Many experts argue against buying the metal. So why are its fans still so enthusiastic?
It has been a tough couple of years for gold. The metal's price has dropped 30% from the record high it reached in the summer of 2011, providing ammunition for critics who say gold is too risky an investment because its price is too volatile and unpredictable.
Yet, gold enthusiasts are undaunted. They argue gold is an effective hedge against inflation and, despite its own volatility, it can help smooth out the overall volatility of a diversified investment portfolio. Some also see reasons for the price to rise significantly in the next few years.
The key, these financial advisers say, is to think long term, because over several years the benefits of owning gold will outweigh the occasional skittishness of the market.
"People have been second-guessing gold as a hedge," says Chris Hyzy, managing director and chief investment officer of U.S. Trust, the private-banking arm of Bank of America Corp. He recommends that investors include gold in their portfolios. But, he adds: "You have to take a very long view if you're a buyer or owner of gold today."
To read this interview in full please click here.
In September 2011 the Gold Bugs index, the HUI stood at 630 as gold prices peaked, since then both have trended lower with the HUI losing about 65% of its value. The bottom has been called a number of times and after such a dramatic decline its difficult not to think that we are there now. However, as we all know the timing of any investment is crucial to its success and that is exactly what we are trying to do here, trying to pick advantageous entry and exit points. If you would like to know which stocks we are buying and selling please join us at ‘Stock Trader’ our premium investment service.
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