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What Does Dave Have to Say About Investing in Gold and Precious Metals?

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What Does Dave Have to Say About Investing in Gold and Precious Metals? What Does Dave Have to Say About Investing in Gold and Precious Metals? *Go to www.daveramsey.com, click on Tools, click on Ask Dave, and then separately type in the following key words in the search box to locate these and other related articles: 1. gold, 2. silver, 3. precious metals Gold is Good? QUESTION: A listener says a lot of people are asking about gold investments. Is this a good idea? ANSWER: It’s a bad idea to invest in gold. Everyone’s talking about it right now because gold is really high. In the book, Stocks for the Long Run, Jeremy Segall has a graph that shows what would have happened to a single dollar invested in gold, bonds and stocks since 1801. One dollar invested in bonds in 1801 would yield $13,975 today. One dollar invested in stocks in 1801 would be worth $8.8 million today. One dollar invested in gold in 1801 would be worth $14 today. Does Gold = Good? QUESTION: Kevin asks if gold stocks are a good investment. ANSWER: Gold is never a good investment. You need to do all your investing based on the long term – five, 10 and twenty year track records. Gold – any way you analyze it – has a horrible twenty-year track record. It is a high-risk investment and it’s a risk you should not take with your money. Investing in Gold QUESTION: Listener asks if it's good to have gold bullion as part of your investment portfolio. Dave doesn’t recommend it. ANSWER: It’s got a horrible track record. It’s averaged 4 percent over the last 50 years. I wouldn’t own gold or any precious metal as part of my investments. Why Does Dave Diss Gold? QUESTION: Mac in Florida has noticed many people pushing gold as an investment, and wants to know Dave's thoughts on it. ANSWER: It sucks. Gold is a horrible investment. It's speculating in precious metals, and you're going to lose you butt when you play with gold. The deal with gold is really simple. Gold has a 70-year track record of 4.2% returns. That's about the rate of inflation. It's awful. All the rate of return that gold has made has been in the last seven years, and even then it will go up and down and up and down. It's very volatile. If there are any end-time conspiracy theorist nutburgers who think that gold is stable and will cover us if the economy collapses, I tell you that gold and money are spiritual. Gold is only as good to you as someone else is willing to take it as payment. There is no guarantee that someone will take it as payment. When Hurricane Katrina hit New Orleans and that economy collapsed, the first thing that happens is commodities become valuable. Paper money isn't valuable and gold isn't valuable. A bottle of water, a tank of gas or a pair of blue jeans in that mess was a big deal, but a bar of gold wouldn't have gotten you anything. People are after survival in those situations. The idea that we return to the gold standard after a crash is bogus. Investing In Silver QUESTION: Mark asks about silver as an investment, since he was talked into it. It’s worth $7,900 and he doesn’t know if he should keep it. He makes $50,000 a year. Dave tells him why playing with silver is like playing blackjack ... not good. ANSWER: When you play precious metals, you are gambling with about the same odds as playing a blackjack hand. You are not investing … you are speculating. This thing can go south on you in a hurry. This is gambling, and I would get out of it. Silver Stinks QUESTION: Michelle asks Dave what he thinks of silver being a good or bad investment. Dave tells her why he wants no part of it. ANSWER: I don’t buy any of that. Those are called precious metals or commodities, and they are extremely volatile. I don’t buy collectibles or coins or cars as an investment. It’s got a horrible long-term track record with extreme volatility. It’s one step from a total gamble. .
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