Professor Franklin Allen, professor of finance at Wharton, says that holding gold is not a good long-term investment. The basis for his argument? - an ounce of gold costs over $1,000 now, which is a peak value when compared its value in the recent past (a few years ago). The previous peak value was about $850/oz in 1980. So, the appreciation in the values doesn't even beat the inflation during these 28 years. He says that gold is a risky investment as its value fluctuates significantly (relative to other popular investments).
Also, professor Jeremy Siegel of Wharton says that:
...a dollar invested in gold in 1801 would have grown to just $1.95 at the end of 2006, while a dollar put into a basket of stocks reflecting the entire market would have grown to more than $755,000. A dollar put into long-term bonds would have grown to more than $1,000, while a dollar in Treasury bills and similar short-term "cash" holdings would have grown to about $300.
2 comments:
Yo Mayya:
I disagree with Franklin Allen. My guess is that he may be a bachelor. I , for one, think that it is a beautiful long term investment. Keeps my wife happy and me happy in the process.
Sas,
You don't have a choice but to invest! Som you can say, not investing could be a health hazard:-)
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