This is a legit question. I generally knock gold as an investment when people ask about it, because it's crazy expensive at the moment (and because it's hilarious to watch all the loony goldbugs come out of the woodwork, regurgitating stuff they've read on
the intertubes about "the fiat currency paradigm" and "gold is money". If gold is money, why can't I buy a can of Coke with it?).
But there's a good argument for having a small (say 5%) slice of your portfolio in gold, and it revolves around correlation. Diversification is good, right? And gold's a very good way to diversify your portfolio, because it has near-zero correlation with stocks. So gold tends to move independently of stocks (except in big plunges like the one in August), which gives you some insurance if your stocks go down in price.
So it's not a bad idea to own a bit of gold. The problem is that it has neither yield (like a bond) nor underlying earnings (like a stock) nor any real industrial demand, so actually
making money from gold relies entirely on the
Greater Fool theory. That's why it shouldn't be a big part of your portfolio.
Mostly stocks, some bonds, a bit of cash, and a bit of gold makes for a well-diversified investment portfolio.
The easiest way to buy the shiny yellow stuff is, as MikeDirnt said, the SPDR Gold ETF (stock code O87 on the SGX, or GLD on NYSE). It's big, it's liquid, it trades like a share, there's no GST on it, and if you ever need to cash out, you can sell it and have the money in three days flat.
