By Karen Wallace
Gold's shimmer has been bright this year. The price of gold has jumped 26% for the year to date through July 28, and the typical fund in the equity precious metals Morningstar Category is up 109% over the same period. And investors have channeled more than $660 million into precious metals funds in the first half of 2016 (through June 30).
We recently asked Morningstar readers whether they had an allocation to gold in their portfolio, and if so, why. On the flip side, we also wanted to hear from those who had no interest in gold. If readers claimed they wouldn't touch it with a 10-foot pole, we wanted to know why not.
Overall, we got just as many answers of yes as we did of no (if not more). The responses we collected reflected quite a wide range of thinking on the matter. They were also nuanced: Even when the respondents were in agreement, there was still room for dissent. For example, many readers opined that gold was a vehicle for speculation rather than investing, but for some that meant they stayed away; for others it meant they happily bought on price dips.
Some readers said they owned collectible gold coins or jewelry, but didn't consider them a true portfolio allocation. Others, meanwhile, said they had a sizable percentage of their portfolios in the physical metal--many of these respondents consider gold to be "insurance" in the case of a cataclysmic event or drastic currency devaluation. "Gold is a risk against monetary mismanagement. It's like an insurance policy, and less like an actual investment," said NDinLA.