Gold Is a Gamble, Not an Investment

THE WEEK: Gold brings in no income, in fact it can cost to hoard it; investors would be better off looking at UK dividend-paying companies, says Morningstar columnist Rodney Hobson

Rodney Hobson 19 April, 2013 | 1:52PM
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Gold? Bah!

It is too much to hope that those so-called experts and journalists who have been so assiduously promoting gold as a ‘safe haven’ will now apologise to the thousands of ill-informed investors who have lost heavily over the past 18 months.

They really should say sorry and promise not to do it again. Yet apologists are already arguing that the fall is just a blip that reflects economic uncertainty, conveniently overlooking their own prior argument that economic uncertainty was sure to keep driving the price of gold up to $2,000 an ounce.

As I have stated frequently in this column—and now feel obliged to hammer away again ad nauseam—gold is a gamble, not an investment. It brings in no income. Indeed, it can cost you money in storage and insurance fees to hoard it.

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About Author

Rodney Hobson

Rodney Hobson  is a columnist for Morningstar.co.uk and author of several investing books, including The Dividend Investor and How to Build a Share Portfolio.