Monday, March 31, 2008

A Not-Investment Idea


Quote of the day:
““The Maasai of Kenya, soccer moms of Scarsdale, the Amish, the Inughuit of Greenland, European businessmen—all report that they are happy.”
--Sue Halpern in the April 3 New York Review

Now that I’ve gotten myself all worked up about what to invest in, I thought it was time to mention something not to. Or at least to be cautious about.

Gold. There is probably no investment whose cause is taken up by so many hucksters in so many varieties of garb. An excellent recommendation against gold is the scintillatingly obnoxious commercial with classical music and a woman intoning its other-worldly virtues in an oh-so-seriously-sophisticated British accent. If you haven’t seen this commercial consider yourself very lucky. It’s worse than head-on, apply directly to the forehead. Vomit city.

Precious metals and their associated stocks are perfectly valid investments. The problem is getting into them because of fear, or because you think they are “safe,” which is what that commercial is about. They are no more or less “safe” than any other investment.

With the economy having some trouble right now, a lot of folks have moved into gold, and the price has gone up significantly over the last several months. If you want to find a good time to buy gold this is not it. The price is high.

The same is true for most commodities and natural resources--including oil. The price on all these things may go higher--probably will, eventually. But a much better (less risky) time to buy is when prices are depressed--such as when the stock market is booming.

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