By Terry Savage on January 04, 2024 | Wild Card

I do not understand what the advantage of having gold is (either physical or gold shares). When gold was the standard for the US dollar, understand why someone
would want to own gold. But now it’s just a commodity. There seem to be several firms that will sell gold, but it does not seem to be terribly liquid. Please explain why an individual investor might want to own physical gold, or shares in a gold investment account.
Thank You!

Terry Says

Traditionally gold has been a hedge against inflation. And when I say “traditionally” I’m talking millennia! Remember, you can always “print” money, but you can’t “create” new gold. Alchemists have been trying to do that forever!

But I must admit, gold has been a disappointing investment over the past few years of inflation. Sure it’s above $2,000 when it was below $1,000 in 2009. Bu the stock market has far outperformed gold. Probably because interest rates finally kept up with inflation, and moved a bit ahead.

Numismatic (rare) coins might be a better investment. But don’t fall for those sales pitches you describe. If you want to allocate some of your money to “gold” then consider a gold shares mutual fund available at all the major fund companies. At least you get the possibility of dividends. Buying gold bullion or bullion coins means you don’t get the interest you could earn on cash.



a personal
finance question