Thinking About Investing in Gold? Think Again, Ep #41 

<p>Should you consider gold as an investment? In this episode of Retirement Made Easy, I address having gold as part of your portfolio. I’ll share facts, figures, and why I think gold should NOT be part of a long-term investment portfolio. I would actually exclude it if at all possible. Why? Find out in this episode!</p> <h2>You will want to hear this episode if you are interested in...</h2> <ul> <li>[2:50] Gold is simply a commodity</li> <li>[5:05] Is gold a hedge against inflation?</li> <li>[8:15] Gold versus the S&P 500</li> <li>[10:45] Commodities are taxed differently</li> <li>[13:35] Better investments than gold</li> </ul> <h2>Gold is a commodity</h2> <p>Buying gold is buying an object. Beanie Babies were a commodity when I was growing up. People thought they could buy them at a low price and sell them for 10x what they paid. They thought they’d get rich quick. People treat gold the same way. They think gold will double in price and they’ll get rich. But the only way you can make money is if the price per ounce rises.</p> <p>Let’s say Gold is at $1,700 an ounce right now, if it doubled, you could sell it for $3,400 an ounce. Additionally, gold doesn’t pay a dividend. It’s not paying you any interest while you hold it. You can’t make money off of it <em>unless you sell it</em>.</p> <h2>Is gold a hedge against inflation?</h2> <p>Many people think that gold brings stability to your portfolio or that it’s a hedge against inflation. But what does the past tell us about gold? An ounce of gold was $850 in 1980. Today, that same ounce of gold sells for $1,700—so it doubled in 40 years. But what is the annual rate of return? 1.75% over 40 years. <em>That’s not very good</em>. </p> <p>According to <a href="https://www.officialdata.org/" target="_blank" rel="noopener">OfficialData.org</a>, In the last 40 years, the annual average rate of inflation was 3.21%. The gold you were holding was not a hedge against inflation. <em>You lost money</em>. If the cost of living went up, you need your investment portfolio to be matc