Jun
29
If Gold Is A Poor Inflation Hedge?
Filed Under Economics
The Tool Man
What is a good inflation hedge ?
What can I buy, own or invest in to protect my money from inflation ?
What is a good inflation hedge ?
What can I buy, own or invest in to protect my money from inflation ?
Comments
5 Responses to “If Gold Is A Poor Inflation Hedge?”
Leave a Reply
You must be logged in to post a comment.
Who told you gold was a poor inflation hedge?
Gold will be money long after the dollar is gone.
Who told you gold was a poor inflation hedge?
The trouble with gold is that it goes up and down very quickly, by large amounts, based on the mood of the investing masses. So as an individual, you have to be really on top of things to do as well with gold as you can with a longer term outlook in a fund that is managed with your particular goals in mind.
Assuming you are an individual person, investing on your own behalf, you just need to think about what your investment goals are at this stage in your life. If you are younger, you should have a part of your investment aimed at the long run, retirement, or some other goal far out in the future. For this, a low fee mutual fund oriented toward growth, or better yet a market index fund like the S&P 500 is a good choice. With an index fund, you can just invest the money and leave it there until your investment goals change. With the mutual fund, you’ll need to check in on it from time to time and compare it against others in terms of 3 and 5 year returns, and fees it is charging relative to the competition.
As a young person, another part of your investment portfolio might be oriented toward a more dramatic increase in wealth. Here you might consider looking for individual stocks, in an industry you know and understand. Better yet, if you are so inclined, you might invest in your own business opportunity. But don’t use retirement money for this kind of thing. Put that aside first, and in more conservative, yet still growth or market index funds.
As you get older, your investment goals change from growth to maintenance and finally income. Look at the many resources on the web to help you balance your portfolio as you move through these changes, and be sure to be thinking out at least 5 years, or more, as you contemplate moving things around.
Gold is the BEST hedge against Inflation. Whomever you’ve been talking to is lying.
Gold is a *great* inflation hedge over the long term. I think it is overvalued right now, though, because people are panicking over inflation and buying gold en masse as a knee-jerk reaction out of proportion to the actual issues.
If I were starting a new inflation hedge right now, I’d put money into silver instead. It doesn’t have quite the same volatility as gold does when there are economic issues elsewhere, so it’s less likely to be overvalued. Right now it’s trading near historic lows relative to the gold price.
Of course, at my age, since I have some time to wait out the economic issues, I’m buying up equities on the cheap instead. Historically, equities not only match, but beat inflation over long periods of time. Buffett always says to buy when there’s blood in the streets, and that is now.
Gold is a great inflation hedge… that’s the whole reason it does so well turning tough economic times. Read more about investing about it here: