TRANSCRIPT 🔗
WEBVTT
1
00:00:00.200 --> 00:00:03.359
New shows, new music, new movies. Keeping up with pop
2
00:00:03.359 --> 00:00:06.799
culture sometimes feels like a full time job. Thankfully, over
3
00:00:06.799 --> 00:00:10.039
at pop Culture Happy Hour, it's literally our job. We
4
00:00:10.080 --> 00:00:13.439
break down what's actually worth watching, listening to and pretending
5
00:00:13.480 --> 00:00:16.199
you already knew about. So the next time someone says
6
00:00:16.239 --> 00:00:19.800
did you see that, you can say yeah, obviously follow
7
00:00:19.960 --> 00:00:23.480
NPR's Pop Culture Happy Hour. Wherever you get your podcasts.
8
00:00:24.399 --> 00:00:30.120
You're listening to Life Kid from NPR. Hey, it's maryel
9
00:00:31.239 --> 00:00:34.200
I lost a gold hoopering the other day, one of
10
00:00:34.280 --> 00:00:37.520
several pieces of jewelry that I have recently disappeared. And
11
00:00:37.560 --> 00:00:40.679
my first thought was, I clearly cannot be trusted with
12
00:00:40.759 --> 00:00:43.640
real gold jewelry, because have you seen the price of
13
00:00:43.679 --> 00:00:45.560
gold these days?
14
00:00:46.359 --> 00:00:49.960
Gold has just been on this record breaking tear and
15
00:00:50.079 --> 00:00:52.840
now the price has been going up for a few years,
16
00:00:53.679 --> 00:00:56.359
but last year was the best year for gold since
17
00:00:56.520 --> 00:00:58.079
nineteen seventy nine.
18
00:00:58.600 --> 00:01:01.960
This is Maria Aspin. She's a finance correspondent at NPR,
19
00:01:02.240 --> 00:01:04.359
and she says gold tends to be seen as a
20
00:01:04.359 --> 00:01:07.400
safe haven investment when things are looking scary in the world.
21
00:01:07.680 --> 00:01:10.760
It's sometimes called part of the fear trade. So in
22
00:01:10.799 --> 00:01:13.040
the past year, we've had a trade war, we've had
23
00:01:13.040 --> 00:01:16.400
a real war in Iran, We've had an energy crisis
24
00:01:16.519 --> 00:01:21.159
where we've seen concerns about inflations still not being under control,
25
00:01:21.519 --> 00:01:24.519
and gold is often seen as a hedge against all
26
00:01:24.560 --> 00:01:24.840
of that.
27
00:01:25.519 --> 00:01:28.079
So maybe you're wondering should I get in on this
28
00:01:28.400 --> 00:01:31.079
if gold is doing so well? And I have heard
29
00:01:31.120 --> 00:01:34.680
a lot of ads on YouTube and podcasts suggesting exactly that.
30
00:01:37.000 --> 00:01:39.079
On this episode of Life Get I talked to Maria
31
00:01:39.120 --> 00:01:41.680
about this will go over what it actually means to
32
00:01:41.680 --> 00:01:44.680
buy gold. You don't necessarily have to own the physical stuff,
33
00:01:44.920 --> 00:01:47.439
whether it's a good long term investment because the price
34
00:01:47.560 --> 00:01:50.560
is super volatile, and how it's returns compared to the
35
00:01:50.599 --> 00:02:03.599
stock market over time. Maria, you just shared some of
36
00:02:03.640 --> 00:02:05.799
the reasons that people are buying gold right now. I
37
00:02:05.879 --> 00:02:08.800
think in a lot of cultures too, that's just the
38
00:02:08.840 --> 00:02:12.000
thing you do. You buy someone gold for their birthday
39
00:02:12.039 --> 00:02:15.639
or when they graduate, and it's seen as more reliable
40
00:02:15.719 --> 00:02:19.400
than the currency in some countries. So I wonder is
41
00:02:19.400 --> 00:02:22.199
there a currency element in the US as well now,
42
00:02:22.199 --> 00:02:25.400
where people are like, the dollar's value is dropping, so
43
00:02:25.960 --> 00:02:28.080
we're now more bullish on gold.
