- Jan 14, 2016
- By the Gulag wall.
It doesn't hurt to own a small amount of gold.
But as a long term investment for passive income, index funds are the only way to go.
But you need to avoid obsessing over the fluctuating monetary value of your portfolio.
Whether the market goes up or down, by owning index fund ETFs you'll still own a stake in income producing blue-chip firms that make their money selling real goods and services (well, for the most part).
They're a safer investment than property and they have the added bonus that anyone can start buying them, even those on low incomes.
Instead of setting yourself a monetary goal, which encourages short term speculation, set a nominal goal based on the number of ETFs you would like to acquire by a certain date.
Partially hedge your portfolio by buying deep out of the money put options, and when the stock market crashes simply buy more ETFs and keep buying them. Instead of framing it as "oh no the value of my portfolio is way down" frame it as "great, I can now buy more income earning ETFs for less money".
Just my personal take on the matter.
Gold price in last crisis seemed always related to economic fear.