While all that glitters may not be gold, people who invest in this precious metal may find that over the long haul, it shows as strong a return as the stock market, says financial analyst Stephen Leeb.
Leeb, editor of the bimonthly newsletter Personal Finance, is particularly bullish on gold and expects that within the next three to five years, values will increase significantly.
"What drives bullion and gold is inflation. When inflation is low, gold prices are low; when inflation starts to accelerate, gold really starts to take off," explains Leeb, who says it's hard to predict when gold prices will begin to go up. However, he says, inflation rates above 4.5 percent could signal a gold price increase.
Gold can be purchased in bullion, gold mining stocks or in gold mutual funds. Prudent investors should not have more than 10 percent of their portfolios in gold, says Leeb, whose top-rated gold mutual funds are shown below.
"Our preferred buy is gold mining stocks in a gold mutual fund because a good gold mining company can do well even if gold prices don't take off," says Leeb. He also likes well-run mutual funds because the managers are typically traveling around the world looking at mining operations. And that could be just the ticket to striking it rich.