If you listen to Christian radio or watch cable news, you have heard the ads. The dollar is doomed. The government is printing money. Protect your retirement with gold.
Some of the concern behind those ads is fair. Some of the sales tactics are not. This post separates the two.
We will say it plainly: we believe Scripture's warnings about debt speak to nations as well as households, and concern about long-term government borrowing and inflation is reasonable to plan around. "The borrower is servant to the lender" (Proverbs 22:7, KJV) applies to nations as well as households. Inflation can erode the purchasing power of savings. Wanting to protect against that is reasonable.
But a reasonable fear can still lead to an unreasonable decision.
Gold is a commodity. It does not pay interest or dividends, and it does not produce earnings. Its value depends on what the next buyer will pay. Its price can rise sharply during times of fear, and it can also fall sharply and stay down for long stretches.
Stocks represent ownership in businesses, which may produce earnings and dividends, and they carry their own significant risk, including loss of principal. Bonds carry interest rate and credit risk. No asset class is immune to loss, and how any of them will perform is not predictable.
People search "gold vs stocks" as if one must win. Neither is certain to outperform the other over any period. Past performance is not indicative of future results.
"The silver is mine, and the gold is mine, saith the LORD of hosts" (Haggai 2:8, KJV). Gold is not evil. It is His.
But Jesus warned about treasures "where moth and rust doth corrupt, and where thieves break through and steal" (Matthew 6:19, KJV). And Paul told Timothy to charge the wealthy "that they be not highminded, nor trust in uncertain riches, but in the living God" (1 Timothy 6:17, KJV).
The danger is not owning gold. The danger is trusting it. Any asset that becomes your security has become an idol.
1. What exactly am I afraid of, and does gold actually address it?
2. What percentage of my savings would this be? A small position is very different from moving a retirement account.
3. What will it cost me all-in to buy, hold, and later sell?
4. Who is selling it to me, and how are they paid?
5. Does this fit my income plan, or does it just quiet the fear?
Ecclesiastes 11:2 counsels spreading a portion "to seven, and also to eight." Diversification does not ensure a profit or protect against loss, but betting everything on any single asset, including gold, cuts against that wisdom.
If the headlines have you wondering whether your retirement is protected against inflation, start with the free Retirement Paycheck Readiness Scorecard at scorecard.matt25capital.com, or call our office at 620-670-9455 to talk it through.
I'm Will Snodgrass, CFP®, with Matt25 Capital, serving Christian pre-retirees and retirees in The Woodlands, Houston, and across Texas.
The opinions voiced in this material are for general information and educational purposes only and are not intended to provide specific advice or recommendations for any individual. Nothing in this blog constitutes investment, legal, or tax advice. Please consult with a qualified professional before making any financial decisions. Past performance is not indicative of future results. All investing involves risk, including the potential loss of principal. Any hypothetical examples used are for illustrative purposes only and do not represent actual client results. Confirm current IRS, Social Security Administration, and plan rules for your situation. Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. Fixed insurance products and services are separate from and not offered through Commonwealth Financial Network®. Certified Financial Planner Board of Standards Inc. (CFP Board) owns the CFP® certification mark, the CERTIFIED FINANCIAL PLANNER™ certification mark, and the CFP® (with plaque design) logo in the United States, which it authorizes use of by individuals who successfully complete CFP Board's initial and ongoing certification requirements. Matt25 Capital is a separate entity from Commonwealth Financial Network®.
Precious metals and commodities are speculative, subject to significant price volatility, and may not be suitable for all investors. Physical precious metals may involve markups, storage, and insurance costs. Diversification does not ensure a profit or protect against loss. This material is not a recommendation to buy or sell any investment.