Hi Grace,
I own some gold and I can tell you that if I didn't my total return for the year would be far better then it already is.
From my personal perspective, your reaction to gold's performance within your total portfolio might be a tad stringent.
If you were to have purchased gold (either paper gold such as mining stocks, or physical gold) with the intention that the metal would rise in price, and you would subsequently sell at a later date for a profit, then you're likely correct to include gold's price movements in calculating your total portfolio return.
For myself though, I look at the ownership of physical gold as a sort of insurance policy, something that I fully expect may actually cost money, rather than realizing an expected rate of return on the metal. When/if I were to buy physical gold, I view it very strictly as an "insurance" hedge against the remote possibility of a fiat currency failure or a global currency crisis. The gold is intended to be used merely as a "currency" to bridge a gap between a time of instability to a time of more stability regarding any potential currency crisis, or a crude form of insurance in my point of view.
I am quite prone to suggesting to most folks (who ask) that everyone should own some physical gold. The amount doesn't have to be tremendous, merely sufficient to cover one's personal needs for a short time frame in the event of an emergency, perhaps a few thousand dollars worth of gold being adequate in most instances. Yes, the value of the metal will fluctuate over time, but the proposed purpose is for insurance, not capital gains.
Just my viewpoint on the exchange of posts up to this point...
KJC |
