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Investors can be forgiven for scratching their heads about the price of gold. Just when they think it can’t go any higher, there it goes, setting a new record.

For the past 10 years, gold has been surpassing expectations. It had dropped to $272 an ounce in 2000, and, at the time, few thought the price would rise dramatically. But over the past decade the price kept rising – breaking records – until it hit a high of $1,226 in December 2009. With each new record, many observers predicted that the price could not possibly go much higher and that the bubble would burst. As of this writing, the price has dropped to $1,092, with many analysts saying that the bubble has finally burst. But that has been said many times in the past decade, only to be followed by another rally.

Back in 2000, those who predicted higher gold prices were envisioning a worsening economy, which usually drives up the value of gold. It is the standard investment that many turn to for security in uncertain times.

Quite often the price performance is the inverse of the stock market’s, which does better in a stable environment. Some say now that the economy appears to be steadying, gold prices should stabilize or drop. In fact, many financial advisors caution against jumping into the precious metals market, fearing a plummet. Even some of those who previously encouraged precious metals investing are backing off these days.

“It was great to get in about three or four years ago, but now you have to be much more cautious,” Cary Carbonaro, a financial planner with Stonegate Wealth Management of Clermont, Fla., told the Orlando Sentinel. “It has had a huge run-up, but it is a cyclical thing.”

Even George Soros said, during the World Economic Forum in Davos earlier this year, “The ultimate asset bubble is gold,” but then, according to reports, doubled his own investment in gold a month later. That could be because he foresees an increase in inflation, which also drives up the value of gold.

Those who want to jump on the golden bandwagon are advised to be cautious in taking that leap. Even the most enthusiastic advisors still say investors should put only a small percentage into precious metals – 5 to 10 percent of their total investment money at most. Also, most advise their clients to invest in a fund rather than buy the metal itself, mostly for security reasons. After all, what’s the use of an insecure investment meant to bring security in an insecure time?

Death and taxes are inevitable but so are mistakes. Here are some of the most common mistakes on tax returns, according to the IRS and other sources:

• Rebates and credits: Supposedly the No.1 mistake in returns filed last year was the incorrect handling of the 2008 recovery rebate. More than 2 million returns did not include or incorrectly figured the rebate, according to published reports. Some tax experts are advising this year to include the “Making Work Pay” tax credit that was part of the 2009 stimulus package. The credit is worth $400 for individuals and $800 for couples.
• Capital gains: Short-term capital gains apply to assets owned for less than a year. After that they become long-term gains, which are preferable because they are generally taxed at a lower rate than your regular income (which includes short-term capital gains). A loss can also lower your taxable income, but it gets tricky. First you must net the gains and losses. The short-term loss is subtracted from the short-term gain and then the long-term loss is subtracted from the long-term gain and the results are netted against each other. If you still end up with a loss, up to $3,000 of it can be subtracted from your taxable income.
• Filing status: Many choose the incorrect filing status (there are five), which can affect the deduction. For example, someone might have become a widow or widower since filing the last return, and check another status out of habit. It might sound like a simple clerical issue, but filing status determines which tax rates and which standard deduction amounts apply.
• Math: It might sound basic, but math mistakes are among the leading reasons the IRS has to adjust a return. And who really wants to catch the attention of the IRS? Be safe and compute twice.
• Deductions: Many errors occur when trying to figure out the taxable income. Commonly overlooked items are earned income tax credit, standard deduction for age 65 or over or being blind, the taxable amount of Social Security benefits, and the child and dependent care credit.

Dumb stuff: These are the details that trip up many people. Be sure of Social Security numbers for anyone listed on the tax return. Also be sure of a dependent’s last name. Sounds odd, but the IRS says lots of people make this mistake. And, don’t forget to sign the return!

With the clamor about the health care reform law, one of its most significant provisions has not had much attention. The Community Living Assistance Services and Supports (CLASS) Act establishes a new, public long-term care (LTC) insurance program.

The bill will not assist with Americans’ long-term care needs immediately because it requires people to pay into the system for five years before receiving benefits. Much is still being hammered out in the implementation of the new program but many expect that the system will not be put into place until 2013. That means benefits would not be paid out until 2018.

It is a voluntary program in which participants can have the monthly premium deducted from their paychecks. The premiums, which would be determined annually by the U.S. Health and Human Services Secretary, have been estimated to be anywhere from $65 to $240 a month. Participants would be able to receive from $50 to $75 a day to meet LTC needs such as bathing, dressing, getting in and out of bed and using a toilet (for those who become disabled). Recipients would be able to use the money for care in the home or at a facility.

Although some in the insurance industry have praised the legislation for bringing attention to the issue of long-term care, they also say the program could be counterproductive. That’s because the benefit is less than daily care costs now, which are hundreds of dollars. People might not buy private LTC insurance because they believe they will be covered by the government program – only to find the payout is inadequate when they need it most.

Proponents of the plan say the payment is not meant to cover all of a person’s LTC needs, but will help relieve the burden. For example, it would allow people to hire help for part of a day, allowing a disabled person to remain at home.

The legal and tax information contained in these articles is merely a summary of our understanding and interpretation of some current provisions of tax law and is not exhaustive. Consult your legal or tax advisor for advice concerning your particular circumstances.