November 27, 2007: Gold?

I am not a direct holder of gold. I am comfortable with it not being in my portfolios except as part of a commodities or precious metals basket ETF. I have owned gold and other precious metal stocks.

Gold has evoked a great deal of emotion recently. To some people, gold is almost a religion (like Global Warming). And, perhaps in reaction to that religious fervor, other people find gold somehow to be odious; they would not buy it if it were recommended by a burning bush.

If you overload your portfolio with gold as an act of faith, you may jeopardize your financial security without advancing the "cause" of gold one iota. Or if you adamantly refuse to consider gold as an investment, you may forgo a valuable balancing element for you portfolio. I am happy to take this risk.

In either case, the investment slogans and cliches will provide neither wisdom or profit. "Only hard money will survive hard times" (Gold bugs) or "Gold pays no dividends or interest" (never buying Gold) are equally useless. And the cliche "you can't eat gold" is persuasive only to the gourmet investor who has mastered the art of sauteing stocks and bond certificates.

Consider gold the same as any other investment. A good thing in moderation for many investors, but not for all -myself included.