 | | |
Going for the Gold?
| |
If you plug in the phrase "invest in gold" into a search engine, you'll get more than 7 million results. Half of those results will encourage you to invest in gold; the other half will tell you to run from it.
| |
|
People who like gold argue that it protects your money from inflation and a weak dollar. When the dollar gets weaker or inflation rises, gold generally goes up. Gold also is popular during a down market or financial crisis. That's because, unlike stocks and bonds, gold is a real thing you can get your hands on. It doesn't rust, there's only so much of it, and it can't be counterfeited.
| |
|
However, there are easier (and safer) ways to protect yourself from a financial crisis or inflation. For example, the US government sells bonds whose value goes up with inflation. On top of that, gold's value hasn't actually beaten inflation over the past couple decades. If you'd put all of your money in gold 20 years ago, you'd actually be able to buy less now than when you first invested.
| |
|
Gold prices also jump up and down wildly, increasing the chance that you could lose money at some point in time. Likewise, the stock of a company that mines gold can leap all over the place in price. Still, if you're convinced the yellow metal is something you want, consider investing only a small amount of your money. Conversely, you may wish to invest in a commodity fund that has a diversified exposure to different commodities, such as energy, agriculture, land, and metals.
| |
|
