Wall Street legend Warren Buffett has famously declared that gold is not an investment. He is correct, but he stopped halfway. He did not go on to say what gold really is, perhaps purposefully intending for people to draw their own conclusions.
In my view, there is only one conclusion possible, because there are only two alternatives when it comes to allocating assets in any portfolio, whether that of an individual or an institution. Your assets are either an investment, which gold is not; or money, which gold indeed is.
Mr Buffet defines investing as “…the transfer to others of purchasing power now with the reasoned expectation of receiving more purchasing power…in the future”. In other words, you put your money at risk hoping that you have made a good decision, so that more money is returned to you from your investment in the future.
Note though that Mr Buffett purposefully uses the term ‘purchasing power’, and not money. He clearly understands that money today is no longer a constant measure of wealth.
Read the complete article at GoldMoney here.
Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.