Last Updated on October 9, 2020
The good thing about gold is that it is liquid — you can cash out immediately at any coin shop and many banks. Unlike stocks, bonds and paper money, it will always be worth something. It requires no care or management. You can stash it where only you have access. The price of gold over the years correlated closely with interest rates. When interest rates are low, the carrying costs (lost interest) are low. Thus at a time when interest rates will probably rise, it is likely that “all other things being equal” the price of gold will drop. On the other hand, prices of commodities almost always go back to and surpass old peaks.
Monetary instability, threats of conflict, and a declining stock market usually means gold will be getting more valuable (in terms of paper money). Why? Because gold hidden in a buried tin can means security to many people. Paper money has a way of becoming worthless. In fact, the USA dollar has done better than most currencies losing “only” 98% of its value in the last 100 years.
Now you have the facts. Should you buy gold now? In my opinion “some gold coins” Yes! — Especially if you are retired — because anytime is a good time to put 10 to 25% of your assets in gold. Gold is for retrenchment. For a rainy day. If you are an entrepreneur or have a going, expanding business that will give you a good return on your money, don’t have much gold, 5% is plenty. Over time, gold should keep up with inflation. That means, in 100 years, your $10,000 in secretly stashed bullion gold coins should buy just about what $10,000 dollars buys today. Your $10,000 bank account probably won’t even exist.
I believe that you can never get rich with passive investments like stocks, bonds, commodities, gold. Active trading in these things is the path to poverty. You make money by providing goods and services that people need or by using your expertise to make deals.