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Will gold always be the best investment? If not, why? Any other alternatives?

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  • Answer:

    Long-term gold is almost certainly a poor investment because: a) Gold does not produce anything A lump of gold produces nothing of value to anyone. An equity investment means that you have an ownership interest in an enterprise that produces valuable goods or services on an ongoing basis. You should expect that this productive activity rewards the person who capitalized it thus making it possible. b) Ownership of gold provides no societal value It does your neighbor no good that you are hoarding gold. On the other hand, your neighbor likes it that you are capitalizing the companies that produce the goods and services that he consumes, or that you are lending money to the govt that provides for him, or that you are ledning money to corporations. Socieities tend to reward things with social value and not reward things that don't. c) Historically, gold has underperformed virtually all other asset classes. Someone proudly pointed out the other day on YA that gold is a store of value - that an ounce of gold would have bought a fine suit in Cleopatra's day and will still buy a fine suit today. Well, if you invested one ounce of gold in equity in Cleopatra's day, you would now have enough money for thousands of suits. Gold is on a few year run. That you think this might mean that it will always be the best investment is frighteningly naive.

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Gold is NOT the "best investment." It never has been and it never will be. You listen to too many of those stupid commercials from people trying to sell gold. Do some research if you want the facts. The past few years has been an up time for gold, and even at that if you compare to other investments, it has not done very well. Plus gold will not be staying at its current levels, or certainly not going up from here. If you want other investment ideas, do some looking around instead of relying on Yahoo Answers and commercials.

I Like Turtles

Seriosly????.... Gold the "best investmrent"....... if that was true all the experts would only be buying gold (they're not). It totally ignores the times in history where Gold dropped by over 50%. It took Gold 30 years to recover from the last time it did this (early 1980's). Knowing nothing about investing & thinking there's one "best" investment is a sure receipe to get devistated financially.

Common Sense

Fundamentally, an investment is supposed to improve in value. An investment in a company is an investment in a business intended to make a profit, so long as it makes a profit, the value of your investment improves. Gold doesn't do anything, indeed you have to pay for storage because any physical gold that you take out of leased registered vaults is at a higher premium, often as much as 40% for gold in the quantities that many people buy. By itself, gold only costs you money. Yes the price does go up and down and as with all commodities inflation assures a upwards movement but there is no reason for gold to improve hence it's not an investment regardless of what a small time frame says. Compare purchasing gold in the 80's at $860 an ounce to it's $1,770 an ounce now, how does that compare to buying stocks at the same time, very very poorly. Factor in the 40% spread for storing at home instead of in registered vaults (note you lose on the spread when you sell too) and you may have done better with CD's and bank accounts or even your mattress.

John W

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