Beware the Gold Bug
Today's National Post column warns small investors against speculating in gold:
The price of gold has zoomed past US$1,000 an ounce, reaching an all-time record of US$1,070 on Wednesday. Suddenly, talk radio and cable television are jammed with ads urging small investors to buy coins and bars. One vendor pushes its product with this amazing slogan: “Gold has never been worth zero!” (You’d think the more relevant question might be: “Has gold ever been worth less than I’m about to pay for it?”)
Gold is a strange investment vehicle. If the typical small investor were to hear a pitch for investment in copper, zinc or molybdenum, he or she would probably react negatively. “The metals market? Are you crazy? That’s no place for me.” But if the metal is gold, suddenly everybody wants to play.
Read the rest here.