DEFINITION of 'Fool's Gold'
Also known as iron pyrite, fool's gold is a gold-colored mineral that is often mistaken for real gold. Fool's gold is also a common term used to describe any item which has been believed to be valuable to the owner, only to end up being not so. Investments in hot stocks that seemed too good to be true, only to crash and burn, can be referred to as investing in fool's gold.
BREAKING DOWN 'Fool's Gold'
During historical periods of gold rushes, many less-than-knowledgeable miners would frequently believe that they hit the mother lode upon finding a cache of fool's gold. Unfortunately, unlike the real thing, fool's gold is relatively worthless.