Investors Hunt for Alternatives

Neither fund is cheap by conventional standards. Oppenheimer charges a 5.75% front-end load, and a 1% management fee and 0.24% 12b-1 fee annually. Pimco charges a 5.5% front end load, and a total of 1.25% in annual fees, which Levine says are generally justified, because of the cost of running the funds.

"It's not quite a direct investment in commodities, but it does have that flavor," says Jack Ablin, chief investment officer at Harris Bank & Trust in Chicago.

He says in the current market, it's better to make fewer bets. In particular, he's been steering clients away from bonds. "Most investors certainly are clamoring for yield -- there's a comfort in knowing that income will be paid," he says, but warns that "given the backdrop of the Fed and the issue of inflation, that is, in many respects, a flawed strategy. I'd rather own hard assets."

Gold may be the original hard asset and interested investors have several paths to ownership. There are gold mining stocks, metals funds, and even direct ownership.

"Gold is really the defensive player on a basket ball or hockey team -- it takes over when your big scorers are tired," says Frank Holmes, chairman, chief executive and chief investment officer of U.S. Global Investors, which runs the (PSPFX Quote)U.S. Global Investors Global Resources fund, which charges 3.75% a year. "It's a defense against the falling dollar."

"We've said 'don't do it to get rich,'" says Holmes.

Chip Hanlon, chief financial officer of Europacific Capital, a Newport Beach, Calif., investment firm, sells direct ownership certificates for gold, silver or platinum. The metal stays in a government mint in Perth Australia so owners avoid storage charges, often the most expensive aspect of precious metals investing. Hanlon says it's not for everyone, and shouldn't be everything to anyone.