What do we think about investing in GOLD???

[Thrif-t]

I'm going to be receiving a small inheritance and I'm trying to decide what to invest it in. Of course with the dollar falling I'm thinking maybe I need to put a little into gold or some other commodity. I got my new Kiplingers Mag today and there is an article about Gold prices rising but also about how volatile it is. Just wondered what the experts here thought.

[humandraydel]

I'm going to be receiving a small inheritance and I'm trying to decide what to invest it in. Of course with the dollar falling I'm thinking maybe I need to put a little into gold or some other commodity. I got my new Kiplingers Mag today and there is an article about Gold prices rising but also about how volatile it is. Just wondered what the experts here thought.

Honestly, I don't like gold. Neither do the people who bought it in the late 70's for $850 an ounce, which is an inflation-adjusted price of over $2000 an ounce. So even at today's $800 an ounce it is nowhere near the price of the late 70's.

That being said, a small percentage 5-10% in a commodites fund can be a good diversifier, but commodities don't really return more than inflation since they are, essentially by definition, inflation. If one rebalances with a commodity fund though, it can help produce a positive return.

Also don't forget that an unhedged international fund is a great asset when the dollar is falling. Personally, I think it's a better hedge than commodities. Of course, others will disagree.

[Jaun22]

I have heard good and bad about getting into the gold investment thing. I would say go for it and just like another stock just ride the wave.

[Broken Arrow]

Yeah, I'm with Humandraydel on this one, especially right now since everybody and their Auntie is trying to find shelter against the dollar. Let's just say that I'm not much of a momentum investor.

I mean, if the dollar is strong, gold prices are low, and you want to buy some as a way to balance your otherwise aggressive portfolio, that'd make sense. Otherwise, fuggetabutit.

[Scanner]

My silver is up 4.5% today. . .can't beleive the run the last 2 weeks, up a total of 13% for the year. About 2 months ago, I was lamenting I lost 15% on it.

So, that's how volatile precious metals are.

Whether you do it or you don't (I put 1/3rd of my portfolio in silver), I do disagree with Humandrydel on an international fund being a diversfier or hedge against the dollar.

The international funds anymore tend to rise and fall with the American markets. I think the only reason to invest in international (and that by far has been my best performer) is that fundamentally, that is where most of the economic growth in the next 50 years is going to happen (not in America).

But if America heads into a recession, you can bet that China and India will.

I prefer silver to gold because it actually has some industrial uses whereas gold is a pure psychological worth kind of thing. Whether the dollar rises or falls, industries will always need silver for semi-conductors, photovoltaic cells, photography, etc.

I am kicking myself for not buying OIL or USO though.

[humandraydel]

Whether you do it or you don't (I put 1/3rd of my portfolio in silver), I do disagree with Humandrydel on an international fund being a diversfier or hedge against the dollar.

You can disagree with me on Gold/Silver but I don't know how you can disagree on international assets. If the dollar is falling, assets priced in other currencies is automatically rising. Plus, these companies are generating profits and dividends that are now worth more dollars. How can this NOT be a hedge against a falling dollar?

[sweeps]

International stocks are a good hedge against a falling dollar, except for the stocks of companies that sell a lot of goods to the United States.

[i-endeavors]

gold is at it's 28 year high. I think it will go higher, but not before it dips a bit. Now is not the best entry point.

Might short gld though when the dollar returns.

[disneysteve]

We own a gold and minerals fund that is up over 40% YTD and 56% for the 1-year ended 9/30/07.

[Thrif-t]

Steve can I ask what Gold Fund you are in? Thanks

[pennrj430]

I was researching gold and silver these past few months. My feeling is it is a nice part of a well diversified portfolio, but I wouldn't put more then about 5% into gold. I know some people put more into metals, and some do well. But I think there are other sectors to invest in, and putting more then 5% in gold takes away from the others. Gold has been doing great this year, but as a long term investment, it's just ok. This is just my observation.

[Jaun22]

I would have to agree with that. Gold should not just be your sole investment. The key is to diversify.

[Snodog]

Gold is a poor long term investment but it is a great diversifier. A little gold is alright but I wouldn't go overboard.

[Thrif-t]

This is what I'm looking to do DIVERSIFY my portfolio. I also need some international in there and have another thread going asking about any international funds offered by Vanguard, American Century or Gabelli, the 3 co's I'm invested in.

I probably should be looking at some energy too!! I've come into a small inheritance and am looking at new places to put the money.

[disneysteve]

We're in OPGSX, Oppenheimer Gold and Special Minerals fund. It is a load fund, but we got into it in my wife's 403b and didn't have to pay the load. It is up 44.69% YTD.