Ending The Rat Race

When it comes time to do my Weekend Financial Roll Call, I often ask myself, "where did the week go?" and I realize that yet another week has passed us by.

At any rate, in between my daily threads for the week, I managed to find a few 'gems' in the blogosphere, and made sure I bookmarked them for future reading.

For example, on Tuesday night I came across Skelliewag, a blog about "planning, creating and growing the online projects you’re obsessed with". I don't even recall as to how I came across this site, but there are some awesome articles throughout the blog, and it is a place I will definitely be visiting on a fairly regular basis.

Another blog that I came across with some cool Canadian flavor, is "Give Me Back My Five Bucks", and the most recent thread is titled, "WARNING: New Rule with Swagbucks!"

The Financial Samurai offers yet another batch of interesting and amusing posts this week, with its most recent, "Never Call In Sick On Friday, Slacker!" I also mentioned this cat last week on my Weekend Financial Roll Call, and I find myself visiting the blog every week.

Lastly, The Financial Blogger posted what I felt was an awesome thread this week, titled, "My Wife's Look At My Company". It discusses the trials, tribulations and what's involved in hustling hard in developing a blog site and how it can impact how your spouse and family perceive your project. I felt that this post related to me in a lot of ways, and I really admired the fact that he was passionate in his pursuits and was glad to read that he is starting to get some dividends from his project.

Personal Finance Blog, a new blog that I have come across in a rather unusual way, also has a post you may be interested in, titled, "Book Review and Contest".

In closing for the week, I have noticed that a couple of more readers have subscribed to my feed this week and would like to thank you for subscribing to my threads; again, thank you to those who continue to visit The Rat's lair and post their comments.

Have a great weekend!

The Rat

A couple of weeks ago I published a post discussing what I considered to be my Top Ten U.S. Equity Plays and mentioned that I would eventually like to buy positions in some of the companies that were listed. I also mentioned that I had no foreign content in my own portfolio, and that I was hoping to change that in the near future.

But what about gold? When I was driving home from work last evening, I was thinking about all the hype I have heard over the past many weeks regarding the importance of having gold (or at least some kind of exposure to gold) in one's portfolio and its amazing rise in value over the past year or so.

This is yet another area in which I have zero exposure, and one in which I am forced to contemplate on whether I want a piece of the action when I have enough new cash saved up for investment purposes.

Rob Carrick of the Globe recently published an interesting article titled, "Buying Gold: An Investor's Guide", and I have to admit, it cleared up a lot of the questions I had in terms of how to get involved in investing in gold and precious metals in general. Essentially, Rob seems to outline the options investors have through the following avenues:

1. Buy actual gold in the form of bars or coins
2. Buy individual gold stocks
3. Buy precious metals mutual funds
4. Buy ETFs
5. Buy closed-end funds

In looking at the above-mentioned options, my preferred options in chronological order of preference would be 1, 2, 4, 5, and 3.

By digging a bit deeper with regards to my # 1 choice, what I found particularly interesting in Carrick's article is that it mentions how the Bank of Nova Scotia has a precious metals division named Scotiamocatta, which also has an operational eStore.

The site mentions how "Scotiabank is Canada’s Gold bank and one of the world’s largest dealers in precious metals, with over three centuries of expertise. We provide a variety of physical products through ScotiaMocatta our precious metals division. Gold and silver are timeless gifts and are convenient and easy to purchase online through the ScotiaMocatta Precious Metals eStore".

Let's see what you could buy today on Scotia's eStore:

For some reason, I like the idea of owning physical gold; Carrick's comments, "owning physical gold does make sense if you're a survivalist or generally concerned about the complete breakdown of society" may be amusing but it does shed some light how having a position in gold could be a good hedge against some sort of financial cataclysmic event.

After reviewing options #2-5 mentioned above, I realized that this is where I start to lose interest in having gold positions. Even if I owned some of the stocks directly (such as Barrick Gold -ABX.T), I would still be betting on companies having to be consistently well-managed AND hope that the price of gold will stay reasonably strong.

If we were to look for some of the cons regarding whether it is a good time to buy into gold, we see that the price may be considered by many to be too high to buy in at this time, and that there are indeed some conflicting viewpoints.

Larry MacDonald recently wrote an article titled, "A bear on gold when the rest are bullish", and discusses how Robert Prechter Jr., the editor of the Elliott Wave Theorist newsletter, seems to be adamant regarding his stance that gold prices will "top out near current prices". He is more bearish while so many people are bullish.

Regardless as to where the price of gold is heading, I am in agreement when Carrick clearly states, "It's no longer just the speculator's delight. Think of it today as an asset class separate from stocks and bonds that you should consider having permanently in your portfolio. You don't need a lot, but you do need some."

Personally, I would like to eventually have a position in gold (option #1 would be my preference); however, I suppose my key point of concern would involve the overall timing and at what point would be the best time to purchase.

What are your thoughts? Do you think it's important to have gold in your portfolio? If so, do you think the price of gold is too high right now, or is the time ripe?