Are Gold Mutual Funds a Good Way to Invest In Gold?
Recently, a client explained to me how he thought gold was a good investment and protection against inflation. I’m not going to talk today about if he is right or wrong. Instead, I’ll mention that his fabulous do it yourself investment solution was Fidelity’s Gold Fund. Good call? Gold Mutual Fund Holdings Well, it came as quite a shock to him that actual gold is only the sixth biggest investment in the fund. Five bigger investments in the mutual fund are in companies that have something to do with the gold industry. Granted, those companies’ stock prices will be heavily influenced by the price of gold, but certainly not on a one-for-one basis, and it is very possible for gold companies to have problems (and thus lower stock prices) unrelated to gold prices. If the point of investing in gold is to get an alternative investment from the stock market itself, investing in the stock of gold-based companies does not achieve that goal. — Is Bitcoin better than gold for this purpose? Gold companies are very susceptible to environmental lawsuits and regulations. Not to mention, gold happens to be mined in some very unstable countries throughout the world. A military …