44
00:02:28.800 --> 00:02:33.360
Yeah, And actually it's not even the US. It's central
45
00:02:33.400 --> 00:02:36.080
banks around the world have traditionally held a lot of
46
00:02:36.120 --> 00:02:40.960
their reserves in US dollars, and last year, especially between
47
00:02:41.639 --> 00:02:44.360
President Trump slapping a whole bunch of tariffs on almost
48
00:02:44.439 --> 00:02:47.479
everything the US imports, as well as some of his
49
00:02:47.639 --> 00:02:52.159
threats to the Federal Reserve's independence, all of that yielded
50
00:02:52.240 --> 00:02:55.360
what was known as a sell America trade. In other words,
51
00:02:55.400 --> 00:02:58.479
like countries around the world, governments around the world started
52
00:02:58.520 --> 00:03:02.240
worrying about the safety and security of the US government
53
00:03:02.319 --> 00:03:06.400
and the US system and started rethinking whether they wanted
54
00:03:06.400 --> 00:03:09.919
to hold as many of their reserves in US dollars,
55
00:03:10.439 --> 00:03:13.840
And we saw many central banks sell some dollars and
56
00:03:14.080 --> 00:03:18.599
swap to gold. So that contributed to driving the price
57
00:03:18.599 --> 00:03:21.240
of gold up. And then everyone sees the price of
58
00:03:21.240 --> 00:03:23.159
gold goes up, which makes you and me sit down
59
00:03:23.199 --> 00:03:26.120
and be like, oh, gold is really going up? Should
60
00:03:26.120 --> 00:03:27.960
I invest in it? Maybe it's a good investment. I
61
00:03:27.960 --> 00:03:29.039
don't want to be left behind.
62
00:03:29.360 --> 00:03:33.680
Right when we say gold prices are going up, what
63
00:03:33.759 --> 00:03:36.520
are we actually looking at. Is this the price of
64
00:03:36.560 --> 00:03:38.680
an ounce of physical gold?
65
00:03:39.159 --> 00:03:41.759
Yes, it's the price of an ounce of physical gold,
66
00:03:41.919 --> 00:03:44.599
But there are a couple of different prices there's the
67
00:03:44.759 --> 00:03:47.400
spot price, which is what it is to buy gold
68
00:03:47.479 --> 00:03:51.199
on the spot, meaning right now. Or there are gold futures,
69
00:03:51.319 --> 00:03:54.319
which is like any other future, a contract that an
70
00:03:54.319 --> 00:03:57.199
investor enters into to buy gold when it hits a
71
00:03:57.199 --> 00:04:01.879
certain price now. Spot gold can often influence
Load full transcript
the price
72
00:04:01.919 --> 00:04:05.759
of futures, and they tend to be connected. Sometimes there's
73
00:04:05.840 --> 00:04:09.560
a big difference, but often not. Gold jewelry has long
74
00:04:09.759 --> 00:04:12.560
been a way of buying gold, a way of storing
75
00:04:12.719 --> 00:04:15.520
value and giving people gifts or making sure that your
76
00:04:15.560 --> 00:04:19.319
loved ones has something that has an inherent worth in
77
00:04:19.319 --> 00:04:22.240
and of itself. Right, we could go to Costco today
78
00:04:22.319 --> 00:04:23.120
and buy some gold.
79
00:04:23.800 --> 00:04:27.560
So when we're buying gold, it could be literal gold bars,
80
00:04:27.639 --> 00:04:29.399
but there are also lots of other ways to buy
81
00:04:29.600 --> 00:04:33.560
yess And frankly, when we're talking about should you buy
82
00:04:33.600 --> 00:04:37.120
gold as part of your broader investment portfolio, we're probably
83
00:04:37.160 --> 00:04:40.480
talking about some of the less literal types of gold.
84
00:04:40.639 --> 00:04:44.680
So you could buy into their exchange traded funds or
85
00:04:44.680 --> 00:04:48.160
ETFs that are pegged to the price of gold. You
86
00:04:48.199 --> 00:04:52.519
could also buy into companies or funds backed by the
87
00:04:52.560 --> 00:04:56.399
stock of companies that are like in the gold industry,
88
00:04:56.480 --> 00:05:01.000
so like mining companies, I mean literally the companies selling
89
00:05:01.120 --> 00:05:03.680
the modern day equivalent of picks and shovels.
