“Gold is a gift; not an investment” advises Lubin Professor Lewis J. Altfest in an editorial appearing in the March 14 issue of The Wall Street Journal.
“Gold does look beguiling when the world is full of fear or concerned about a coming bout of inflation,” writes Altfest. “To some, that may sound like today’s difficulties. To me, that is rearview-mirror investing.”
“It’s hard to beat a solid gold piece of jewelry as a gift,” writes Lubin Professor Lewis J. Altfest in a Wall Street Journal editorial on March 14.
“And if you want to escape a country in turmoil with closed borders, a gift of a few ounces of gold will work wonders. Fundamentally, the problem of gold as a portfolio investment is that it isn’t a real investment. Real investments are stocks, bonds, income-producing real estate and private businesses, all of which, except for bonds (which produce interest instead), produce profits. These are paid out as income in the form of dividends or are reinvested and grow.
“In contrast, bullion just sits there hoping to look attractive. Since the price of gold is not supported by anything other than the mood of investors, its value can plummet just as quickly as it soared.”
As states look for ways to trim massive deficits, the battle over public employees’ pay and benefits continues to heat up.
Lubin Finance Professors Lewis Altfest and Ronald Filante comment on the shift by public-sector employees’ retirement plans to mirror those of the private sector by shifting to defined-contribution plans, aka 401 (k)s.
Both Pace Finance Professors Ronald Filante and Lew Altfest agree that from a worker’s perspective, traditional pension plans are a better deal, although financial planning by definition is a very personal process.
Professor Filante: “It makes a lot of sense for individuals to determine the key variables, such as risk tolerance, expected date of retirement and length of retirement.”
Professor Altfest: “The challenge many workers face is that they’re just not good investors. Investing requires knowledge of how markets work, and few people, for example, understand how bonds work and when is the best time to buy them.”
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