Four choices:
There are four basic ways to buy gold: physical gold, gold jewelry, gold-related mutual funds or ETFs, and gold mining stocks.
Archive for the 'Gold' Category
Gold as an investment (III)–how to buy
Published June 11, 2009 Gold , Industry Analysis 2 CommentsTags: economy, finance, inflation, investing, money, stock market
Gold as an investment (II)–inflation hedge? not so much
Published June 10, 2009 Gold , Industry Analysis 2 CommentsTags: economics, economy, finance, inflation, investing, money
Many people still believe that gold is an inflation hedge. Maybe that was true in the nineteenth century and before, but I don’t think it is one today. I don’t think the price of gold over the past thirty years supports the inflation hedge view, either. But others clearly interpret the data differently from me, since the inflation hedge thesis seems to be firmly embedded in conventional wisdom.
Three factors have changed the place of gold in investing over the past few decades. All argue against the inflation hedge thesis:
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Gold as an investment (I)–Goldfinger redux?
Published June 8, 2009 Gold , Industry Analysis Leave a CommentTags: business, economics, economy, finance, inflation, investing, investment strategy, money
Who doesn’t find gold intriguing?
I’m not a huge fan of gold as an investment. I can’t relate to what I consider an obsession about the yellow metal by gold bugs. But I do think it’s a fascinating topic.
When an American thinks about gold, he has images of mystery and intrigue–of pirate treasure, or James Bond, or hard-bitten solitary miners making a strike in the hills of the Dakotas or northern California. In an earlier age, the picture would have been of a guy in a funny hat, wearing an elaborately-decorated bathrobe, trying to “transmute” base metals into gold.
A better image for today might be the situation of a citizen in China or India, Vietnam or Turkey–which are four of the largest consumers of gold (the US and Italy are, too, but the uses are somewhat different). Someone in one of these countries may not be wealthy enough to have a bank account, or may not want an official record of his transactions. He may also worry that to be seen as wealthy will attract unwelcome government attention, or that a bank account is subject to nationalization in a way that a gold bar buried in the back yard is not. He may have experienced, or worry about, hyperinflation. His holding may well technically be jewelry, but more than likely it will be 22 karat or 24 karat (chuk kam), and bought and sold by weight.
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