For those of you who lived through the stock market of 2008, you might hear how the only solid investment is in gold. Usually, people will tell you gold and real estate never lose value, and that is simply not true.
So, you might be asking yourself what is the allure of real estate and gold? Especially if they can fluctuate and lose value as any other normal investment. Easy, it’s tangible, you can touch it, see it, feel it, hell you can smell it if you’d like. Investing in stocks and bonds might seem a little abstract. Back in the day when you bought stock in a company they gave you a stock certificate. While stock certificates were beautiful and colorful, it was just a piece of paper. Thus, stock certificates were also susceptible to fire, theft, and damage. Yet, a stock certificate was a tangible representation of your “ownership” of the company. Nowadays they have discontinued issuing stock certificates for the most part. Today, stock ownership is held in an account and in my opinion much more efficient.
So, back to gold. It is true that gold can be a hedge against a volatile market. It is also true that it can be a hedge against a falling market; the reverse of everything I said is also true. When we research investments, we use past data. Based on this data we try to determine what investments will perform best in the current market. Gold often like real estate, marches to its own drum. So, if anyone ever tells you that XYZ investment (or gold) will only go up; run the other way.
So, again, back to gold. Sorry, I get distracted easily, I am part of the MTV Generation after all. If you buy physical gold you have to: store it, protect it, and since gold bars have no ownership past who bears the gold, it’s finder’s keepers. In the event of a death in the family if the gold is not accounted for properly it can easily walk off. I am not a fan of investing in a physical gold bar for all the reasons stated above. However, that is not to say that I think gold is never a good investment. There are many other ways you can invest in gold without owning the physical gold bars or bullion. There are some investments out there that give the owner exposure to the physical commodity (gold) without all of the above-said issues.
It is important if you invest in gold or precious metals that you have help from an advisor. I am not trying to be self-serving. I am telling you that there are a lot of investments out there that claim they are gold or precious metals investments. Yet, when you research them you find out that the holdings are in fact of something else. Get it?
In later blog posts, we will be doing CD reviews, but that day is not today. If you have questions or want to tell me how great I am feel free to hit me up on twitter @melrocksmoney, or subscribe to my YouTube channel ‘Hot Moon Financial’ or just good old-fashioned email me at firstname.lastname@example.org
-Rock On Mel O CFP®/Rocker Chick Extraordinaire
C-Blocker Disclosure-The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful.