Originally Posted by La literatura
Would you agree that it's essential to a diversified portfolio to have some investment in commodities like gold or silver? And what percentage is a good "hedge against inflation"?
Holding a broad based stock fund is itself a hedge against inflation. I know that saying this will bring out the crazies, but gold isn't a hedge against inflation so much as a hedge against instability. This is fine for short run thinking but if you are investing for the long run its not something you need to worry about. The S&P has outperformed gold over every 30 year period ever.
Homer: [looking at watch] Two hours? Why'd they build this ghost town so far away?
Lisa: Because they discovered gold over there!
Homer: It's because they're stupid, that's why. That's why everybody does everything.