Should You Invest In Gold?

Money For the Rest of Us

J. David Stein

Investing, Investing Podcast, Business, Economics, Economy

4.5 • 1.4K Ratings

🗓️ 7 August 2019

⏱️ 32 minutes

🔗️ Recording | iTunes | RSS

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Summary

With gold at a six-year high, is now the time to invest? What determines the price of gold and what are ways one can invest in this precious metal? We also explore whether gold is an effective inflation hedge and store of value.

In this episode you’ll learn:

How has gold performed as an investment over different time periods.
How gold has outperformed inflation, but has not been a great inflation hedge.
What are the challenges to gold being a safe haven
How gold’s performance is driven by fear and momentum
Why gold is a speculation and not an investment.
Why Ray Dalio and Jim Grant recommend gold but Warren Buffett is more skeptical.
How to invest in gold via an ETF, physical coins or the gold futures market.

Thanks to WIX and Policygenius for sponsoring the episode.

For show notes and more information on this episode click here.

[0:18] Gold may not be as strong as it used to be.
[2:03] The performance of gold depends on when you bought it.
[3:46] Why do people own gold?
[4:15] Is gold actually a good inflation hedge?
[8:07] Using gold to build a safe haven.
[9:56] Investing in gold because it’s under-owned.
[10:46] The supply and demand characteristics of gold.
[12:25] The bandwagon effect of gold.
[17:00] Gold is a speculation—not an investment.
[19:10] Which asset will do best in an inflationary and distrusting economy?
[22:44] How should you invest in gold?

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Transcript

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0:00.0	Welcome to Money for the rest of us. This is a personal finance show on money, how it works, how to invest it and how to live without worrying about it.
0:10.0	I'm your host David Stein. Today's episode 263. It's titled,
0:15.0	Should you invest in gold? Gold has had a pretty good year.
0:21.0	In 2019, it is at a six year high up close to 14% year to date and I'm
0:28.9	starting to get more questions from listeners about gold.
0:33.0	There's been other podcast about it.
0:35.0	I recently listened to the Indicator Podcasts from Planet Money.
0:40.0	The episode was titled Gold Rush 2.0.
0:44.8	They quoted Josh Brown.
0:47.2	He is the CEO of Ritz Holt's wealth management.
0:51.2	He also has the Twitter handle Reformed Broker has over a million followers.
0:56.6	I have followed him in the past.
0:58.8	Here's what he said in the episode.
1:01.4	Gold is below the level it traded at in the early 1980s, almost 40 years ago, on an inflation
1:08.0	adjusted basis.
1:10.2	Everything outperformed it, including Treasury bonds, including real estate, including, I mean stocks
1:15.9	versus gold over the last four decades, it's embarrassing.
1:19.8	It's not even worth discussing.
1:23.0	One of the hosts Darius Raffian then said,
1:26.0	and this woman right now could be Gold's last real hurrah.
1:31.0	Josh says Gold is getting a little outdated. A lot of younger investors who want an independent
1:38.4	government-free store of wealth now tend to gravitate not to gold but to cryptocurrency like Bitcoin.
	...

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