Sure, gold is a fantastic financial investment if you desire something that pays no interest, no dividends, and reasonably could go twenty years without going up in worth. Sounds luring, does not it? Seriously, let us consider why gold would or would not be a good investment.
Historical Gold Costs
If you look at historic gold costs, you can see that the price of gold shot up dramatically in the 2000’s and appears to have actually peaked in the summer of 2011.
Looking back, something comparable happened in the late 70’s. After the cost boost in the 70’s gold invested the next twenty years declining in value.
After the recent remarkable increases in the rate of gold, it is completely possible it will once again languish for a significant length of time. While it is languishing, it is not producing interest or dividends. In retirement, you need an investment that either produces existing earnings or is fairly expected to value in value so you can sell it in the future and use it for usage purposes. I do not believe gold is something you can count on for either of these purposes.
Gold as an Inflation Hedge
Many supporters of gold recommend it is an excellent hedge versus rising costs. The realities do not support this declaration. Gold is a much better hedge versus a crisis, instead of a hedge versus inflation. In times of crisis, gold rates tend to increase. That is not always the case during times of high inflation.
Although individuals flock to gold in times of crisis, if a real crisis takes place, I have my doubts as to how efficient a stockpile of gold would prove to be.
Stock-Piling Gold for the retirement
If you stockpile gold somewhere safe, and a crisis occurs, how are you going to use your gold to buy beneficial products and services?
Do you think individuals are going to begin pulling out their kitchen scales, weighing gold and trading it for eggs and chickens? Possibly. However if a real crisis occurs there many things I ‘d rather own than gold; things like batteries, weapons, solar panels, chickens, a garden, oil and gasoline, just among others.
Gold for Speculation
I do not believe gold is a great investment for retirement. The article Why Invest in Gold reveals the viewpoint that “Gold itself is speculative, and can have high peaks and low valleys. That makes it too risky for the average specific financier.” It also makes it risky for the typical retired person. Instead of hypothesizing, many retired people should hang around on building a property allowance plan designed for retirement.
I do think gold can be a great investment for speculative functions. If you had the insight in 2007 and 2008 to see a significant financial crisis coming, you could have speculated and purchased gold on the anticipation that it would end up being popular in the face of a crisis. In such a scenario instead of taking possession of actual gold bars or coins, you can purchase a mutual fund that owns gold, which allows you to buy and sell it quite quickly. Obviously, in hindsight, it is easy to see what you could have done.
Acknowledging these scenarios in advance is tough to do and it’s usually random luck, not ability, that results in decent returns from the practice of speculation.
Now that the bulk of the crisis is behind us, if I had more than 2-3% of my properties designated to gold, I ‘d be wanting to start offering it off and decrease my direct exposure to this volatile possession class.
Gold for Enjoyable Retirement Life
If you want to invest in gold as a pastime, go for it! Like any pastime, it may become something rewarding, and if it does not, you will have some enjoyable and learn a lot along the way.