Why Own Gold (And Silver)?
Fewer investments get the emotions going on either side of the argument like precious metals, specifically gold and silver. The bulls and the bears have been arguing about this metal for thousands of years I’m sure, and I admit I’ve argued plenty with people I know recently. This post aims to put some objective insight into the bullish case of owning gold and silver.
Here’s what I believe:
- There are very sound fundamental arguments for owning gold and silver right now
- Precious metals are not the same type of asset as stocks, therefore comparing a company like Microsoft to gold is sort of stupid. Yes, I’m fully aware that gold doesn’t produce cash flows and finding a valutions based on future cash flows is impossible. This has no bearing on whether or not gold is worth owning.
- Gold and silver are forms of money more than anything else. You don’t diversify stocks with gold, you diversify your cash with gold. And, when we’re printing billions of US dollars every day, you can easily make the case for owning gold.
People often think I argue for owning gold just because I like gold for some strange reason. Maybe because it’s so pretty or something. That’s stupid.
Here’s why I own gold…. drum roll please…
Because I think my gold will be worth more in the future and buy me more assets than if that money were in cash.
Boom. There it is. My ultimate aim isn’t to own gold. My ultimate aim is to own as much productive assets as possible in the future.
I think productive assets will get less expensive in terms of gold as time goes on for the foreseeable future. To a larger degree than US dollars. Those assets might be stocks, businesses, whatever.
Do you get it?
Now you know why I own gold/silver.