Why I don’t invest in gold….

Here is an article that provides 5 tips for gold investors.

Personally, I don’t believe it is wise to invest in gold. The main reason is because gold depends on “capital appreciation” as a return. You make no gains till you divest it upon price appreciation. It does not provide you with any dividends while you own this asset. Meanwhile, if you divest it below what you paid for it, you actually make capital losses. As a result, this becomes the playing field for many speculators.

On the other hand, if you own a dividend paying asset, even if you divest it at a lower price than what you paid for it, there is a chance that the dividends you have received may have covered those losses. In fact, you don’t even have to bother about the fluctuation in the price of the asset as long as it continues paying dividends.

Perhaps it may boil down to your investment strategy, how you spread your asset portfolio and how much you allocate to assets that depend only on capital appreciation for returns.

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