Some people believe that investing in gold is a good hedge on inflation and should be a part of everyone’s portfolio. Others don’t believe the hype, and insist that its value fluctuates on the whims of an insecure market.
It could be argued that gold isn’t an investment at all, just a roll of the dice that eventually craps out. Solid investments, like stocks, bonds and real estate can see long-term growth with a well-researched investment plan.
Gold bullion is not supported by anything other than its good looks and can rise and fall at the whim of investors. Even the fact that it has increased in value fairly rapidly in recent times should be a red flag. Gold has skyrocketed from $600 an ounce to over $1,400 in the last five years. The last time that happened in the 1970’s the price dropped drastically and eventually sat there for over 20 years.
You may be convinced that gold is necessary when inflation is looming, but there are no current indicators that that will happen in the U.S. anytime soon. The economy is improving (arguably slowly) and the stock market is robust and many experts predict that corporate profits will exceed current expectations. Any investment in the other direction could prove to be foolhardy. The bottom line is gold doesn't produce profits or dividends as other investments do.
On the plus side, if you are good at knowing when to fold, the game could be very lucrative. Prices hit a record high just today. And it’s a universally known fact that solid gold jewelry is a good investment in domestic relations.