Can Gold Save You?

Many clients ask me about gold.  Should they own it?

I typically ask them why they are considering adding it to their portfolio.  I’ve found that the reasons people give me vary. When they say they want to buy gold, there’s some deeper issue we need to get at so I ask what about gold appeals to them.

Sometimes the answer is that the price is low right now. Sometimes the response is that they want to earn more than they can from bonds. Or they believe there’s always a market for gold, no matter what happens.

In many cases people want gold in case all hell breaks loose. It makes them feel safer than boring bonds. I can understand where they’re coming from. Bonds are almost purely conceptual because most people don’t ever

get a piece of paper saying they own them. These people want gold so they can make a run for it if necessary.  I understand: I like feeling safe, too.

If you’re in this camp take physical custody of it. It’s not going to help you if it’s stored in a vault out of state.  Put it in your safe at home.

But remember the practicalities. Small coins will probably work best; you don’t want to be stuck trying to get change for $1,000 gold bars when the banks have closed. Gold weighs a lot so just buy enough to get you over the border. You don’t want your stash to slow you down when you’re sneaking away in the middle of the night.

Still not feeling secure? To take the next step down this road, add the following to your safe: guns, ammo, water, and copy of Mad Max or other favorite movie of this genre. The Book of Eli was okay and 2012 was even better!

However, none of these movies features a post-apocalyptic gold standard. According to them, if and when all hell breaks loose, you’ll want guns, ammo, gasoline, and perhaps a jet.

— Nikki Earley