Why buying gold is still a big gamble
Here are three of the week's top pieces of financial advice, gathered from around the web:
Gold: Still a gamble
Investors are once again looking to gold as "insurance against chaos," said Jason Zweig at The Wall Street Journal. The price of gold is up about 20 percent since last July. But investing in it "is still a leap in the dark." I'll admit that the yellow metal has certainly "preserved its purchasing power" over the centuries. The same amount of gold used to pay a Roman centurion's annual salary in the 1st century A.D. would cover a U.S. Army captain's annual salary today. Problem is, "most investors don't lock their money up for a couple thousand years at a time." In the short term, gold's value "fluctuates so wildly" that it can't even be guaranteed to keep up with the cost of living. Adjusted for inflation, gold remains 35 percent below its record highs in 1980.
Personal loans gain popularity
"Ahead of your next big-ticket expense, it may be time to reconsider the personal loan," said Kelli Grant at CNBC. Lenders issued $30.2 billion in personal loans to borrowers with good credit during the first three quarters of 2015, up 67 percent from the same period in 2013, according to credit bureau TransUnion. Low interest rates are the biggest selling point. APRs on a three-year, $10,000 loan start at 5.99 percent at Wells Fargo and Lending Club, compared with 17 percent for the average cash-back credit card. Personal loans are also speedy, with applicants often getting their cash within 48 to 72 hours. But be sure to read the fine print to calculate exactly how much you're saving. Some personal loans offer variable rates, and many lenders charge up-front fees.
Brexit's big investing lesson
Investors who rushed for the exits in the aftermath of the Brexit vote "are kicking themselves now," said Gail MarksJarvis at the Chicago Tribune. Retirement savers may ultimately see losses in some of their mutual funds as a result of the referendum and subsequent market swoon, but "the destruction has been mild compared to what you might have imagined." The stock market has regained nearly all it lost since roughly $3 trillion was wiped out in the immediate panic following Britain's decision to leave the EU. Bonds, meanwhile, "did just what they're supposed to do," protecting investors against big swings in the stock market. As usual, those with a diversified portfolio and the patience to ride out the turmoil came out fine.