Is now a good time to invest in gold?

(2:02) Hi, my name is Ron Blue, and I have been getting a lot of questions recently about investing in gold. This is not the first time I have gotten these questions. Back in the early 1980s, a lot of people were speculating in gold. Gold prices went to $800 an ounce, and then they fell, and it has been more than 20 years until they even came back to that level. But now a lot of people are saying that gold is a good place to invest. I believe this about gold: gold is one of the last places that you would ever invest. It can be a safe haven, but it is a safe haven against hyper-inflation. I would never put gold in a portfolio for investment purposes; I would put it there as the ultimate protection. That is why I say it should be the last priority. I would never speculate in gold, because the prices of gold are at the whims of the speculators who know a lot more about what is going to happen to gold prices than what I do.

But, I tell people that after you have accomplished every other long-term goal, then think about gold, but at the maximum, never more than 10% of your total assets should be in gold.

Again, the last thing you should want when you invest in gold is for the price to go up. Why do I say that? Because when the price of gold goes up, that means the economy is going into the tank. So you put your money into gold as the ultimate protection, but you do not really put your money into gold as an investment. And you do not take that ultimate step until you have accomplished every other step in your financial life.

I would also say seek the advice of wise counsel before you buy gold, and what type of gold that you should buy. It is not the place for the fainthearted. You need somebody to help you think through that investment.

Click here for the February 5, 2009 Blog Entry