Q: It seems like every time the stock market drops, you hear something on the news about people buying gold. I’ve never done that, and I wonder what I’m missing. - Leslie

A: Leslie, I’ve never done it either, but the rationale is essentially that when the market shows uncertainty – or more specifically, downward uncertainty – people often look for what they consider to be a more stable investment. And in the minds of many, commodities like gold are viewed as that more stable investment.

As we all know, the market goes up and down. But the same is true of bonds, gold, real estate, etc. Everything is only worth what people will pay for it. But I believe that part of the attraction of commodities in down or uncertain markets is the fact that commodities are physical things. In the case of gold or real estate – as my grandfather used to say – “they’re not making any more of it.” So with a finite supply, coupled with tangibility, many consider such assets to have a limited downside and therefore be “safer”.

I can’t say how long this behavior has been happening, but it may be by now that it is a self-fulfilling prophesy. Market goes down, you and everyone else buys gold. Therefore, the price of gold goes up. Once the market settles, you sell your gold at this inflated price. The problem is that you probably sold your stocks at a low point, and are now buying them back at inflated prices because of all the gold-buyers getting back into the market. So any gains you might have gotten in commodities by lucky market timing are probably wiped out by the losses you incurred by leaving the market before the crisis, or getting back into it afterward.

Unless you’re nearing or in retirement, you probably have time to wait out a bear market. If anything, buy into that bear market while prices are low. When the bull returns, you’ll have leaped ahead on your investment strategy by taking advantage of those savings.


Q: I’m in my late 20’s and have been working for almost 10 years, but I still find myself living paycheck- to- paycheck. I just don’t see a way of putting money away for the long-term when I’m trying to pay bills. Is there anything I can do? - Marcus

A: Marcus, I hear your frustration. I fear that there are a lot of people in your shoes, and are probably scoffing at questions about how to measure investment risk or distribute estates equally among family, when people like you are just trying to put food on your table.

Obviously I don’t know more than what you told me about your income, profession, expenses, etc. But as much as I hate to say it, the financial fundamentals that exist in this world apply whether you’re 20 or 60, born with a silver spoon in your mouth or scraping together a couple dollars for rent. You have to either make more money or spend less money.

Can you ask for a raise at work, work more hours, get a second job, or a different job that pays better? I have two nephews who paid their college incidentals by selling plasma. I wouldn’t recommend it, but apparently it works. In my younger years, I would go to nice neighborhoods the night before trash day and take large items that people threw away so I could sell them at garage sales or on Craigslist.

If you don’t see your way to a higher income, is there anything that you can cut? I used to work in delivery and would see houses that were falling down under a rotting roof, and yet they had cable television, fancy basketball shoes, and could afford cigarettes.

If none of these are options, don’t be embarrassed to utilize the social service programs that are available right here in Harvey county. There are food panties, thrift stores, churches, and many other services available for people in need. They’re not all for the homeless or unemployed. They are for people in genuine need, if that’s you, then they are for you. Marcus, my prayers will be with you.


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— Eric Litwiller has spent the last seven years helping people achieve their financial goals through the use of budgets, retirement vehicles and estate planning options. Prior to his current position in fund development at Friends University, he worked for a faith-based financial services firm. He is a firm believer in the importance of using Earthly riches to fulfill a mission of Christian stewardship. He is not a licensed financial planner.