Gold Gold Gold. Is it really a good inflation hedge?
February 8, 2009 – 10:11 pmI am not a gold bug. And this is not a pitch to convince any of you to go out an buy gold. There has been a lot of discussion about buying gold as an inflation hedge lately, however, and I thought it might be worth a post or two to discuss gold from a couple of different angles.
Disclosure: I do not own any physical gold (besides by $100 wedding ring), and I don’t own any precious metals stocks (unless they’re hidden within the mutual funds I hold).
So is gold a good inflation hedge?
The short answer, based on my research, is no. Mish put together a great post on this over at GlobalEconomicAnalysis which is worth a look. The charts are especially telling.
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One Response to “Gold Gold Gold. Is it really a good inflation hedge?”
I wouldn’t hold a huge portion of gold, but it should be an cornerstone in a diversified portfolio in my opinion. Look at it’s performance over the past 5 years; it’s easily trumped stocks.
I also think it, along with silver, makes a good worst-case scenario insurance to actually hold in your possession. The chances of a complete financial meltdown are hopefully remote, but I feel some comfort by holding some bullion securely where I can access it quickly.
By Blake@youngdough on Feb 9, 2009