Knocked Off Of Its High Horse: Gold No Longer A Good Investment

For years all we heard about was “gold, gold, gold.” from Jim Kramer throwing little ducks in your general direction to the pages of the Wall Street Journal, you couldn’t get away from the precious metal or it’s not-so-slowly northward creeping stock indicator line. But that line no longer represents a tall hike up a ski slope; in fact these days, it looks more like a bunny hill.

So just what happened to gold? After the financial crisis, investors bought boatloads of gold fearing inflation and de-valuation of the dollar. Currently sitting at about $1,400 per ounce, the price of gold is twice what it was two years ago.

But as Warren Buffet could tell you, investors make money as their stocks crawl (or in this case, sprint) to the top, not when the apex has been met. Gold has already made much of the money it is going to. By investing now you could make a few bucks, but it’s also possible that the market will begin to level off and you could actually lose money by investing in gold – particularly if the recent rise in value is fueled by speculation.

Though it isn’t a sound move to focus your portfolio on gold, that doesn’t mean you should sell off what you have. Many 401ks, retirement and savings plans included gold within their portfolios. Ask any financial planner and he will tell you that the problem with gold is that it doesn’t earn dividends, it simply sits there holding value until you sell it. If you want to play the stock market and really make a lot of money quickly, you have no chance with gold. Not anymore, at least.

Fore more information about gold and the market, speak with your personal financial advisor. If you don’t have a relationship with a financial advisor, finding one in your area can be quick and easy – and fee based financial advisors only take commission on your stock earnings, so you know that they will work with your best interest in mind.