All That’s Gold Does Not Glitter

By | June 13, 2020

I wonder. If I buy gold today, what do I have in 20 years?

In theory, gold is a store of value. It should not be an investment. Sometimes it is. How?

Gold at times is unloved. This is when the price of gold goes down below what it really should be. Then it is a buy. At other times gold is treasured. For instance, when inflation spikes, people want gold. That is because currency actually depreciates because of inflation but gold should remain constant. However, because of the run on gold, it will often be higher in price than it should be. Time to sell.

One other thing to consider: If gold is in the form of a coin, the coin’s numismatic value can move separately from the metal the coin contains. For instance, if a coin only has a small number minted during a particular year, that set of coins should appreciate in value faster than a year with a large number minted.

In my opinion, if you really, really want gold in your portfolio, U.S. Minted gold coins at MS-70 grading is the way to go. Diversify across years, types, and maybe even metals.

Oh, and because gold will not appreciate in value (in theory), you should not have more than 10% of your total portfolio in gold.

You will do much better in stocks.

Do you have gold in your portfolio? Let us know in the comments.

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