Should I buy gold to protect against a dollar collapse?

Should I buy gold to protect against a dollar collapse?

No, you should not buy gold for fear of a dollar collapse. As the video discusses, this pitch is rubbish. Heck, you probably shouldn’t buy gold aside from coin collections and jewelry for personal use. Many unbiased experts don’t even consider gold an investment.

Once we stop giving gold salesmen attention, we find other parties that tout gold, other metals and commodities as  good hedges against inflation. A scientific examination of actual data suggests some commodities, including gold, are not well correlated to inflation at all. In August of 2010, the Wall Street Journal reported that Ibbotson and Associates calculated the correlation between gold and inflation since 1978 at a mere .08, meaning there was no direct relationship at all.

Further, commodities are far more volatile than stocks. Conservative or skittish investors may find that adding these assets to a portfolio causes more stress than they can bear.

True prudent investors should also consider the economic argument against holding commodities. Unlike stocks, commodities do not generate earnings or create business value. Unlike bonds, they offer no income. As Warren Buffet put it, “(Gold) gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”

(Gold) gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head. – Warren Buffet

Making News…


We frequently produce Q&A columns for Florida Today and MarketWatch, a personal finance website of the Wall Street Journal, as well as pieces for Investopedia, Orlando Sentinel, Financial Advisor magazine and others. Here is a sampling from the last three months.

Derrick Chandler, Charlie Fitzgerald, Tommy Lucas and Mike Salmon participated in the annual Ask An Expert hotline at the Orlando Sentinel in October. They answered questions on a variety of topics including how to max out contributions to a 401(k) in a short period of time, whether to rollover an old 401(k) into a new employer plan or an IRA, whether to enroll in traditional Medicare and take out a Medigap policy or enroll in a Medicare Advantage plan, and why a product hawked on the radio touting high returns with no risk is in fact too good to be true.

Dan Moisand continues to write for MarketWatch and Florida Today:

In the News…


Mike Salmon was featured in the cover story for the November issue of Financial Advisor magazine on some of the complications that come from retiring early. A significant issue Mike discusses is trying to avoid the 10% early withdrawal penalty on distributions from retirement plans when under age 59 1/2.

As Charlie Fitzgerald winds up his fourth and final year on the Board of Directors of CFP Board, he provided updates about CFP Board to attendees of the national conferences of the Financial Planning Association (FPA) in Chicago and the National Association of Personal Financial Advisors (NAPFA) in Philadelphia. Of particular interest to the audiences were the new higher standards of conduct CFP Board expects effective October 1st of 2019.

The fall conference season was a busy one for Dan Moisand too. In addition to the aforementioned FPA and NAPFA events, he spoke at conferences in St. Louis, Philadelphia and Las Vegas, totaling five talks in four cities over a three week stretch. He covered such topics as maintaining lifetime income in an era of low interest rates, constructing portfolios when spouses have differing risk tolerances, the future of the financial planning profession globally, and the importance of pro bono work to the under-served. He was also interviewed for Investopedia about controlling one’s intake of news. His Philadelphia panel on the importance of working solely as a fee-only fiduciary at all times inspired the title of this article for RIA magazine.

 

Things We Found of Note


The 2.8% cost of living increase for Social Security benefits in 2019 is the largest since 2012.

30% of tax returns claimed itemized deductions in previous years. After new tax law, only 13% of filers will itemize. (National Council on Nonprofits and Tax Policy Center)

Credit freezes are now free: As of September 21st, there are no fees to freeze or unfreeze your credit reports. A freeze prevents anyone from opening new credit in your name. When you need a new mortgage, car loan or other credit simply unfreeze your report until your application is submitted, then re-freeze it. Don’t let this extra step prevent you from utilizing this significant deterrent to identity theft. Here are links to the freeze ages of the three major credit bureaus:

• TransUnion: Visit TransUnion.com/credit-freeze. The company also has a free-freeze mobile app called myTransUnion, available at the Google Play Store and the Apple App Store.

• Equifax: Visit https://www.Equifax.com/personal/credit-report-services/. Or call its automated line at 800-685-1111.

• Experian: Visit www.Experian.com/freeze. Or call 1-888-EXPERIAN (1-888-397-3742).

 Contact Us


Moisand Fitzgerald Tamayo, LLC is an Orlando, FL and Melbourne, FL based fee-only financial planner serving central Florida and clients across the country. Moisand Fitzgerald Tamayo, LLC specializes in providing objective financial planning, retirement planning, and investment management to help clients build, manage, grow, and protect their assets through all phases of one’s life and the many transitions in between.

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Important Additional Information & Disclosures


Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Moisand Fitzgerald Tamayo, LLC-“MFT”), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. 

Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from MFT. 

Please remember that if you are a MFT client, it remains your responsibility to advise MFT, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. MFT is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. Tax advice is given only to clients and only when agreed to by MFT. A copy of the MFT’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request.

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