Tuesday, February 26, 2013

Problems with 100% gold investment

Some of you here on the blog may not delve into the Youtube universe. Its as I describe though... nasty at times and emotional. Its why I put a big focus on controlling emotion and psychology.

Gold is an asset class. It has strengths and weaknesses, reasons to own and reasons not to own. I have held it for the Effort Portfolio and will do so again in the future. But its not a magical end-all be-all for your economic woes.

Disclaimer: The investments and trades in my videos and blog entries are not recommendations for others. I am not a financial planner, financial advisor, accountant, or tax adviser. The financial actions I talk about are for my own portfolio and money and only suited for my own risk tolerance, strategy, and ideas. Copying another person's financial moves can lead to large losses. Each person needs to do their due diligence in researching and planning their own actions in the financial markets.


  1. Jack therefore takes his $100,000 and buys 100 ounces of gold at $1,000 an ounce ... Jack decides to lock in his gains by selling his gold investment, redeploy most .... when we take into account the pervasive problem of hidden inflation taxes. gold investment account

  2. I think, it depends on what you want from your investment. If someone wants to preserve wealth and protect it from inflation, buying some gold may be great choice, especially coins which are easier to sell comparing to bigger bars (http://www.wealthprotecting.com/golden-bars-golden-ingots-or-golden-coins/). But its clear that investing all your finance into one thing is not wise, no matter how great it seems to be at the moment. For example, now the price of gold is going down (looks like gold bubble from last years is finaly deflating). So for preserving money value, i ll choose different investments, not just gold.

    Different situation is when you want to grow your wealth. In long time gold is good (especially because of contantly growing inflation), but i think there is better investing opportunities (maybe less safe, but with higher potential growth). In short period its not a good idea, especially now, because of that deflating gold bubble.

    1. I'd argue that dividend stocks do better at hedging against inflation then gold does. Gold was relatively flat for 3 decades in the 80s, 90s, early 00s. If you had to live off your gold during that time it would have been bad. During that time inflation set in.

      Dividends on the other hand generate income without having to sell and give up ownership of the asset you own. They raise their payments each year. Finally the companies will have their prices rise with the cost of their commodities of their products and pass on that cost to customers, or controlled through hedging in the commodity markets.