RE:RE:RE:RE:RE:RE:RE:RE:Franks Still buyingRight on Heywood. From what I have been reading, the smart money is already quietly making its exodus. The really dumb money, however, continues to pile on. A very good bud of mine is a financial planner. In times past, planners used to recommend 5 to 10% gold in ones portfolio. Now they hate it. And they are also ignorant in terms of what the POG has actually done over the long term. Here's an article that reveals the mindset of a lot of financial planners. The Experts: Should the Average Investor Buy Gold? May 7, 2013 10:17 p.m. ET Does gold belong in the average investor's portfolio? The Wall Street Journal put this question to The Experts, an exclusive group of industry and thought leaders who engage in in-depth online discussions of topics from the print Report. This question relates to a recent article that discussed ETFs as indicators for the price of gold and formed the basis of a discussion in The Experts stream on Tuesday, May 7. . The Experts will discuss topics raised in this month's Wealth Management Report and other Wall Street Journal Reports. Find the finance Experts online at WSJ.com/WealthReport. Also be sure to watch three wealth-management thought leadersMorningstar's Director of Personal Finance Christine Benz (@Christine_Benz), American Association of Individual Investors Vice President Charles Rotblut (@CharlesRotblut) and Portfolio Solutions Founder Rick Ferri (@Rick_Ferri)speak about succeeding as a do-it-yourself investor in a video chat that aired on Monday, May 6. . Charles Rotblut: I Hate Gold as an Investment. And Yet I hate gold as an investment. It just sits there and glitters. Plus, since it produces no cash flows, it is impossible to value. It is only worth what the next buyer is willing to pay. So, why do I hold a smidgen of gold in my portfolio? The reason is that the shiny metal has returns that aren't correlated with either stocks or bonds. So, gold does offer a diversification benefit. But, I still hate it as an investment. Charles Rotblut (@charlesrotblut) is a vice president with the American Association of Individual Investors. . Greg McBride: Allocate About 5% to Precious Metals Gold and other precious metals offer a hedgealbeit not a perfect hedgeagainst inflation and currency devaluation. However, you won't earn dividends or interest on your investment in the interim. For this reason, a small allocation of approximately 5% of your portfolio is an appropriate holding for most investors. But just as importantly is how you invest. Buying actual gold and precious metals increases your costs for storage and insurance. To minimize your investment expenses while still obtaining the desired diversification benefit, consider instead a mutual fund or exchange-traded fund that holds actual precious metals, rather than those investing in futures contracts or mining companies that introduce additional risks you aren't prepared for. Greg McBride (@BankrateGreg) is a senior financial analyst and vice president for Bankrate.com, providing analysis and advice on personal finance. . Eleanor Blayney: Not Even Dentists Still Use Gold Apart from the gold eagle coin that I found as a little girl and immediately made me the richest kid on the block, I personally have never held gold, nor advised any of my clients to hold it. I guess that makes me a contrarian's contrarian. Here's my problem: When you invest in gold, what are you investing in? It isn't a productive enterprise, like a business. It doesn't build anything and it doesn't grow in any real or organic sense. Yes, it is pretty when fashioned into rings or necklaces, but not even dentists still use it for filling teeth. So what does it do for you? In times of global crisis, it is a go-to for nervous investors, but so are U.S. Treasurys. People argue that it is a store of value, but not intrinsically so. It only stores value if you and I and most everyone else agree that it is the one and only store. Back to the wisdom of childhood. As rich as I felt with that gold coin, the other kids were more interested in trading and playing marbles with me. At least we could do something with the marbles: My bolster could wipe out your cat's eye every time. Eleanor Blayney (@EleanorBlayney) is consumer advocate of the Certified Financial Planner Board of Standards. . Terrance Odean: Unless You're in an Unstable Economy, Don't Invest in Gold No, gold doesn't belong in the portfolio of the average U.S. investor. Gold doesn't produce anything. It isn't a company providing services or goods. It isn't farmland providing food. It isn't a building providing shelter. Its price gyrates highly with shifts in investor sentiment. Like art, gold can be beautiful. So buy it like art for its beauty (e.g., necklace or a wedding ring), not as an investment. The same advice wouldn't necessarily apply to someone in a politically or economically unstable country who faced a real risk of currency collapse and was unable to obtain or safeguard foreign securities or currency. While such a person would face the same sentiment risk when buying gold, this risk could be less than the risk of currency collapse. Terrance Odean is the Rudd Family Foundation professor and chair of the finance group at the Haas School of Business at the University of California, Berkeley. . Sheryl Garrett: There Are Better Hedges Against Inflation I recommend gold for wedding rings but not for investors' portfolios. Gold doesn't pay dividends. It is only worth what someone else is willing to pay you and sometimes people don't think the same way. If your purpose for buying gold is to hedge inflation, which is a common sentiment, most advisers recommend holding 5- to 10% of your portfolio in gold. That may not amount to much money. The fractional interest you own wouldn't make a real dent in the impact of inflation. Some stock exposure, home equity and living debt free are better, more effective hedges against inflation for the average American. To add an inflation hedge to your investment portfolio, consider real assets (ak. commodities) and Treasury Inflation Protected Securities (TIPS). Sheryl Garrett (@SherylGarrett) is founder of the Garrett Planning Network Inc. . Larry Zimpleman: What's the Fair Value of Gold? Good Luck Figuring That Out. I believe that gold is a difficult asset to determine a fair value for. Gold is still used in some industrial processes, although gold is more often purchased based on either emotional