You could make some money on gold today. But if your motivation is to make a quick buck or is out of fear in the value of the American dollar then you’re investing for the wrong reason.
Here is how it would likely play out
- You buy the gold today and watch the market kick up for a while
- You get comfortable with the price and stop watching
- You don’t hear about the price going down the toilet until it gets to a level that is newsworthy
Because you stopped paying attention to it, the price went down and you didn’t sell it when it made sense. Awww pooh.
The unseen cost of buying gold
Another downside is you could have been watching it every single day, pulling your hair out every time the price dipped 1/2%.
The time we spend on our worries, especially when it comes to personal finance and investing, can cost us in many other ways. The stresses that come with debt or wondering if we will have enough at retirement can be more damaging than the problem itself.
I don’t know about you, but my idea of investing doesn’t include worry.
How we invest
My wife and I buy mutual funds. We have a small variety of investment vehicles: A couple 401(k)s, three IRAs, and an investment account. We experienced the Great Recession yet our accounts are bigger than they were 6 years ago.
- Two of our accounts are held by our Financial Planner
- Two more are through company retirement plans
- The rest we are doing ourselves.
Only two of our assets are not mutual funds: Our house and twelve share of Boeing stock. The rest are a mix of different asset classes through Merrill Lynch, Vanguard, American Funds, Principal, and *Betterment (affiliate link)
Reviewing investments (paying attention)
The types of investments we own do not require much time or effort to review. Quarterly statements line our mailbox every third month and the assets they hold inside of them don’t change as often as the seasons do.
We still review them to make sure nothing is too wacky and it takes less time than pizza delivery from Dominos. (Mmmmm, pizza)
Pay attention to your investments and buy things that aren’t as volatile as precious metals. Not only will you make more money over the long haul, you will have spent more time on life instead in the Money section of USA Today.