Gold and other precious metals have been used as stores of value for thousands of years, so naturally investors are curious about adding them to their portfolio. Curiosity typically peaks not when the markets are quiet and things are going well, but when things are volatile and the future is uncertain. Whereas common investment classes like stocks and bonds generate growth and income for a portfolio, and provide liquidity, gold provides none of these. It doesn't produce income, it doesn't compound, and is not as liquid. As Matt says, gold is not a plan, it's a compliment to a plan.

Before you buy, it's important to ask yourself what the actual problem is you are trying to solve. Adding gold to a good financial plan doesn't necessarily improve the plan, it just changes it. If anything it adds more complexity to the plan, which carries its own risk. Moreover, buying gold carries opportunity cost, shifting assets away from growth and income production. So ask yourself, what are you trying to do by buying precious metals? Are you looking for stability, protection, diversification, or something else? Most of these questions point to structural issues that you may need to address elsewhere in your plan before buying gold.

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