Gold...don't ignore this investment tool

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Created: Wednesday, 01 October 2003 18:45

Written by Tom Lipp

Last month we reviewed the Biblical reasons for including gold as a big part of our investment portfolio. 

Gold, silver and other precious metals in any form, for example, bars or certificates are not qualified investments for RRSP’s. However, shares of gold mining companies or precious metal mutual funds can be held in RRSP’S. Two well-known mutual funds have respectively posted average annual compound percentage increases ending August 2003 for the past one year 33.9 and 47.1, three years if 44.8 and 39.2, and five years 33.6 and 28.2. Of course I must add that past performance does not guarantee similar future performance. In the early 1990’s and especially after the Bre-X scandal, gold funds fell in value. I like to use gold funds as a hedge and counter-balance against traditional equities. Mutual funds are more volatile than the price of bullion. Many precious metal funds also include diamond, silver and platinum producers.

Outside of RRSP’s and RRIF’s, bullion in the form of coins such as the Maple Leaf, available from Albern Coins or from the Bank of Nova Scotia, provides one form of liquid security. Gold hit a historical high of US $850/ounce in January 1980 and since then it has fallen to a low of US $252 in August 1999. Gold presently sits around US $370.

Many gold bugs are wondering if we’re witnessing a growth phase that may last as long as a decade.

The US is, increasingly, a heavily indebted nation at all levels; public and private. The spending surge produced by mortgage refinancing has slowed to a trickle and the impetus from tax cuts will soon run out.

According to Douglas Goold of the Globe and Mail “Smart investors should not put their money in US stocks…but rather into assets that do best when the dollar is falling, such as gold.” I agree.

However, we must never forget that despite gold’s respectable position in the Word of God and its rising value during our current geopolitical tensions, gold has very real limitations. In the spiritual realm it is junk! Our enslavement to sin and to the devil can never be paid off, even by all the gold in the world. It requires something much more precious (valuable in the eyes of God Himself) --- the life-blood of Jesus Christ, His only Begotten Son. This seems rather macabre, yet it speaks volumes about God’s abhorrence of sin.

Something beyond human capability is needed to break the spiritual vice-grip of sin and death. Jesus purchased for us what gold never could! But for this world’s temporary treasures, don’t ignore this investment tool. Use it but don't worship it.