Gold futures passed $600 per ounce this week

April 15, 2006

Gold was under $500 an ounce just last October, and has risen 16% this year alone.

What It Means:
Many investors, including large pension funds, are buying gold and other commodities as a hedge against inflation and unrest in the Middle East. However, this is exactly the kind of speculative market force that could catch individual investors, like you and me, at the wrong time.

Action Steps:
How to handle it? This is why we always say you should have about 30% of your portfolio in hard assets - which includes real estate and commodities like gold. That way, as prices go up, you will benefit. However, if they go down, your whole portfolio won’t be exposed...just a portion.