decisions or people who seek to own real assets. The point is that it is hard to know what the supply and demand characteristics are for gold. There is some reason to believe that gold can act as a store of value during stressed timesso if you are conservative in your investment outlook and you believe that all markets are overvalued, then there may be a place for a modest exposure to gold as an alternative to cash. Butfor an average investorI wouldn't see them wanting exposure to gold. Larry D. Zimpleman is chairman, president and chief executive of Principal Financial Group. . Manisha Thakor: Gold Isn't as Safe as You Might Think My short answer? No. Per a recent piece from Dimensional Fund Advisors' Weston Wellington, the annualized return on the gold spot price from 1973 through March 31, 2013, has been 7.63%. This is suspiciously close to the 7.69% return generated over that time period by five-year U.S. Treasurys and quite a ways off the 10.18% return generated by the S&P 500. Yes, that rate of return did exceed inflation as measured by the CPI at 4.3% over that time framebut what a bumpy ride (as anyone who has experienced the 25%-plus decline in gold prices since the 2011 peak will tell you). The root issue I have with gold is that its price is based not on the present value of future cash flows but supply and demand. The later is a very bluntand volatile wayto price an asset. As such, if your goal with investing in gold is "safety," you have to ask yourself how safe something is when its long-run value is determined solely by the whims of the collective crowd. If, however, your goal with purchasing gold is to take a gamble or make a bet on the direction of the current price, go for it. Just don't call that investing. Call it speculating and make sure you are only doing it with money you can truly afford to lose. If you are doing it because it makes you sleep well at night to know that while the price may go down at least it won't go to zero, again, fine to own. But that is not investing either. That is throwing an anchor down in the water. For this reason, if the goal is to truly "invest," I don't believe gold belongs in an average investor's portfolio. [See chart: "God Versus Benchmarks, 1973-2013] Manisha Thakor (@ManishaThakor) is founder and chief executive of Santa Fe, N.M.-based MoneyZen Wealth Management LLC. . Michelle Perry Higgins: It Can Be a Good Hedgebut Don't Forget Other Commodities First of all, ANY investor, not just the average investor, who is considering adding gold into their portfolio should do their homework to understand the price volatility this metal can and has experienced over the years. Gold isn't always a sure thing, as we have seen over the past few months. That being said, gold can be a worthwhile hedge against inflation or chaotic economic events. Second, I would recommend that investors research other commodity options, not just gold. There is a whole bucket of investments within the commodity sector that may complement your portfolio. Commodities fall into the alternative investment category, which can be a good pillar in a portfolio, as long as you are clear on the risk associated with the investment. Michelle Perry Higgins (@RetirementMPH) is a financial planner and principal at California Financial Advisors. . Rick Ferri: Invest in GoldRings. I invested in two gold wedding rings 30 years ago, and it has been the best investment I ever made. These gold rings have yielded a loving and joyful relationship, three wonderful children and one grandchild so far. I highly recommend making this investment. My thoughts about gold as an asset class investment are quite different. Why the fascination with something that barely returns the inflation rate over time? This illustration highlights 220 years of gold prices in 2011 dollars. Rick Ferri is founder of Portfolio Solutions LLC and the author of six books on low-cost index fund and ETF investing. His blog is RickFerri.com. . George Papadopoulos: Gold Is for Speculators, Not Investors I believe you speculate in gold; you don't invest in it. Gold is only worth what another party is willing to pay for it. It pays no dividends and has no earnings. If you own actual gold bullion you need to store it somewhere and pay safekeeping fees. You hear a lot about gold in conjunction with doomsayers who have been predicting the end of the world ever since 1933 when the U.S. dollar went off the gold standard. They are in the fear-and-doom prediction business. It has been known to sell better than sex. The only problem is that the doomsayers have always been wrong. We as wealth managers always have a few clients who sleep better at night knowing they have up to 5% invested in gold or other precious metals. Doing so in an ETF like the iShares Gold Trust (symbol GLD) is preferable. George Papadopoulos (@feeonlyplanner) is a fee-only wealth manager in Novi, Mich., serving affluent individuals and families. . Tom Brakke: Just a Few Nuggets Will Do Gold is likely to provide some modest diversification benefit over time, so a small allocation probably makes sense, but the case for it is harder to make today than it was a decade ago. That isn't because the price has gone up, but because like many other commodities gold has undergone a "financialization" through the emergence of ETFs and other trading vehicles for it. The result has been a higher correlation to financial assets than has historically been typical, negating the primary reason for owning it. Gold is in many ways a vehicle of pure belief, with fervent believers that think of it as the ultimate asset, as well as plenty of naysayers, too. For those of us without a theological view, a few nuggets just in case is all we need. Tom Brakke (@researchpuzzler) is a consultant, writer and investment adviser who specializes in the analysis of investment decision making and the communication of investment ideas. How Financially Literate Are You Really? Lets Find Out Its one thing to know the facts about money and investing. Its another thing to truly understand them. Click to Read Story Why Retirees Should at Least Consider a Financial Adviser Even those who think they have their retirement planning in hand can use someone to keep them from making a costly mistake. Click to Read Story To Maximize College Financial Aid, Timing Is Key The best time to make financial moves is when your student is a high-school sophomore. 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