My Least Favorite Commercial

I probably should have made that title plural, because there are a couple of these that really irk me.

Have you seen the really badly done commercials urging people to invest in gold? The production, costuming, acting, and scripts are horrible and that's before I pick apart the whole premise of what they're proposing.

The one I see most often has this middle-aged woman in an 80's looking outfit doing her best to come across as really wealthy (and I guess thereby qualified to tell you how to invest). Her voice (let's hope she's only acting) is about as pompous sounding as any I've ever encountered as she tells you that in "these uncertain times" you should be investing in something with real value, something more substantial than mere paper (such as stocks).

Now, there's no denying the fact that the value of gold has gone up almost exponentially over the last few years and it could continue to go up...or not. She throws in there that it has never been worth zero - such as your stock would be if the company went bankrupt. Thank you, Lady for that brilliant news flash! But that doesn't make it a great investment idea.

Here's the deal, gold is traded on the open market just like everything else. So on any given day it's value may go up or down just like stocks, bonds, mutual funds, or any other investment vehicle that isn't guaranteed. Over the long term it is unlikely that gold will continue the run-up it has had recently and I would contend that right now isn't the best time to get in if you're looking for a growth opportunity (because I think it's already gone up about as far as it's going to for a while, but that's just my opinion). If you're nearing retirement and want a stable asset, gold might not be a bad move.

Gold's value only goes up because mining (supply) currently isn't keeping up with demand. At some point it is likely that mining capacity will increase and bring the price back down as supply begins to more closely resemble demand. That's how market economies work. I guess if it is determined that no more gold exists in the world and suddenly we're dealing with a truly fixed quantity the value might continue to rise, but that doesn't appear to be a short-term reality.

I think the part of this commercial (and the others like it) that bug me the most is that they play on people's worst financial fears (the collapse of the economy). Now, that could happen, but to suggest that gold is the cure for and absolute protection from economic shifts is a little far fetched for my taste.

My point: it's a bad commercial.