90
00:05:04.120 --> 00:05:07.079
Why would you choose one of these options over another
91
00:05:07.120 --> 00:05:08.279
if you were going to buy gold.
92
00:05:08.920 --> 00:05:12.759
So jokes about costco aside, there are things you have
93
00:05:12.839 --> 00:05:17.000
to think about with each type of investing in gold
94
00:05:17.000 --> 00:05:19.480
that you're considering, and let's say investing in precious metals
95
00:05:19.519 --> 00:05:22.759
more generally, if you're buying the physical stuff, you have
96
00:05:22.839 --> 00:05:24.560
to think about where are you going to store it?
97
00:05:24.720 --> 00:05:27.639
Do you have enough space, is it secure? Are you
98
00:05:27.680 --> 00:05:31.759
worried about like home invasions or robberies, or like do
99
00:05:31.839 --> 00:05:35.120
you have insurance? There are all of these downsides of
100
00:05:35.160 --> 00:05:39.160
buying the physical valuable thing and keeping it somewhere where
101
00:05:39.160 --> 00:05:42.040
you have to spend time, money, or find space to
102
00:05:42.079 --> 00:05:45.240
store it. As a broader investment class, if you're buying
103
00:05:45.279 --> 00:05:49.360
anything that's like not a mining company, but pegged to
104
00:05:49.720 --> 00:05:53.800
the price of gold, like a gold back DTF. Gold
105
00:05:53.959 --> 00:05:58.560
doesn't pay dividends or interest in the same way that
106
00:05:58.680 --> 00:06:02.519
stocks or bronds do. So
you're buying something or you're
107
00:06:02.519 --> 00:06:05.959
buying a fund peg to something, and you basically have
108
00:06:06.040 --> 00:06:08.480
to hold it until the price goes up and you
109
00:06:08.519 --> 00:06:10.480
sell it at the right time and reap the profit.
110
00:06:11.120 --> 00:06:14.680
And this is something that has made like Warren Buffett,
111
00:06:14.680 --> 00:06:19.399
the legendary investor, say yeah, gold isn't really worth it
112
00:06:19.600 --> 00:06:21.800
because you could buy a lot of other types of
113
00:06:21.839 --> 00:06:25.399
investments like company stocks or even land, and they will
114
00:06:25.560 --> 00:06:29.879
generate actual income and revenue and pay dividends. If you're
115
00:06:29.920 --> 00:06:31.920
buying a share of a company, you are in theory
116
00:06:32.079 --> 00:06:36.120
like watching that company make more money and grow in
117
00:06:36.199 --> 00:06:40.040
value over time, and you're benefiting from that gold. It's
118
00:06:40.079 --> 00:06:44.360
more about holding on to it and waiting to time
119
00:06:44.399 --> 00:06:45.879
your sale of it correctly.
120
00:06:46.199 --> 00:06:50.000
Whereas you'd get interest if you invest in bonds, and
121
00:06:50.160 --> 00:06:53.240
you get dividends if you invest in stocks with gold,
122
00:06:53.600 --> 00:06:56.279
you wouldn't get either of those right.
123
00:06:56.600 --> 00:06:59.839
So I talked about this with Katie Klingonsmith. She's the
124
00:07:00.040 --> 00:07:04.439
chief investment strategists for the financial advisor Edelmann Financial Engines.
125
00:07:05.000 --> 00:07:09.360
We look to include investments that make returns over time.
126
00:07:09.839 --> 00:07:13.959
And when what invests in gold, what is simply hoping
127
00:07:14.000 --> 00:07:17.399
that the price of gold goes up. When what invests
128
00:07:17.399 --> 00:07:20.879
in a company, what is hoping that that company grows
129
00:07:20.959 --> 00:07:24.040
over time, that it actually is producing things, making earnings
130
00:07:24.120 --> 00:07:25.800
reinvesting in the company.
131
00:07:25.879 --> 00:07:28.839
So she doesn't automatically include gold or other precious metals
132
00:07:28.879 --> 00:07:31.839
in the investment portfolios that she creates for her clients.
