Forum Thread

Investing in Gold Just Isn't Worth It...For Most of Us

Reply to ThreadDisplaying 3 Posts
  • Are you sure you want to delete this post?

    I'm a firm believer in having a diversified investment portfolio and precious metals, including gold, could be one part of that diversified portfolio. Unfortunately, a whole lot of Americans have little to no retirement savings at all, let alone a stable investment portfolio they can turn to. It's those Americans I'm speaking to when I suggest that turning to gold as the beginning of your investment strategy probably isn't the best idea.

    We've all seen the commercials about gold being a fool-proof investment and driven past one of the thousands of "Cash For Gold!" stores littered throughout the country and maybe thought to ourselves, "gold has been around forever, so it has to be a great investment." Unfortunately, that hasn't really proven to be true when compared to the performance of the stock market over the past 40 years. As Robert R. Johnson of the Fed Policy Investment Research Group put it, "From 1972 through 2013, common stocks returned 14.68 percent in falling rate environments while gold futures returned 7.85 percent. In rising rate environments, stocks returned 8.47 percent while gold only returned 4.86 percent. When rates were flat, stocks provided a gain of 10.61 percent and gold returned 8.61 percent."

    So the next time you are thinking about dialing that 800 number to purchase some gold coins, perhaps it would be a wiser move to follow the lead of Warren Buffet and use that money to open up an account with a brokerage firm or invest that money in an index fund. Or, if you really want some precious metals to look at, consider investing in gold's red-headed stepchild silver.

  • Are you sure you want to delete this post?

    Was going to counter that you might be able to save money on taxes/fees when buying/selling, but a quick google search says you have to pay capital gains on physical gold and silver, just like stocks -> Taxes on Physical Gold and Silver Investments

    That lead me to stumble upon Gold IRAs.. interesting. Any thoughts on this, compared to other IRAs or other retirement accts?

    Also, you could have done well with Gold if you bought at the 'bottom' in 2016. Fell under $1100/oz. Now its $1730 and change. So a max of 57% if you timed it perfectly and sold today. That's best case scenario but a really solid return for 4.5 years.

    Of course just depends when you get in and out. Gold is a solid investment I think. But diversifying and DCA is the most intelligent move. That, and never investing more than you are willing to use at a moment's notice.

  • Are you sure you want to delete this post?

    I wouldn't go 'all in' on gold either. But also hard to argue with anyone that did in the last few decades. Here's a Stocks vs Gold vs Silver chart comparison. You can play with numbers for 10 years - 100 years, or see them all time.