Don't count on gold for golden years
Since gold is currently a one company (one man) hostage, I would not count on it for anything
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Those living in retirement are often told to strike a balance between investing for safety and investing for growth. And when it comes to investing for growth, some pundits are fond of telling investors to put their money in commodities, including gold. Doing so, the experts say, is one surefire way to keep pace with inflation.
It’s also one surefire way to lose money as some retirees and would-be retirees are finding out today: Gold has fallen roughly $400 from its 52-week high of $1,803 to $1,420 and now, some say, might be a good time for retirees to revisit their decision to put their money at risk in commodities and gold.
Take a broad approach to commodities
To be fair, most advisers suggest that retirees and other investors ought to commit some of their funds to commodities. But they suggest doing so only after drafting what’s called an investment policy statement (IPS). And they also recommend against betting the entire portion earmarked for commodities to just gold. Doing that, they say, is pure speculation and folly.
“I think commodities are a great diversifier in portfolios because of their low correlation to stocks and bonds,” said Nathan Erickson, an investment strategy manager with Miller/Russell & Associates. “The data do show that including commodities in a well-diversified portfolio of stocks and bonds can lower overall portfolio risk,” said Erickson.
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