133
00:07:32.240 --> 00:07:33.879
Okay, so it sounds like the point here is that
134
00:07:33.959 --> 00:07:37.000
when you buy stock in a company, that stock price
135
00:07:37.079 --> 00:07:38.959
is supposed to go up and down based on the
136
00:07:38.959 --> 00:07:43.720
company's fundamentals, like its product, it's profits, it's potential.
137
00:07:43.800 --> 00:07:46.920
Yes, And whereas as we've seen with the super volatile
138
00:07:46.959 --> 00:07:50.199
price of gold in the past year and frankly the
139
00:07:50.279 --> 00:07:54.279
volatile price of gold over time, yes it's shiny, Yes,
140
00:07:54.319 --> 00:07:57.519
it's solid. It's something physical that a
lot of cultures
141
00:07:57.560 --> 00:08:01.079
you know, have decided has intereent value. But it doesn't
142
00:08:01.240 --> 00:08:03.879
do anything to actually make the price go up. It's
143
00:08:04.000 --> 00:08:08.000
just kind of what external factors are making other investors
144
00:08:08.240 --> 00:08:11.360
decide that it's more expensive. And as we've seen in
145
00:08:11.399 --> 00:08:13.959
the past year, there's kind of an element of like
146
00:08:14.759 --> 00:08:17.000
fomo right now, you know, the price of gold has
147
00:08:17.040 --> 00:08:19.879
been going up, So should I buy gold because I
148
00:08:19.879 --> 00:08:21.959
don't want to miss out on this investment that's going
149
00:08:22.040 --> 00:08:25.319
up and up. One investor I talked to called it
150
00:08:25.439 --> 00:08:28.439
the momentum trade, and you know that comes back to
151
00:08:29.439 --> 00:08:32.480
central banks are buying more into gold, so retail investors
152
00:08:32.480 --> 00:08:36.039
see the price go up and they buy more into gold.
153
00:08:36.159 --> 00:08:38.799
And that's all great until something happens to kind of
154
00:08:38.799 --> 00:08:41.559
snap the spell, and we're all like, oh wait, maybe
155
00:08:41.600 --> 00:08:44.080
we are over exposed to gold right now?
156
00:08:45.159 --> 00:08:49.559
How does gold compare as an investment over time? To say,
157
00:08:49.679 --> 00:08:52.759
investing in an S and P five hundred index fund over.
158
00:08:52.600 --> 00:08:55.840
The long haul, those stock market outperforms gold. You know,
159
00:08:55.879 --> 00:08:59.320
there have been years when gold has outperformed the stock market,
160
00:08:59.320 --> 00:09:01.639
but over like the last thirty years, the S and
161
00:09:01.639 --> 00:09:05.759
P five hundred has returned about ten percent and gold
162
00:09:05.799 --> 00:09:08.919
has returned less than that. It's over the last thirty
163
00:09:09.000 --> 00:09:11.159
years or so, gold has returned more along lines of
164
00:09:11.159 --> 00:09:11.799
eight percent.
165
00:09:12.399 --> 00:09:17.320
Okay, it seems like, particularly in this moment, it would
166
00:09:17.320 --> 00:09:20.240
have been a great time to buy gold a year ago,
167
00:09:21.000 --> 00:09:24.039
with the benefit of hindsight, of course, but now that
168
00:09:24.039 --> 00:09:27.440
the price is so high, as you mentioned, if you
169
00:09:27.519 --> 00:09:30.120
did want to buy gold, would now really be the time.
170
00:09:30.679 --> 00:09:33.240
Personally, I'm not sure it would be. But you know,
171
00:09:33.440 --> 00:09:36.440
I'm not a certified financial planner, but I've talked about
172
00:09:36.440 --> 00:09:40.240
it with certified financial planners like Lee Baker. He is
173
00:09:40.919 --> 00:09:44.960
the founder and CEO of Clari's Financial Advisors in Atlanta.
174
00:09:45.399 --> 00:09:49.080
There tends to be, in my opinion, some over hyping
175
00:09:49.600 --> 00:09:52.799
of gold in that now it's sort of like, hey,
176
00:09:53.279 --> 00:09:57.799
gold doubles, triples and blah blahlah blah blah, and there
177
00:09:57.799 --> 00:10:01.279
tends to be a push where people are jold coerced
178
00:10:02.120 --> 00:10:06.720
led into what I would say is an overly aggressive
179
00:10:06.759 --> 00:10:09.919
allocation of goal because it's doing well. Yet we know
180
00:10:10.159 --> 00:10:13.519
that looking in the rear view mirror to set your
181
00:10:13.559 --> 00:10:16.879
priorities and how you want to allocate your assets is
182
00:10:16.919 --> 00:10:17.679
a bad thing to do.
