3 Reasons Why You Don't Need to Purchase Gold

When you purchase gold, are you purchasing an asset or a liability?  In this question, it may be important to define the term asset.

According to www.actionablebooks.com, "An Asset is something that puts money in my pocket".

So, does gold actually put money into your pocket?  Does gold make any money?  Rather than focus on rate of return, it is probably more important to focus on cash flow.  Over time, would you rather have assets that are generating a cash flow or have to be sold to get access to their money?  Would you rather have assets that generate a cash flow and can be passed onto your children in order to continue generating cash flow for them?

Here are the 4 reasons you might not want to purchase gold:

1. Gold is not a cash flow producing asset
2. Gold is speculative, meaning that its value is based on investor perception
3. Gold is just one of many investments which protect against inflation risk

Do you believe that gold has its place in a diversified portfolio?  Should you purchase gold as your only investment or have a strategy in place and a particular reason for purchasing gold?

What do you think of the article at onecentatatime.com?

This post was reposted from http://finlit.biz/retirement-2/3-reasons-why-you-dont-need-to-purchase-gold/, originally written on February 7th, 2013.