Is This a Good Time to Invest in Gold?
By ELEANOR LAISEApril 23, 2008; Page D2
Q: Is this a good time to invest in gold or will I be buying at the peak? Can you name two gold mutual funds with good long-term performance and reasonable fees/expenses?
--Vikas Mehta, Fairfax, Va.
A: Gold has jumped about 35% over the past year, to $922 an ounce, and if U.S. dollar weakness and geopolitical tensions continue, it may well move higher from here. Two exchange-traded funds, iShares Comex Gold and streetTracks Gold Shares, are designed to track the price performance of gold bullion, minus fees, and they both charge reasonable expenses of 0.4%. But the yellow metal is an extremely volatile investment, and it has failed to keep pace with inflation in recent decades. Many advisers recommend a small, long-term allocation to a broad commodities fund that includes gold rather than a stand-alone bet on bullion. One option: The Pimco CommodityRealReturn Strategy Fund. This fund holds inflation-indexed bonds as well as derivatives linked to the Dow Jones-AIG Commodity Index, which gives a roughly 7% weighting to gold.
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