“After enduring three years of misery as his tech-stock holdings declined, Rich Garrett last year shifted his retirement money to a place he considered safer: gold-company stocks,” writes E.S. Browning in today’s Wall Street Journal.

“Sure, gold makes him nervous, too, he says — especially since most of the mining stocks he owns have been down this year. But overall, Mr. Garrett’s gold stocks have soared since he bought them last year. Today, he is one of a number of ordinary Americans who have rediscovered an investment that once was considered hopelessly outmoded — gold.”

” ‘You always get a little twinge when you see your investments go down, but after what I experienced in the Nasdaq, this is nothing compared to that roller-coaster ride,’ says Mr. Garrett, a 59-year-old salesman from a St. Louis suburb. ‘I feel a lot more comfortable with gold than with the Nasdaq, or the Dow, for that matter.’ ”

“Since the start of 2001, stocks of the world’s gold and silver mining companies, as measured by the Dow Jones World Precious Metals Index, have more than doubled in value, while the Nasdaq Composite Index has fallen 21% and the Dow Jones Industrial Average has declined 5%. Last week, amid continuing fears of a resurgence in terrorism, gold rose 2% to $422.20 an ounce on the Comex division of the New York Mercantile Exchange, nearing the 15-year high of $426.40 reached during January.”

“The question is whether gold is a lasting refuge again, or a flash in the pan.”

“One way to see how attitudes toward gold have evolved is to look at a group of recently minted gold investors, the clients of St. Louis money manager Wistar Holt. Mr. Holt became interested in gold and gold-mining stocks in 2001 as a means of protection against the falling market and has been proselytizing for gold ever since. Because of continuing doubts about the economy and the prospects for the broader market, he has kept clients mainly in gold stocks, which are easier to buy than the actual commodity. He also has them invest in bearish mutual funds that bet on market declines, which did badly during the recent stock boom but have done better in recent weeks.”

” ‘The price of gold has gone up because there is a lot of mistrust in the stock market, in all aspects of the stock market. It is hard for average investors, if there is such a thing, to know who to trust anymore,’ says Philip Salembier, a 55-year-old architect and former tech-stock investor who switched to gold about three years ago on the advice of Mr. Holt.”

“Some investment advisers are horrified at the thought of putting clients into gold stocks. While gold is moving gradually back onto some investors’ radar screens, it remains the controversial province of a hardy group of aficionados. In the past, the doubters point out, although gold has sometimes been viewed as a refuge for nervous investors and a hedge against inflation and dollar weakness, it has been anything but safe.”

“The gold market, in fact, in the late 1970s went through its own bubble, which popped noisily in 1980 after the metal traded briefly above $800 an ounce. The ensuing bear market in gold lasted, with ups and downs, almost 20 years, and gold fell as low as $254 in 1999. But the metal, and the stocks of the companies that mine it, took off again around the start of 2001. It was then, as investors realized that the tech boom was over and began looking for other options, that they rediscovered gold.”

“Even some fans of gold still see it as a temporary investment. ‘This is just a short-term way to get through the bear market. It isn’t like we are going to be here our whole lives,’ says Bob Boly, a civil engineer with the Metropolitan St. Louis Sewer District and a Holt client.”