183
00:10:17.960 --> 00:10:20.600
I think that's just so important for any kind of investment, Like,
184
00:10:21.159 --> 00:10:23.120
don't buy into something just because you're looking into the
185
00:10:23.200 --> 00:10:25.799
rear view mirror and it's done really well in the past.
186
00:10:26.679 --> 00:10:29.320
If you did decide that you wanted to have some
187
00:10:29.519 --> 00:10:32.879
gold in your portfolio to just to try it out,
188
00:10:32.960 --> 00:10:36.159
just because you think the price is going to continue
189
00:10:36.200 --> 00:10:40.200
to go up, what percentage of your investments might a
190
00:10:40.240 --> 00:10:44.240
financial advisor suggest that you shift from stocks or bonds
191
00:10:44.279 --> 00:10:44.799
to gold.
192
00:10:45.519 --> 00:10:48.559
So I will start by telling you that the advice
193
00:10:49.159 --> 00:10:52.200
out there is all over the place. The hedge fund
194
00:10:52.200 --> 00:10:57.679
billionaire Ray Daallyo, who founded Bridgewater associates. He's out there
195
00:10:57.720 --> 00:11:00.519
saying you should put as much as fifteen percent of
196
00:11:00.559 --> 00:11:05.639
your portfolio in gold. Now, that is super aggressive compared
197
00:11:05.679 --> 00:11:08.440
to what most other advice is. Some of the financial
198
00:11:08.440 --> 00:11:12.879
advisors I've talked to, like Katie, they say maybe none.
199
00:11:13.000 --> 00:11:15.639
You know, they do not automatically include any gold in
200
00:11:15.679 --> 00:11:19.120
the portfolios that they create for clients. And then Lee,
201
00:11:19.600 --> 00:11:22.200
he's kind of middle of the road. As you heard.
202
00:11:22.279 --> 00:11:25.879
He thinks that gold is pretty overhyped these days. But
203
00:11:25.960 --> 00:11:28.559
he has advised clients to buy into commodities as part
204
00:11:28.600 --> 00:11:32.559
of a more diversified portfolio. And this is his general advice.
205
00:11:33.039 --> 00:11:35.600
At five percent, I start to get a little nervous
206
00:11:36.159 --> 00:11:40.399
because something can go wrong, and it can go wrong
207
00:11:40.639 --> 00:11:45.480
at the wrong time and have an oversized impact on
208
00:11:45.559 --> 00:11:46.440
your portfolio.
209
00:11:46.799 --> 00:11:49.360
So less than five percent his advice is less than
210
00:11:49.399 --> 00:11:52.080
five percent, And I
should point out that's again his
211
00:11:52.240 --> 00:11:57.559
general advice for investing in any one thing, whether it's gold,
212
00:11:57.799 --> 00:12:03.519
whether it's one particular stock. So his advice is five
213
00:12:03.559 --> 00:12:06.159
percent is starting to be too much.
214
00:12:06.720 --> 00:12:09.960
What about precious metals in general, Like, if you're trying
215
00:12:09.960 --> 00:12:12.840
to diversify your portfolio, I wonder does it also make
216
00:12:12.879 --> 00:12:15.200
sense to invest in silver or copper.
