I'm standing at my office bookshelf rummaging in a small box of junk... I mean, treasures. There's a transistor radio I carried on my paper route at 14, a broken watch, some old photos...

Ah, here's what I'm looking for -- my high school ring, class of '69. I don't remember what I paid for it - around $100, I think. But this clunky heirloom that I wore for only a few months is worth its weight in gold. At half an ounce, according to the kitchen scale, that's around $500.

Gold tends to do well in troubled times, and economic worries and the falling dollar have pushed gold over $1,050 an ounce this week, the latest in a string of recent records. Gold's advocates point out it's been in demand throughout history - since before written history, in fact. Unlike currency, it doesn't rely on the full faith and credit of any government. It has value because it's rare, beautiful, eternal and useful.

So, is this troubled time a good time to invest in gold? Its promoters say "yes," though they say that in good times, too, arguing gold is a hedge against a coming crash.

Today, there are lots of ways to invest in gold other than going to the jewelry store or buying coins. Some purveyors will sell you gold but keep it in their vaults. A few exchange-traded funds keep hoards of gold and sell shares that rise and fall with gold prices, just as stock-owning ETFs rise and fall with stock prices. One especially popular approach is to invest in stocks of gold-mining companies.

Lipper, the market-data company, tracks 73 gold-oriented mutual funds, most of them bet on gold-mining stocks. And the results are none too shabby. From Jan. 1 through Oct 1, those funds returned nearly 35 percent, about double the return of the U.S. stock market, measured by the Standard & Poor's 500. And get this: Those gold funds have returned more than 14 percent a year for the past five years, while funds tracking the S&P 500 have returned almost exactly nothing - 0.01 percent a year. During those five years, gold funds have beaten all Lipper fund categories, save those specializing in stocks of China, emerging markets and Latin America.

If you're a speculator - someone willing to take big chances with money that you can afford to lose - I say, have at it. In fact, with an exchange-traded fund you can make money even if you think gold's run is over. You'd do that by "selling short" - selling borrowed shares at today's high price in hopes of someday paying back the loan with shares bought for less.

But what about the typical long-term investor who is preparing for things like college and retirement?

To you, I suggest treading with caution -- or avoiding this path altogether. It's always risky to jump on a bandwagon late in the parade. Most of the gold run-up may be over, and gold's long-term performance is nothing great.

In his bestselling book Stocks for the Long Run, Jeremy J. Siegel, a finance professor at the University of Pennsylvania's Wharton School, reports that from 1802 through 2006, the "real return" on gold -- its gains on top of inflation -- averaged just 0.3 percent a year, compared to 6.8 percent for a basket of stocks representing the entire market. Results are much the same in more recent periods, with gold's real return averaging 0.5 percent a year from 1946 through 2006, versus 6.9 percent for stocks.

There have been exceptions. Gold returned 8.8 percent a year from 1966 through 1981, while stocks lost an average of 0.4 percent a year. But that was a period of very high inflation - about 7 percent a year - and investors do turn to gold when inflation spikes, driving the price up. Today, inflation is extremely low.

So maybe this is a better time to sell gold than to buy it. On a purely financial basis, it might well pay to cash in some unneeded trinket like my high school ring and invest the proceeds on something with better prospects for compounding. You can sell gold at a jewelry store, or through any number of online dealers.

Me? I'm going to keep my ring, at least until my next reunion. I don't want to convert it to grocery money, and at the moment I can't think of anything to buy that would last like gold - forever. In the end, the sentimental value outweighs the monetary one.

Jeff Brown is an experienced business journalist and personal finance columnist who has written for The Philadelphia Inquirer, The New York Times, and TheStreet.com. Read his bio to learn more about him.

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