A Little Sparkle to Your Portfolio

Gold

I am not a gold bug.  Gold is just another currency like the Euro, Dollar or Yen.  Banks, Central Banks, Individuals and Countries own it.  It is a store of value.  You should own some too.  It can’t be printed, but more can be found which has the same effect on the price of gold as printing currency.

In and of itself it is a worthless metal.  It is too soft for coinage and almost all industrial uses.  It does not corrode and is a good conductor of electricity.  Yet it has few uses other than jewelry. 

In review you now have 5 stocks.  Consolidated Edison Inc. (ED) or another utility, Kraft Foods Inc. (KFT) or another food stock, Eaton Corp (ETN) or another industrial stock, and U.S. Bancorp (USB) or some other financial (Bank) stock of choice, an oil or gas my recommendation was Chevron Corp (CVX).  Last pick was an metal stock my recommendation was copper ore Freeport-McMoRan Copper & Gold Inc. (FCX) but any metal mining sector stock would do.  Remember you can own any stock in the sector not the one I recommend.

I am not recommending a stock this post but a ETF.  Most of the ETF’s I don’t really like much.  This one is an exception for many reasons.  This fund owns the actual gold bullion.  You thus own the gold but don’t have to store it, liquidate it at a coin store, etc.

I want to recommend you own some gold.  My brother actually does own gold the medal.  He stores it and buys the coins.  He has both bullion and the newsmatic coins.  By all means own one of each.  Nothing is prettier than a gold coin.  Buying a collector coin or bullion coin is easy, the storing and licquading the investement is very difficult, and for that reason I recommend the ETF. 

This is the most beautiful gold coin the United States ever minted!  In my opinion buy this one if you are going to own a newsmatic coin.

You could own a gold miner, but why?  Gold mines are difficult to make a lot of money in for several reasons.  First gold mines are sometimes in unstable and / or dangerous parts of the world.  Second mines get strikes, flood, blow up, run out of ore or the ore gets to be a lesser quality, etc.

I recommend buying the ETF.  I like the SPDR Gold Shares Trust GLD.  There are other EFT’s in gold, just make sure yours can be sold easily on the open market and it owns the actual gold.

The GOP would like to go back to the Gold Standard. 

http://www.cnbc.com/id/48776347  It just shows how unhooked from reality they are.  Like the Missouri Representative Todd Aki’s statement views on rape, he must believe that only witches float, because he does believe that "legitimate rape" does not lead to pregnancy.  He is on the House science committee no less.  Like Representative Aki’s statement is not science the belief that the gold standard will work is not economically sound. 

Early American had two things a drastic boom and bust cycle, and a majority of Americans lived on farms and their houses were paid for.  So during a bust it was back to eating the food you grew yourself.  The SS Central America sank in September 1857, along with more than 30,000 pounds of gold, causing to the Panic of 1857. In the early 1850s, there was much economic prosperity but the loss of so much gold was a factor that along with the general economic slowdown (business cycle) caused a depression.   The agricultural economy suffered little whereas the economies in the large cities made a slow recovery.  No reason to go back to being yoked to gold, other than looking good it has few uses.  http://www.washingtonpost.com/opinions/no-golden-opportunity/2012/08/29/3e7de69c-f1e1-11e1-892d-bc92fee603a7_story.html  Wonderland revisited with the GOP and Ron Paul.  http://www.cnbc.com/id/48831068    http://video.cnbc.com/gallery/?video=3000111539&play=1

Could some adults be invited into the GOP?  Time to use real science not the pseudo-science and hate of the very vocal minority of Americans.  11% of American’s agree with Todd Aki, and no economists agree with the going back to the Gold Standard.  I will make you a bet, if the GOP wins, they will form a committee and study going back to the gold standard just like they did in the 1980’s.  The committee will find that it is unfeasible and recommend we do not.  A plant on their platform designed to confuse the uneducated.  Remember most of the National Debt was created during the Bush years with the GOP controlled the White House and congress.  The gold standard is what the uneducated think will force a balanced budget, it doesn’t just study History most of the history of mankind we were on the Gold Standard and governments overspent.