367: Is Buying Gold a Good Idea or Not?

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When new listeners of Wealth Formula Podcast tell me they started from the beginning to catch up, I cringe a little bit.

It’s not that the original material was bad. For me, it’s just like looking at pictures of guys in the 80s with feathered hair (Think Dukes of Hazard). Or guys with perms.

At the time it seemed like a good idea but it isn’t anymore. But then again, maybe it will be back in vogue again in the future. (P.S. PLEASE MOM JEANS BE A THING OF THE PAST!)

Like hairstyles through the decades, my views on personal finance have changed with time and some have gone full circle.

Was I wrong before and right now? Not really. My perspective is just different. And, I suspect 5 years from now I will, again, cringe at some of the things I am saying today.

Like many guys approaching 50, I am becoming a little bit less dogmatic about my opinions than before— a little more open-minded.

For example, I no longer look down on people who invest in stocks and bonds. In fact, it might not be a bad idea to grab a Vanguard index or two while the markets are in the toilet.

That said, I’m still deeply dedicated to the alternative asset space. At my core, I’m a real estate guy but I’ve even opened up to other alternative assets lately.

You know I like my ATM machines, but have now begun dipping my toes into private business—random stuff like cargo ships and trade finance in the Middle East.

My opinions on gold as an alternative asset have been the most dynamic throughout the years. I started out telling people to buy gold and to load up on silver dollars.

I was telling people to buy monster boxes of American Eagles in preparation for the Zombie Apocalypse—because everyone knows Zombies only accept silver coins as tender.

Then one day I became violently against buying precious metals. I didn’t see the point. What do precious metals do that real estate does not? Both are physical inflation hedges but real estate cash flows and has tremendous tax advantages. The IRS code for gold profits is downright punitive. And where would I bury it?

Then some banks started failing and I started to see a glimpse of the doomsday perspective again and it started to make more sense to own some gold. To be clear, I still don’t own any gold now. I just have that monster box of silver coins sitting somewhere in a nuclear bunker.

So now, I’m back in the camp of “maybe I should buy some gold”.

But… I’m still not sure. I’m listening and reading to a lot of people on this topic. One of the more respected gold bugs out there is Brien Lundin. Brien is a very rational guy on the topic and has a great newsletter to boot.

This week on Wealth Formula Podcast, I pick Brien’s brain on the whole topic of gold again. It’s a conversation worth listening to.

Listen NOW!

With a career spanning four decades in the investment markets, Brien Lundin serves as president and CEO of Jefferson Financial, Inc., a highly regarded producer of investment-oriented events and publisher of investment newsletters and special reports. Under the Jefferson Financial umbrella, Mr. Lundin serves as publisher and editor of Gold Newsletter, the publication that has been the cornerstone of precious metals advisories since 1971, and as the host of the annual New Orleans Investment Conference, the oldest and most respected investment event of its kind.

As editor of Gold Newsletter, Mr. Lundin covers not only resource stocks, but also the entire world of investing, from small-caps of every type to macroeconomics and geopolitical issues that ultimately affect every investor. As host of the New Orleans Investment Conference, Mr. Lundin has annually brought the giants of investing, economics and geopolitics together in intimate presentations with many of today’s most sophisticated private investors. In all of these endeavors, Mr. Lundin has striven to burnish the brilliant legacy of the late James U. Blanchard III, his great friend and the founder of both Gold Newsletter and the New Orleans Investment Conference.

Shownotes:

What gives gold its value?
Physical gold versus gold stocks
The New Orleans Investment Conference
Why should you consider owning more inflationary-hedged assets like gold and real estate?