Money Matters: Gold and Silver
What is the fascination with gold and silver?
Well, it's been around a long time. You hear a lot, everyone is pushing it and most of my clients have some gold. There are arguments that it is a good hedge for part of your portfolio. Just to have it for the down turn of the market. If you listen to Warren Buffet, he is not a big fan. He has said he basically would rather own something that produces something. Like a stock that is producing dividends. I am not against it, like I said, a lot of my clients have it. The bottom line is you have to buy it right and you have to sell it to make money. There is always people pushing on the radio. Obviously they make money to sell it.
What is the difference between those two commodities?
They are both commodities and it's written that they are a good hedge against a down market and holding a hard asset but I think it's philosophically almost the same thing. Silver really doesn't produce anything. Years ago, as we talked about a little earlier, I think silver ran up to about $60 an ounce and because a lot of people were buying it and guy tried to corner the market. So the bottom line is, if you are going to turn it into a profit for yourself you got to buy it for less than what you sell it for. My clients that are retiring, I don't think gold is a good fit. You have to sell it to get that income. If someone is retired and need that income, you have an asset sitting here it may appreciate but you need the income.