Still Too Early to Go for Gold: Searching for Alpha, December 2009

The current “it” investment of the moment is gold. Everyone seems to be talking about the rally in what some have described as the last storehouse of value. Gold ETFs have become wildly popular. And now some of the best hedge fund managers are starting to build dedicated funds around the precious metal.

I’m not as bullish on the yellow metal, and I don’t believe that it deserves a dedicated position in most individual investors' portfolios. Why? For starters, gold is treated as a collectible by the IRS. Instead of the 15% capital long-term gains tax rate enjoyed by stocks and bonds, any profit coming from a 12-month or longer holding period is subject to a 28% tax rate. If gold is held short-term, the gain is taxed as regular income...

Investment Advisor: Still Too Early to Go for Gold: Searching for Alpha, December 2009