What the experts say

Bear market fool’s gold; A health-stock checkup; How much do you tip?

Bear market fool’s gold

When financial markets go topsy-turvy, many investors think gold is the answer, said Walter Updegrave in CNNmoney.com. “What I can’t fathom, though, is how gold acquired—and manages to maintain—this reputation as an anchor of stability.” You need only look at gold’s “gut-wrenching” price fluctuations over the past year to see that the commodity is hardly immune to market volatility. Gold prices were recently down 28 percent from their peak in March. If owning a little precious metal helps you sleep better at night, consider putting 5 percent to 10 percent of your assets in gold—that will keep you nicely diversified, even if it has no other effect. But don’t bother buying gold bars. Just put money into a precious-metals mutual fund or a gold-based exchange traded fund—“a simpler, cleaner, and better way to go than buying coins or bullion.”

A health-stock checkup

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

President-elect Barack Obama’s plans to overhaul the health-care system may not bode well for some health-care stocks, said Conrad De Aenlle in The New York Times. But that’s no reason to shun the sector entirely. The likelihood of a systemwide shakeup has already been priced into the stocks, according to Mark Oelschlager, manager of Live Oak Health Sciences fund. Shares in Eli Lilly and Pfizer “are all trading at multiples that suggest they’re not going to grow in the future,” he says. Yet even in the face of health-care reform, an aging population should serve as a “tailwind” for earnings growth. Besides, health care is typically a safe-haven sector—a good place to be right now. “Typically, you don’t want to buy defensive stocks when you’re in the depths of a bear market,” Oelschlager says, “but a recession takes a long time to get through, and things can get uglier.”

How much do you tip?

The average restaurant tip has steadily crept up from 10 percent in the 1950s to 18 percent today, said Neal Templin in The Wall Street Journal. All told, Americans leave about $42 billion on the table every year, according to Ofer H. Azar, a professor at Israel’s Ben-Gurion University who studied tipping while getting his doctoral degree in the States. While etiquette books actually suggest tipping on the pretax bill, most restaurant customers base their gratuity on the total tab. When service is poor, tips tend to dip slightly—but not as much as you’d think. In fact, the biggest influence on how much we tip isn’t quality of service but social pressure, according to Michael Lynn of the Cornell University School of Hotel Administration. “If I want the server to really like me, I have to leave an above-average tip,” he says.

To continue reading this article...
Continue reading this article and get limited website access each month.
Get unlimited website access, exclusive newsletters plus much more.
Cancel or pause at any time.
Already a subscriber to The Week?
Not sure which email you used for your subscription? Contact us