Gold: What a Boring Investment!

Wednesday, 15 August 2012
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Published in From The CEO

Everybody wants to make money, right?  Yes, but investing should still be fun.  After all, who wants to endure a daily slog through a bunch of numbers and theories and not be able to enjoy themselves in the process?


And maybe the entire “science” (or art) of investing is more than simple fun.  Perhaps you even savor the risk.  And just maybe your unfailing peek at the Dow Jones and S & P indexes every morning is … well … kind of a delightful addiction.

Now if that’s the case, you’re not going to fair too well investing in gold.  The yellow metal, the actual physical metal, is much too time-tested and predictable for you.  Buy and hold, buy and hold, buy and hold.  What kind of sleepy investment strategy is that?  Some might even call it … let’s face it … downright boring.

But you – yes, you – you stealthy financial wizard with your investment newsletters piled high on your breakfast table – you refuse to settle for predictable, time-tested and boring investments, don’t you?  You’re awash in a sea of paper and stock certificates, proud of your ability to navigate the glut of information and hell-bent on getting rich.

Imagine all the choices of company stocks you have!  Over 8,000 on the NYSE Euronext exchange, over 3,000 on NASDAQ.  And if you run out of choices, don’t forget The Toronto Exchange, The London Stock Exchange, The Tokyo Stock Exchange and myriad other choices in Europe and Asia.

Oh, and if you have difficulty picking and choosing, ask a stockbroker (commission vested interest), registered investment advisor (fixed fee vested interest), consult a newsletter (subscription fee vested interest) or just work it out for yourself as an e-trader online.

Confused?  Try sticking to a particular investment theory or principle to guide your choices.  You can approach the market from the perspective of the efficient market theory, the random walk theory, Benjamin Graham’s theory of underrated stocks (Graham was Warren Buffett’s teacher), market timing, diversification or sector rotation.  Or, you can elicit stock market advice from your rich, cranky uncle.  Are you having fun yet? 

Oh, and just so you won’t approach this 800-pound gorilla unprepared, be aware that if you go by the efficient market theory, the price of the stocks you choose has any extant information already built in.  Simply put, your favorite newsletter or your rich, cranky uncle will have to give you hot tips not already factored into the stocks you choose for you to make a go of it. (How’s that Facebook investment working out for you?)

Are you woozy from the joy ride yet?  Is “boring” starting to sound a little more tempting? If so, you might want to heed the sage wisdom of Paul Samuelson, the first American economist to win the Nobel Prize:
“Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.”

If Samuelson’s wisdom makes any sense at all, maybe it’s time for you to think seriously about acquiring gold – the physical metal itself.  The price is right and the season is right.  You’ll be getting in just before price levels ratchet up.  Far from being the new investment kid on the block, gold has been a source of value for thousands of years.  While some of its current fundamentals and technical indicators are not to be discounted, your main investor marching order will be to heed rampant printing of paper money by our Fed and other central banks of the world.  And we’ll be keeping you up to date with these developments right here in The Investor’s Corner. 

Here’s to more boring and profitable investing!

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Trevor Gerszt

Trevor Gerszt has been passionate about gold since childhood. Growing up in South Africa, the world’s second largest gold producer, Gerszt spent his youth collecting gold coins. Surrounded by a family of experienced coin collectors, he gained valuable insight about the precious metal.