Could Gilda Radner’s 1970s Saturday Night Live character Emily Litella now be a precious metals advisor?
As gold gives back more of its small August gains, online pundit claims of imminent financial catastrophe seem to be rapidly evaporating today.
I checked Kitco and found that gold is trading at $1,112.50 a troy ounce.
If the precious metals pundits now say “never mind,” it won’t be funny.
However, of course, most precious metals financial pundits never say never mind.
Gold is always going to soar to $5,000 or $10,000.
In 2011, when gold was briefly trading above $1,900, higher numbers seemed plausible, even imminent. The markets had other ideas and we are still waiting.
This is why investment decisions made day by day according to headlines is a fool’s game.
The basic case to buy gold is that governments over time issue more and more unbacked currency.
If they happen to overdo it, as is the case currently in Argentina, or in 1990s Brazil, or Britain and America in the 1970s, gold benefits. The price rises.
This is a long-term bet, or hedge, or investment. Pick the term you like most.
Anyone who bought gold in 1968 is happy today. For U.S. buyers, this would have been in legal pre-1933 coin form, not illegal bullion form.
Gold bullion became legal to own on the last day of 1974.
Anyone who bought it on that date, or in 1978, 1988, 1998, or even 2008, has a profit to show for it.
We have lived through tumultuous times since the 1960s.
Owning gold can confer peace of mind.
Owning nothing but gold confers endless worry. You become a hostage to headlines.
You also have to eat, pay the mortgage, send the kids to college, live your life.
Selling gold to meet daily expenses would be quite a hassle and in a down market it would rub in your “mistake” each time you sold off a little more bullion.
Gold can enrich your life if you follow the traditional financial guidelines of putting no more than 10 percent of your financial assets in the metal.
It is a long-term store of value. It is insurance. It is a rock in a financial storm.
Imagine owning gold since 1968 and having to think about it every day. Is that the kind of life you want to live?
It might be if you take my advice and own gold in the form of numismatic coins.
Put a collection together. Have fun with it. Make it a personal challenge to put some sort of set together. Learn the rich history of the coins you do buy. Make interesting friends in the process when you join a club, or go to shows.
But don’t violate the 10 percent rule unless you are so good at trading that you ought to be a coin dealer. You might be that good. But most gold owners will not be.
What most gold owners can have is peace of mind.
They won’t have to read every headline, cheer for America’s enemies, or see destruction in every Wall Street hiccup.
Gold bullion is important, but don’t make it the center of your life any more than fire insurance or life insurance is, or you will eventually consider it to be a four-letter word.
Buzz blogger Dave Harper has twice won the Numismatic Literary Guild Award for Best Blog and is editor of the weekly newspaper "Numismatic News."
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