Working Money: Gold by David Penn
From gold bugs and gold standards to
massive derivative speculation, the yellow
metal is back.
All that glitters is not gold, goes the saying. But as far
as investors are concerned, gold seems to be the only asset class with any shine at all. Gold mutual funds — as
noted in Barron’s “Mutual Funds” section for December 16,
2002 — look poised to deliver returns to gold bugs that would
make even the luckiest dotcom speculator salivate with envy.
An exaggeration? Consider the Gabelli Gold Fund AAA,
which is up 75.91% year to date, or perhaps the Rydex
Precious Metals Investor fund, up 43.49% year to date. Taken
as a group, gold-oriented mutual funds are up some 50% in 2002. And these returns come in the wake of impressive
returns in 2001 (almost 19% on average).
Gold fund returns in 2000 were underwhelming in most
instances: the Gabelli Gold Fund (GOLDX) was down about
15.4% in 2000, the Vanguard Precious Metals Fund (VGPMX)
down 9.5% — though when compared to a Standard & Poor’s
500 that was down about 10% for the year, it is apparent a
changing of the guard in which stocks stepped down and gold
stepped up was at hand.