Buying gold as investment hedge

Factual Questions
#1

Perhaps this belongs in IMHO, and if so Mod, move it.

I’m pretty pessimistic about the stock market in the future for some time. I’m retired and living on a pension and social security, so all our other savings are in stocks and bonds. We never have to touch the principal. We won’t need these stocks and bonds but I want some protection for what will be left to our kids when we go to the Happy Hunting Grounds.

I know that it is advised to have perhaps ten percent in gold as a hedge for inflation, but from what I can see will happen in the future such as the market continuing to decline, the govt printing more money for useless bailouts, etc, I see a very long period of hard times.

I’m thinking of converting some stocks (taking a deductible loss on the tax forms) and putting it into gold, bullion or coins. I know gold prices can fluctuate, but from what I can foresee, as a complete amateur, is that it is likely to hold value or increase in the next few years.

Is there any consensus among financial people as to the advisability of increasing personal investments into gold?

Any particular coins better than others, such as the American Eagle vs the Krugerrand?

#2

Gold is at a high point, and you lose both when you buy , then when you sell.

My suggestion is getting bullion coins with no worries about grading.

#3

DrDeth is right. You pay a commission when you buy and when you sell. And while you hold the gold it will probably cost you to store it (say, in a safe deposit box).
You have stocks and bonds? That suggests you have a broker. If you feel a little gold in your portfolio would be a hedge, you can get an ETF (exchange traded fund) that directly reflects the gold index. It’s symbol is GLD.
Do some homework first.

#4

Yes ditto Doug Bowe. Look at GLD. You can buy and sell it just like a stock and it closely tracks the cost of gold on the global market.

And it doesn’t weigh anything :slight_smile:

#5

You can also buy stocks in gold-mining companies if you’re looking for a little leverage. It strikes me though that investing in gold is worse than currency speculation, with no readable fundamentals to base your decisions on. OTOH, I’m a rank amateur, and some very smart people have been moving into gold.