THE YEAR 2020 HASN’T FELT LIKE THE
Golden age of anything, except maybe for gold itself. Early August saw the shiny yellow stuff hit an all-time high of more than $2,000 an ounce. Prices have fallen back since then, but it has still been an excellent year for gold investors so far: The price of the metal has risen by 27.5% in 2020, compared with a 21.8% total return for the Nasdaq Composite stock index and a 4.8% total return for the S&P 500. Even longtime gold detractor Warren Buffett recently purchased stock in a gold mining company. (Prices and returns are through September 11.)
Gold’s glow-up has come even though it produces no earnings or income in the form of dividends, as would a stock. Unlike the case with other commodities, such as copper and tungsten, gold’s prices don’t rise and fall along with industrial demand.
So, why the gold rush? For one thing, basement-low interest rates mean that many bond investors currently earn yields lower than the rate of inflation. In such a climate, gold’s lack of yield is much less of a drawback, says Doug Ramsey, chief investment officer at the Leuthold Group. “Any competition gold had from fixed income has vanished,” he says.
Also contributing to gold’s rise: the Fed’s decision to flood the U.S. economy with unprecedented amounts of stimulus money in the wake of the COVID-19 pandemic. Gold is a classic inflation hedge, and investors have snapped up the metal on the premise that the stimulus will eventually drive up prices if the influx of cash causes consumer demand to rise faster than the supply of goods and services.
Continue reading your story on the app
Continue reading your story in the magazine
JOB HUNTERS HAVE A NEW NEGOTIATING TOOL
More employers will be required to disclose salary ranges in job postings.
CRYPTO LOSES ITS COOL
INFORMATION ABOUT THE MARKETS AND YOUR MONEY.
Planting the Seeds of a New Life
This sustainable farm helps women adapt to a world outside of prison.
HEALTH CARE BARGAINS ABROAD
If you can't afford a medical procedure here, investigate options overseas.
A Vintage Budgeting Method Is Back
MILLENNIAL MONEY - IF YOU STRUGGLE TO KEEP YOUR SPENDING IN CHECK OR ARE WORKING ON A SAVINGS OR DEBT-PAYOFF GOAL, CASH STUFFING IS ONE WAY TO GET ON TRACK.
Is an Adjustable-Rate Mortgage Right for You?
With fixed rates rising, ARMs offer lower monthly payments for the initial term. But know the risks.
Breeze Through a Fund Prospectus
Use our guide to focus on what's important to make this task less daunting.
RESHOPPING AUTO INSURANCE IN A HIGH-INFLATION WORLD
Premiums are on the rise, but it's a good time to find deals on policies.
Fixing Your Fixed-Income Portfolio
After a brutal year for bonds, prices are attractive and yields are high.
Stick With Dividend-Paying Stocks
STREET SMART - DIVIDEND STOCKS MAY NO LONGER PAY MORE THAN TREASURIES. BUT THAT DOESN'T MEAN YOU SHOULD TRADE IN YOUR STOCKS FOR BONDS.
Your Home Will Become a Power Plant
A home can be many things—a refuge, an investment, a money pit. So why not a power plant? In 2023 more US homes equipped with solar panels and batteries will start generating surplus electricity they can sell to their local utility.
Argentina's Inflation Crisis
Argentina is no stranger to economic turmoil, having defaulted on its national debt three times since 2001.
Will Jay Powell Blink? - Inside the Fed Chair's Fight to Curb Inflation
In the high-stakes battle against runaway price increases, many Wall Street stock traders think Powell is raising interest rates too quickly. Others fear that he’ll stop too soon. Why this Washington lifer may have the toughest job in America.
11 Stocks to Stick With for 2023 - Bullish Prospects in Bearish Times
Where should you turn when the smart money expects a recession? Look for companies whose products and services sell well even when times are tough.
A Sign of Inflation Coming Down the Road
To understand why it's so hard to get a handle on inflation, take a look at car prices in the US today. Used-vehicle prices are dropping at the fastest pace in decades, and the cost of a new car is still skyrocketing.
Cash Retakes Its Crown
Investors are piling into products that shield them from losses in a rising-rate environment
Biden Can't Pin Inflation on Putin
If Biden is looking to spread the blame for inflation evenly, he should look in the mirror.
Need a Hug?
Speculative assets lead a market selloff, but corporate cash could put a floor under prices
5 Steps to Reach Your Money Goals in 2022
In addition to the new year bringing confetti and a fresh calendar, it’s a time to set big money goals for the next 12 months. That might mean finally paying off debt, buying a house or taking a long-delayed vacation.
Inflation Will Make Government Budget Problems Worse
"Recent comments from Federal Reserve Chair Jerome Powell hinted that the Fed may soon get serious about hitting the monetary brakes to slow the economy. Until recently, inflation was described as transitory. But at some point, that story has to change."