The Risks of Buying and Owning Gold

My landlord stopped by my office today and asked me what the biggest risk of owning gold is right now.I pondered for a second, thought of a few and gave him my answer.It went something like this:

If all the bailouts and all the stimulus programs work, gold will go down and Pandora will be restored to its original beauty.Housing prices will recover, there will be very low inflation, gas will be be $2.00 a gallon again and it just won't matter how much debt we create.

Printing money will become commonplace as anytime the economy moves just a bit too slow, another stimulus program is announced.How about "Cash for Castles?"Everyone gets a bigger house.And for such an act, there will be no consequence.Rising deficits?No problem!Rising debt?Still no problem!Default of sovereign debt?Won't happen cause we just print more money.Market risks?Eliminated!

And what about your gold IRA or other properly diversified savings and retirement accounts.Yup! Gold will be down and everything else will likely be up.Are you willing to take that risk?

That's how gold coins as investment should be viewed.If you have them but don't need them, that's perfect.And that's why I always say, Diversify! Diversify! Diversify!A portfolio that is not is at the most risk.Keep a few gold coins in your basket of eggs and then rest assured if the eggs spoil, your gold coin price will rise and allow you to buy more.