Is gold a good long term investment?

With all the money the central banks around the world are printing, many intelligent investors are turning to gold as a hedge against inflation risk.

But, is gold a good long term investment?

Well, that depends on what you consider long term.

If you invest in securities with the Warren Buffett approach, you’ll find numerous investments that would trounce gold over most typical holding periods, five years, ten years, twent years, or even fifty years.

And, with any investment, timing is everything.

Sure, if you bought gold in mid-1999, your investment would be up six fold.. not bad.  But, if you had bought gold at a high it made in January 1980, you would only be up about two fold.

Since the Fed started printing money to bail us out of the recession caused by the bursting of the dot.com bubble twenty years ago, gold has been in a long term up trend.

However, it did go through a significant correction from its 2011 peak, and it has yet to surpass that peak.

Along the way, many blue chip stocks have not done all that great either.

For instance, IBM is currently trading below its level in 1999 when gold prices hit their lowest prices in the last forty years.

On the other hand, Apple is up about 150 fold since then.

With all this in mind, I don’t view gold to be a great long term investment.

However, under certain conditions that seem to be prevailing today, gold can be a solid hedge for your investment portfolio.

Looking at more recent gold prices, it’s pretty clear the correction/bear market that began in 2011 is over and a new bull phase has begun.

While gold prices may be elevated in the near term, they are still only about 65% above the 2015 lows.

In other words, if history is any indication, gold prices could have a long way to go to the upside.

This would also be the case with Silver prices.

Because silver is still used as an industrial metal, it can be negatively affected by economic weakness.

As the Covid-19 pandemic went into full gear, silver prices sold off sharply.  It is apparent that reaction was too severe, as silver prices have rebounded significantly in recent weeks, and appear to be poised to make another run at the $20 per ounce level.

So, where am I going with all this?

It may be a good time to check out the potential benefits of adding gold and/or silver to your investment portfolio.

Given that Washington, DC has already responded to the economic shutdown with over $2 trillion in stimulus money, and the Federal Reserve has expanded its asset base to astronomical levels, the shiny metals are starting to look quite interesting.

And, the Democrats in the House of Representatives just passed another stimulus package totaling $3 trillion.

These are mind boggling numbers, when in 2009, those of us who were worried about the national debt were fussing over Obama’s $900 billion package.

The only thing saving the U.S. from massive inflation is the fact that all the other developed countries in the world are doing the same thing, so the Dollar has not sold off.

Bitcoin and other crypto currencies are also benefiting from all this money printing as well.

Recently, I discovered Regal Assets, which is recognized as one of the top Gold IRA businesses in the country.

Regal offers investments in gold, silver and platinum, along with the major crypto currencies, and a number of the lesser known cryptos.

They’ll be happy to send you information regarding their gold kits and their gold IRA kits.

If you believe that high inflation is now inevitable, now is the time to check out some alternative investments such as precious metals and crypto currencies.