Which is the better investment : Stocks / bonds or gold?
is life really hell in Hell? asked:
I have over $40,000 in stocks and bonds. I’ve noticed that in some recent reports that I’ve received that they are losing value. I am thinking of converting them into gold. Is this a good idea or not, and why?
By the way, I am 56 and the funds I am mentioning here represent the bulk of my retirement funds..
This entry was posted
on Tuesday, February 10th, 2009 at 12:00 am and is filed under Investing.
You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.
I have over $40,000 in stocks and bonds. I’ve noticed that in some recent reports that I’ve received that they are losing value. I am thinking of converting them into gold. Is this a good idea or not, and why?
By the way, I am 56 and the funds I am mentioning here represent the bulk of my retirement funds..
February 11th, 2009 at 1:25 pm
You are then putting all your eggs in one basket: gold. Right now gold prices are high, but historically they fluctuate like everything else.
February 13th, 2009 at 9:05 pm
Stocks & Bonds - in my opinion. Gold is VERY expensive now - most expect it to drop, not continue up.
Look into,, and other sites that help you to analyze the business fundamentals … pick a company that is financially sound.
Bonds are safer - but where there’s less risk, there’s less reward. As interest rates go down, bond values go up … and, most think the Fed. Reserve is likely to lower interest rates soon. BUT … watch the rates, because as interest rates go up, your bond value goes down.
Good luck!
February 15th, 2009 at 7:11 pm
You’re 56 and could have another 40 years of life so don’t be too conservative although you do need some cash for the short term. Gold is a horrible investment, use it only as a hedge against inflation. You need to save a lot more before retirement and max out your returns if you want to retire comfortably. Stocks are the best investment but the booming stock market is numbered so don’t go crazy. I’m not a financial planner so seek one for further advice.
February 18th, 2009 at 4:13 am
Good question, you are right to be concerned. Lately there has been a ‘correction’ in stocks, and bonds have been doing well. Gold is at all time highs due to the fact that most people view it as a safe way to hold your money during economic recessions and a dollar that is weakening. There is no better way to achieve superior gains than in stocks though. With this correction that we have experience we believe that there are now valuable opportunities in stocks. A good source for info on stock suggestions and model portfolios that may meet your needs you should check out they have a pretty good track record for choosing the right sectors to be in…. hope this helps
February 21st, 2009 at 7:37 am
If you want to invest in gold, the smartest way to do it is to buy gold stocks, or even better a gold ETF (index.) It’s a group of many individual gold stocks.
If you are in Canada, one gold index is ca:XGD. There are plenty so you should easily be able to look up one in the US too.
- Physical gold doesn’t pay a dividend
- Physical gold is harder to “cash out”
- Physical gold is risky and costly to store
- Physical gold will grow in value slower than gold stocks.
There are only two reasons to have gold in your hands, really:
1. To impress your friends
2. If you are certain the economy is going to collapse or the world is going to end.
In case number 2, you’re better off investing in a good gun and stockpiling ammunition anyway.
I don’t recommend buying anything gold-related until at least the end of January.
February 24th, 2009 at 6:45 pm
Both have their place in a portfolio. Stocks are for long term growth. Bonds are for protection, stability, and current income. You need a diversified mix of both. If you buy gold, buy only a small amount as another answer said to hedge against inflation. No more than 10% of your portfolio should be in gold. Good luck.
February 25th, 2009 at 9:05 am
Keep them there in stocks and bonds. Don’t speculate. Speculators never win. They might win 9 times out of 10 if they are lucky but that last time wipes away all previous gains. How would I know? I was a speculator who made 300%+ one year and then lost my ass off the next 4 years. And by speculating, I missed many great run ups by great companies.
Keep your money where it is. This is normal and it will increase at some point.
Don’t buy gold. If you want anything safer, buy PFE. The dividend is huge at 5.63% (flat tax of 15% on those dividends) and they aren’t going anywhere. Not much up but definitely not down because everyone needs their healthy pills.
By the way, gold hit its all time high today. Isn’t the idea to buy low, sell high???? How do you value if gold is a good investment or not? They have no cash flows or earnings.
February 26th, 2009 at 5:51 pm
As you can see by the other answers, there are are many opinions on the subject. Converting to gold does put everything in one investment and greatly increases risk.
There are two ways to invest: get a long term plan or become a trader. You can find professionals to do either with your money, but certain types of accounts require a minimum of $100,000.
Most people who try to trade are unsuccessful because they don’t put enough time into it and cannot handle the risks involved. Gold is a trading vehicle, not an investment. Unless you know when to buy and sell, you will see your $40K become $20K.
Unless you want to take several years to learn to trade, my suggestion is to interview as many as 10 brokers and ask them questions like…
What would you do with this money?
What will you do if the market loses 20% this year?
What will you do if the market gains 20% this year?
How do you monitor my account? (Brokers may have too many accounts to deal with).
The probable answer will be a mix of a few stocks, some funds, bonds, and possibly, some gold. Managed right, the mix may lose some money in bad years and gain more money in good years.
Good Luck
February 28th, 2009 at 2:20 pm
nothing last forever smarty
March 1st, 2009 at 6:28 am
Convert 25% of them to gold and silver. That way if the market keeps going badly, you’ll make up the difference in the gold and silver. Then sell it and put it back into the market in a year or so.