Home  |  Personal Finance  |  Investing  | 

Understanding Hard Asset Stocks

Is investing in hard asset stocks the same as investing in commodities?

To properly view this site, javascript must be enabled and Flash version 9 or higher must be installed.
Get the latest Flash player
David John Marotta
President, Marotta Wealth Management, Inc., Marotta Wealth Management, Inc.
http://www.emarotta.com  
434-244-0000

David John Marotta is the President of Marotta Wealth Management, a fee-only financial planning and asset management firm in Charlottesville, Virginia. He is an oft-quoted writer and speaker on financial matters and his weekly financial column can be found at www.eMarotta.com

Is investing in hard asset stocks the same as investing in commodities?

 

This expert: 182,563 views

This series: 8,317 views

Download to Mobile Device
Tags:

Money

,

Financial

,

Planning

,

Investment

Comments:

0 (Read Comments) (Add Comment)

Print

Transcripts

Speaker:Is investing in hard-assets stock the same as investing in commodities?

David Marotta:You need to keep in mind that investing in hard-asset stocks is not the same thing as investing in commodities. Commodities are things like gold, silver, oil; it even includes things like soybean, contracts and things like that. But investing in a commodity like gold will generally hold its value but it wont appreciate the value. When you invest in a gold mining company, they actually have profits, returns, they are expanding their business. Studies have shown that investing in stocks appreciates at about 6.

5% over inflation. Investing in commodities ends up appreciating just with inflation. So, over the last 200 years, stocks have been appreciating about 6.

5% of inflation. But a dollars worth of gold 200 years ago, after in just adjusting for inflation is worth about $1.

7 today. Now, a dollar 200 years ago is worth about $0.

7 today because of inflation. So, a dollar isnt worth as much but a dollars worth of gold back then is equivalent to a dollars worth of gold today. So, gold and commodities hold their value but hard-asset stocks actually appreciate value.

Other Videos

  • What types of mortgages are available?

    What types of mortgages are available?

    In this video, mortgage advisor, Jeff Thomas describes how to purchase your first home and the process you must go through to obtain a mortgage. This video is designed for first time homebuyers and also provides valuable information to indivduals who have purchased a home in the past. This video includes an overview of the four parts of a loan file, mortgage jargon, the loan process, house hunting, the types of mortgages available and the 7 steps on how to manage your mortgage correctly.
  • What if I've tried to reduce expenses & still can't make my payment?

    What if I've tried to reduce expenses & still can't ...

    Give yourself every advantage when you're facing foreclosure. And get tips on how to avoid finding yourself in that situation. Expert Amelia Robinette explains some of the terminology associated with foreclosure and gives tips to help you get back on track.
  • Is bankruptcy ever the right option?

    Is bankruptcy ever the right option?

  • What is a budget?

    What is a budget?

    In this video, Vikki Frank, Kandance Beamon, and Linda Stroman, financial education providers describe several key areas to address regarding debt reduction and elimination. This video is designed to deliver basic financial information to assist individuals and families to be able to identify goals and process strategies for their specific financial needs. The topics included in this video cover are: self-evaluation of debt load, budgeting strategies, understanding the effects on your credit and scores, why savings is important, how to develop a debt elimination plan, and the importance of financial education and how financial counseling may be useful.
  • What can I do to protect myself from identity theft?

    What can I do to protect myself from identity theft?

    In this video, Linda Sherry details the best ways to prevent identity theft and what you can do if you think your identity has been stolen.
  • Should I give my kids an allowance?

    Should I give my kids an allowance?

    In this video, Deputy Editor of Kiplinger's Personal Finance and author Janet Bodnar answers questions on the many issues surrounding what kids should know about money.