBuzzard
Looks like a buying opportunity. Some day, it will be worth more than it is today.
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It probably will, but this isn't guaranteed in any way. Over the long run, gold has just barely outpaced inflation (by about 2%). That is very minimal growth and it wouldn't take much of a market correction to cause that growth to disappear.