does ron paul invest in gold

Why I Don't Invest in Gold
There's nothing magical about gold. The money you invest will yield greater returns with an economical S&P 500 investment than a handful of gold coins.

The investment in gold will cost the investor storage charges, capital gains taxes as well as a performance lag within the portfolio. Additionally, it's not the best protection against rising inflation.

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does ron paul invest in gold

1. It's a store of value
Gold is often seen as a hedge against inflation and uncertainty that could make it a desirable option to add to your portfolio. But, they should be considered an asset class offering stability and diversification and not as a means to grow wealth.

There are a variety of ways for investors to get into gold, such as physical bullion, coins and jewellery, as well in exchange-traded funds (ETFs) and shares of businesses that mine or process the precious metal. In generally buying physical gold requires a significant up-front investment. It does not offer any income or yield that is not feasible for those with limited funds or who prefer to invest in investments that generate an income stream that is passive.

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Moreover, trying to time the price of gold is extremely risky since the prices of gold are volatile over short periods of time, and they do not necessarily outperform other investments in long-term price growth. Therefore, it is important for investors to consider their longer-term investment goals in deciding whether to add precious metals into their portfolios.

While it's true gold has traditionally held its purchasing power in periods of high inflation, it's crucial to keep in mind that the commodity does not provide any income or returns and is therefore less attractive to those looking for stable sources of cash flow and growth over time.

2. It's a product
Gold has long been seen as a secure investment and many investors prefer to purchase it in times when there is uncertainty in the economy. But, is it truly an investment that is worth its weight in gold? In this installment of Commodity Culture, we'll dig into the mystery, allure and history behind a shining metal that known as the Incas described as "the tears of the sun."

One of the main reasons investors invest in gold is in order to protect themselves from inflation. The theory is that if currencies become shaky or whole economies collapse, then gold will be seen as a safe alternative. There are however many issues with this theory.

First, it's important to be aware that gold is a commodity, which means that its price can fluctuate based upon demand and supply. This is why it's difficult to forecast its future price. Furthermore, the storage of gold can be expensive. It should be kept in a safe location and isn't always simple to trade. Plus, unlike shares and bonds, holding gold does not contribute to any economic development.

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why should you invest in gold

The fact remains that gold has a bad track record as an inflation hedge. For the past 30 years that has seen stocks outperform gold on every standardized return indicator, even inflation. Therefore, unless you're an investor or trader, investor, there's no reason to hold gold as an inflation hedge. Instead, look for more suitable alternatives to physical gold by purchasing a gold-backed fund. It will take away certain disadvantages associated with buying bullion.

3. It's a hedge against inflation
For investors, gold has historically been a compelling investment in wealth and an inflation hedge. During the Gold Standard period in the beginning of the 19th and 20th centuries, most major currencies were tied against and secured by gold. While fiat currency has long since replaced the gold standard, in the course of time, an ounce of gold has remained in line with inflation.

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In the end, most investors keep a portion of gold in their portfolios for this motive. With inflation reaching its highest in over 40 years, safeguarding against falling purchasing power is at the forefront of mind for many.

This is why you'll see so many late-night infomercials hawking the benefits of having a bags or gold-colored coins. These ads are built on fear and not facts. Actually, the stock market has trounced gold in every standardized returns, adjusted for inflation over the past three decades. The same is true for the recent months as inflation rose to four-decade highs.

Smart investors could instead opt to use Treasury TIPS to safeguard themselves from inflation. They pay more prices when inflation is rising as well as have a better track record than gold over the past three decades, as per data from MacroBond. Investors should look at every option and pick the type of investment that best suits the risk profile of their particular investment horizon and other goals.

4. It's a speculation-based investment
Gold is one of the most sought-after investments among investors since it's been viewed historically as a secure asset in periods of uncertainty in the economy. It is true that investing in gold isn't always the right move for everyone. Gold can be a useful diversifier for a portfolio, but it's not an ideal investment vehicle if you are seeking to make the most of your investment.

Gold bulls like to point at the fact that the metal has in the past outpaced inflation. They tend to be selective with their data, choosing snippets of time where that may be the case, but in the long run in the past, gold hasn't generally outperformed bonds or stocks when viewed in a risk-adjusted situation.

Additionally, the expense for holding gold may eat into your return. There are costs associated with storing and protect your investments that are not included in the cost of the metal that you purchase through the exchange traded fund (ETF). If you buy gold direct through a retailer You'll have to cover premiums, fees as well as commissions.

Moreover, the gold market can be highly volatile and can cause significant loss. This is why it's not appropriate for beginners as well as you must be aware of the potential risks inherent in this risky investment. Gold mining can assist you in conserving your money and diversify your portfolio, but you must understand the role this investment plays in your overall financial plan.