Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Fool's Gold

What it is:

Fool's gold is a shiny mineral called pyrite which bears great resemblance to, and is often confused with, real gold.

How it works (Example):

Actually an iron-based mineral, pyrite is known for being yellow and shiny and appearing no different from real gold. But unlike real gold, fool's gold bears little, if any, intrinsic, social, or market value. Fool's gold has historically been found in mass quantities and mistaken for gold ore. Its name refers to those it "fools" into believing they have discovered a gold mine. 

Why it Matters:

Though it's no longer a term specific to mining, the term fool's gold is still often used to describe an investment that appears promising to the uninformed, but whose underlying value is actually nothing.