Why The Gold Bubble is Ready to Pop

 

 

 

 

 

 

Gold has been on a tear of late.  Gold has become so popular that the # of different infomercials on TV asking me to sell them gold and jewelry now outnumbers the number of Netflix subscribers!

All joking aside, let’s assess if gold truly is a good investment to hold.

In 1999, the price for gold was $250 and as skyrocketed well over $1800.  That’s a 620% return in just over a decade!  Some even forecast gold to reach $2300 by next year, so it’s no wonder there is investor frenzy with gold.

But hold on a minute, what about the old saying “what goes up, must come down”?

According to March Schindler CFP®, here’s why we have a gold bubble:

  • The size of the gold ETF virtually guarantees that sellers will not be able to find buyers at current prices.
  • Gold is at its most expensive ever relative to stocks
  • Over long time periods, gold has underperformed stocks and bonds and will likely do so going forward.

As Marc puts itGold is a useless asset. It does not produce earnings, it does not pay dividends or interest, and it has few industrial uses. The only thing it does well is look pretty.”

Are you a gold digger or waiting for the bubble to pop?

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