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Gold is not always golden

One-ounce, 24-karat gold proof blanks are seen at the U.S. West Point Mint facility in West Point, N.Y. (Reuters/Shannon Stapleton, File)

“What do you think about gold as an investment?” If I had a dollar for every time someone asked me that question, I’d have a good bit of money to invest in something that wouldn’t be as risky as investing in gold.

Whenever the stock market is down or gets particularly prickly, people want to start a gold rush. But be very careful about assuming that gold is a relatively risk-free way to wealth and foolproof protection against the roller-coaster downs of the Dow.

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Real Deal Retirement editor Walter Updegrave recently wrote a great column on the risks of investing in gold. (Whenever you hear a pitch for gold investment read this column.)

“When the stock market is soaring one day and seemingly teetering on the verge of collapse the next, as has been the case in recent weeks, many investors inevitably turn to gold,” Updegrave writes. “But if you’re looking to protect your portfolio from losses, following the rush into gold is a big mistake.”

Here’s what you’ve heard about the reason to go for the gold, Updegrave writes:

— It’s the ultimate safe haven.
— It’s a storehouse for value.
— It’s the standard of wealth.
— It’s a safeguard against calamity.

It’s not that some investment in gold is bad, it’s just that “if you’re looking to put your money in an investment you can count on to maintain its value in a variety of economic and market conditions, gold is not where you want to be,” Updegrave says. “Far from offering stability, gold is extremely volatile.”

Want some more convincing? Read more of what Updegrave has to say about gold.

Fool me once or twice, and it’s still shame on you

You probably know the adage, “Fool me once, shame on you. Fool me twice, shame on me.”
But we’ve got to update that proverb to reflect the constant bad business practices that fool millions of consumers. How about: “Fool me once, shame on you. Fool me twice, still shame on you.”

To that end, the FoolProof Foundation, a nonprofit organization with a mission to create a legion of skeptical consumers, is out with its Hall of Shame Award – just in time for Financial Literacy Month. The award, it says, “is here to remind you to be a skeptic when it comes to any business that wants to touch your money.” The dastardly deeds included:

— An auto dealer that had to pay a $6.4 million fine for “providing damaging, inaccurate consumer information to credit reporting companies,” according to the Consumer Financial Protection Bureau.

— A major investment firm that paid $4 million to “settle charges that it falsely stated on its private banking website and in marketing materials that advisers are compensated “based on our clients’ performance; no one is paid on commission,” according to the Securities and Exchange Commission.

— A major credit card company that was ordered to pay $18.5 million for illegal student loan servicing practices and debt-collection tactics.

Goldman Sachs pays $5 billion to settle allegations it sold shoddy mortgages

Ten companies made the cut. You just have to vote which business’s bad behavior deserves the top honor. Read about the 10 finalists and then vote.

Color of Money Question of the Week

Which business do you think deserves the Hall of Shame Award and why? Send your comments to colorofmoney@washpost.com. Please include your name, city and state. Put “Hall of Shame” in the subject line.

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‘Affluenza’ teen Ethan Couch finally benched

“Affluenza” teenager Ethan Couch of Texas violated his probation and was recently sentenced to nearly two years in jail for the four deaths he caused in a 2013 car crash.

‘Affluenza teen’ Ethan Couch ordered to serve nearly two years in jail

During his first trial, Couch’s defense team said his wealthy, overindulgent parents were at fault for the fatalities because they “coddled him into a sense of irresponsibility — a condition an expert witness referred to as affluenza,” wrote Ashley Welch of CBS News.

For last week’s Color of Money Question, I asked: “Do you think the affluenza defense is legitimate?” There were so many comments, and overwhelming aghast, about the sentencing and sympathy for the families who lost loved ones.

Waneta Achaj of Alexandria, Va., wrote: “Affluenza is an interesting word, but it isn’t an excuse. Ethan Couch was spoiled by his parents. Money made it easier to do so, but even working-class parents can have a child who is always protected from the consequences of his actions because it is always someone else’s fault.”

” ‘Affluenza’ is just the deluxe version of blaming it on the parents,” wrote Bob Zormeir of Kirkland, Wash. “Were they irresponsible and a bad influence on their child? Sure seems that way. Did excess money make it easier for all of them to act stupidly? Looks like it. Does this excuse the actions of their child? Nope. Money or not, you’re still responsible for your actions and for their consequences.”

Wanda Coonce of Richardson, Tex., wrote: “This defense is the most absurd excuse I think I have ever heard. Much worse than being a spoiled rotten kid, he has never shown any remorse for what he did. His parents are equally responsible. A child learns what they live. If he doesn’t know right from wrong at his age, he never will.”

“What will they think of next! Two years is not enough for that boy. The parents should be jailed too for raising a child like that,” wrote Carolyn Joseph of Wynnewood, Pa.

Camille Cutler of El Mirage, Ariz., wrote: “Mr. Couch’s sentence was pathetically short and gives such short shrift to his victims. His sentence should have been much longer. Yes, he and his family could afford high-prized lawyers to defend him, but what kind of message does that sent to the rest of society?”

“Two lousy years in jail?” wrote Ed Helvey of Box Elder, S.D. “How much are lives worth these days? Mine just happens to be priceless — there is no number that can be placed on the value of my life. And I dare say the same is true for those lives ended so tragically.”

Sarah Owen of Blacksburg, Va., wrote: “Is this diagnosis or defense legitimate? NO. It is just the manifestation of the entitlement that so many suffer from these days. This young man is no different from others who have gotten no guidance from strong parents (or other parental figures). He just happens to be part of the ‘1% club’ who has the money to hire a very, very creative lawyer.”

I definitely agreed with Jeffrey Kail of New Jersey who wrote: “His upbringing may be the cause of his problems, but the decision by the judge to buy this excuse when people have died is more irresponsible.”

Readers may write to Michelle Singletary at The Washington Post, 1301 K St. NW, Washington, D.C., 20071, or michelle.singletary@washpost.com. Personal responses may not be possible, and comments or questions may be used in a future column, with the writer’s name, unless otherwise requested. To read previous Color of Money columns, go to washingtonpost.com/business.

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