Skip to main content
  1. News
  2. Politics
  3. Policy & Issues

Money-saving tip: Gold investment

Gold fever? This precious metal has really drawn in investors and speculators alike.
Be careful before you get swept up in gold mania!
 
In 1980, the value of an ounce of gold was $850/ounce, according to The Chicago Tribune. Yet in 1999 it was less than $300. People who bought at peak, if they held on, lost almost three-quarters by the year 2000.  

Today, gold has been trading for as high as $1,200/ounce. But it's obviously been a wild ride over the years. The value of gold is highly volatile. It's probably done so well lately because of the world's general economic uncertainty….that’s right: Gold panic is back on. Many people look at the dollar’s value (de-value) and uncertainty of the U.S. economy, especially compared to a Global scale, and are in panic.

It is a good idea to have some gold as an investment strategy, but you should generally limit it to between five and 10 percent of your overall portfolio. Do not put your entire investment package into gold, it's too risky. Buying gold on momentum and trying to time the market as to when to sell is too difficult.

Could gold go to $2,000/ounce or even $5,000/ounce in the coming weeks? Sure. But more likely it will go the other way now that it looks like worldwide economies are slowly stabilizing.

The best way to own gold is through a gold exchange-traded fund (ETF).

 ETFs are the fastest growing area of investing, and the penny-pincher likes to call them "a mutual fund for the next era." You buy ETFs exactly like you would a stock -- preferably through a zero-commission broker -- and you can sell them at any time. With a gold ETF, you let the fund store the physical bars of gold at minimal cost to you. It makes much more sense than burying them in your backyard!
 And then you can buy and sell at will, without worrying about getting clobbered on the spread.
SILVER, also known as the currency for the “common man” may also outperform gold in the upcoming years. And, because there is less silver above ground, silver is actually more rare than gold.
Silver is currently undervalued due to a move back in 1979 when Paul Volker bankrupted the Hunt Brothers causing the price to plunge by 90%.  
ETFs that track gold prices using futures contracts will track the spot price of bullion very closely, but may deviate occasionally due to phenomenons such as backwardation and contango in commodity futures markets.
Ticker
ETF
Exposure
Vault Location
SPDR Gold Trust
Gold Bullion
U.S.
0.40%
iShares COMEX Gold Trust
Gold Bullion
U.S.
0.40%
PowerShares DB Gold Fund
Gold Futures
n/a
0.50%
ETFS Physical Swiss Gold Shares
Gold Bullion
Switzerland
0.39%
UBS E-TRACS CMCI Gold Total Return
Gold Futures
n/a
0.30%
Contact James Hamilton: jhamilton31@comcast.net Or find me atTwitter   Houston’s Workplace Examiner   LinkedIN MySpace  
And if you liked this article…let me know on: Reddit   Digg  
 
If you enjoyed this post, please consider leaving a comment (below) or subscribing to the feed (above) to have future articles delivered to you!

Comments

  • Sami 4 years ago

    Where is the don't drink & email? lol

  • Charles 4 years ago

    Not sure who Sami is, but she sounds fun!
    My parents are hoarding gold and I had the same concern...when is the bottom going to fall out? I guess that depends on the Economy finally getting past some point of stabilization, but when is that and what is that magic number when to sell?

  • Samuel 4 years ago

    My gold investments are still better than my collapsed 401K! We need something secure and metals are our only hope.

  • Elizabeth 4 years ago

    It sounds as if you are encouraging other stocks, but not mentioning them. The reason for that is that with this current administration, no stocks are safer than natural metals! Gold and Silver are the investment answers and may be the only investments until 2012!

    Elizabeth Marie - Fort Bend Conservative Examiner

Advertisement

News

  • Gaza conflict
    Israel official: Ceasefire and expanding Gaza conflict are both being discussed
    Video
    Video
  • Air Algerie crash
    Conflicting reports about the Air Algerie disappearance begin to emerge
    Top News
  • Arizona execution
    A Senator familiar with torture denounces Joseph Wood's botched execution as such
    US News
  • Ray Rice suspended
    Ravens' running back Ray Rice is suspended for two games for a domestic violence arrest
    Sports
  • Amazon tribe falls ill
    An Amazonian tribe catches influenza after making first contact with the developed world
    Headlines
  • CIA prison in Poland
    Poland is declared guilty of human rights violations for hosting a secret CIA prison
    Video
    Video