My Gold Investments Did Not Glitter

Bill Harbin Jr By Bill Harbin Jr, 30th Jun 2014 | Follow this author | RSS Feed | Short URL http://nut.bz/1eex_gon/
Posted in Wikinut>Business>Investment

If you are considering buying gold perhaps you should read this real life experience of what happened to me. This perspective may change your mind about buying gold.

My Gold Investments Did Not Glitter

Twice I was enticed by ads to buy gold with promises of security and riches only to be frustrated by the reality of losing money. I bought gold in the 80’s after listening on the radio to scare tactics. Gold was proclaimed to be a hedge against inflation and a safe protection against economic disaster. The TV ads recently convinced me to try gold again. Both times of gold investment produced frustrating results, while other investments created real value.

IRA Destroyed By South African Gold Stocks

My gold investment in early 1980 consisted of $1000, with $500 put into an IRA buying South African Gold Stocks and $500 buying a Krugerrand coin. The price of gold steadily went down after that year. By 1985 instead of gold riches coming my way, the gold shares IRA value including subtracting the annual fees went to under $100.The value of the coin was about ½ what I had paid. The IRA was cashed out before it went to zero balance.

During each of those five years $1000 was put into mutual funds in another IRA with the value increasing to around $8000. In addition, I purchased a home that increased at about the same rate for five years as the new IRA. The gold coin was sold for a $250 loss.

Everything Goes Up Except Gold

Fast forward to 2000 and the value of my mutual fund IRA including $2000 yearly investments for the past 15 years is doing well. The equity in my original home purchased was also increasing in value. The price of gold is about the same as 1985. However, when the financial crisis of 2008 came along the ads kept enticing me to buy gold again.

In February 2012 I bought another Krugerrand for $1600. The price went up in just a few months to $1800, and was predicted to go way past $2000. When 2013 rolled around the value dropped to $1400. In April of 2012, once again I sold my gold at a loss of $200. Perhaps gold can be a hedge against inflation, or offers security against economic collapse. I would rather try other investments.

My IRA is now self-directed and I have carefully selected good stocks and live off the stable paying dividends. The home I purchased gives me a place to live now with no payments. Gold in my opinion produces no positive investment results. It only brings a smile to my face when I look at my wonderful wife’s wedding ring. That is a gold buying decision that really glitters.

Photo from Pixabay

Tags

Gold, Gold Investing Tips, Gold Investment, Gold Prices, Gold Stocks, Krugerrand

Meet the author

author avatar Bill Harbin Jr
Bill Harbin Jr is a freelance writer that had a book published in addition to hundreds of articles. His practical, down to earth advice can be used to find not only value, but perhaps a better life.

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Comments

author avatar snerfu
1st Jul 2014 (#)

Great article Mr Harbin

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author avatar WOGIAM
1st Jul 2014 (#)

I am surprised the price of Gold is dropping, I thought Gold was appreciating in price and value.
Thanks for sharing

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author avatar Sivaramakrishnan A
2nd Jul 2014 (#)

I remember gold price was supposed to go through the roof as per many forecasts nearly thirty years ago. But it stagnated for years before making some recovery about three years ago. To make money through investing is not easy and one tends to lose balance in life. Money for its own sake attitude takes over - siva

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author avatar Nancy Czerwinski
15th Nov 2014 (#)

Bill, great article on gold and investments. I don't

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author avatar Nancy Czerwinski
15th Nov 2014 (#)

I don't know that much about gold but I do love gold jewelry. Smiles to you!

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