217
00:12:16.120 --> 00:12:18.120
Yeah, I mean, and we've seen sort of silver and
218
00:12:18.159 --> 00:12:21.960
copper kind of mimic what's going on with gold. So
219
00:12:22.080 --> 00:12:24.919
silver and copper have hit record highs also, but there's
220
00:12:25.000 --> 00:12:29.399
so much less expensive, like silver is trading at eighty
221
00:12:29.480 --> 00:12:32.720
dollars per ounce versus forty five hundred dollars per ounce
222
00:12:32.720 --> 00:12:37.200
for gold. That said, there are some more use cases
223
00:12:37.559 --> 00:12:41.720
for silver and copper in more industrial purposes than we
224
00:12:41.759 --> 00:12:44.159
see for gold. Gold can be used in some electronics,
225
00:12:44.159 --> 00:12:47.679
and obviously it's used for jewelry, but with silver and copper,
226
00:12:47.799 --> 00:12:52.679
they're used in construction and computer chips and solar panels,
227
00:12:52.759 --> 00:12:57.200
so there's like real world demand and applications for them
228
00:12:57.480 --> 00:13:01.320
beyond what there is for gold. Again, and most of
229
00:13:01.320 --> 00:13:04.679
the financial advisors I talked to say, if you're looking
230
00:13:04.840 --> 00:13:08.159
to get into gold, maybe look for a broader precious
231
00:13:08.159 --> 00:13:12.360
metals or commodities fund that gives you some exposure but
232
00:13:13.320 --> 00:13:14.679
also hedges your risk.
233
00:13:14.559 --> 00:13:19.840
A little bit. Maria Aspin, thank you so much, Thank
234
00:13:19.879 --> 00:13:24.639
you so much, pleasure to join you all. Right, time
235
00:13:24.679 --> 00:13:27.799
for a recap. The price of gold has skyrocketed over
236
00:13:27.799 --> 00:13:30.600
the past year, so last year would have been a
237
00:13:30.639 --> 00:13:34.480
great time to buy, but now not necessarily looking in
238
00:13:34.519 --> 00:13:37.240
the rear view mirror to make investment choices is not
239
00:13:37.600 --> 00:13:40.759
the best strategy. Also, over the long term, the S
240
00:13:40.799 --> 00:13:43.720
and P five hundred outperforms gold. But if you'd like
241
00:13:43.759 --> 00:13:46.320
to add some to your portfolio to diversify a bit
242
00:13:46.360 --> 00:13:49.799
and maybe take advantage of any further price increases, Maria's
243
00:13:49.799 --> 00:13:52.879
source said to aim for less than five percent. You
244
00:13:52.919 --> 00:13:55.120
can buy gold by the bar. You can invest in
245
00:13:55.159 --> 00:13:58.360
gold futures, though that's generally something only professional investors do.
246
00:13:58.799 --> 00:14:01.639
You can also invest a fund that tracks the price
247
00:14:01.639 --> 00:14:04.120
of gold, and you can invest in companies that are
248
00:14:04.159 --> 00:14:08.240
involved in the gold economy, like gold miners or retailers. Also,
249
00:14:08.320 --> 00:14:11.039
if you want to diversify in general, maybe consider other
250
00:14:11.080 --> 00:14:14.080
precious metals in addition to gold, like silver and copper.
251
00:14:14.399 --> 00:14:17.399
The thing about those is they are also used in industry,
252
00:14:17.639 --> 00:14:20.399
so their value is pegged in part to their usefulness,
253
00:14:20.559 --> 00:14:27.600
as opposed to gold, which runs largely on vibes. All right,
254
00:14:27.639 --> 00:14:30.320
that's our show. A reminder, by the way, you can
255
00:14:30.360 --> 00:14:32.519
sign up for life Kit Plus to support our work
256
00:14:32.519 --> 00:14:36.080
at NPR and get curated playlists on popular Life Kit topics.
257
00:14:36.360 --> 00:14:40.559
Start listening today. At plus dot NPR dot org slash Lifekit.
258
00:14:41.639 --> 00:14:44.799
This episode of Life Kit was produced by Margaret Serino.
259
00:14:44.840 --> 00:14:47.919
Our digital editor is Malica garib and our visuals editor
260
00:14:47.960 --> 00:14:48.320
is CJ.
261
00:14:48.480 --> 00:14:48.960
Riklon.
262
00:14:49.360 --> 00:14:52.799
Megan Kin is our senior supervising editor, and Beth Donovan is.
263
00:14:52.720 --> 00:14:53.840
Our executive producer.
264
00:14:54.159 --> 00:14:57.399
Our production team also includes Andy Tagle, Clairemriy Schneider, and
265
00:14:57.440 --> 00:15:00.960
Sylvie Douglas. Engineering support comes from You Aisha Highness, with
266
00:15:01.120 --> 00:15:05.840
fact checking by Tyler Jones. I'm Mariel Segarra. Thanks for listening.