Stock Investment Tips: How to Invest in Stock

FREE Gold Investment Kit:

I receive a number of media requests each day and it is interesting to watch the trends. One of the current trends are questions about physical gold or silver as part of an investment strategy. Gold has a low expected return (about inflation) and a high volatility (much higher than the stock market) as well as a terrible tax treatment (it is taxed as a collectable at a 28% capital gains tax).

As a result,the optimum asset allocation to gold is 0% no matter what your risk preference.

Clients don’t always follow our advice, so we ask them to limit their investment in physical gold and silver to less than 3% of their portfolio. Again, calling it an investment isn’t really accurate. An investment is something that pays you money. Physical gold has no earnings, so the P/E ratio is infinite.

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