Tuesday, December 11, 2012

Brett Arends: In gold investing, forget the metal and focus on stocks

Although I am equally bullish on precious metals, I don't agree with the author's sentiment.  The first step in precious metals is buying the physical bullion or coins themselves.  That's the fear trade--a hedge against financial catastrophe.  Once that base is covered, then the greed trade--investing in mining stocks--is supplemental.

Buying physical precious metals is not an investment per se--it produces no cash flow and does not pay a dividend.  But it is a hedge against inflation, currency debasement, and economic collapse.  Consider physical precious metals catastrophe insurance, and your first-line defense against predatory central banks and sovereign governments enamored with the printing press.


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