topic Re: Anyone buying physical gold and silver? in Personal Finance

Anyone buying physical gold and silver?

Anonymous — Sun, 25 May 2014 02:48:02 GMT

Ive put about $1000 toward it and overall its nice having something you can actually hold compared to watching figures on a screen. Im still 40+ years away from retirement but it seems like a crazy market some say over $1000 an ounce while others say it will drop back to $5.

Re: Anyone buying physical gold and silver?

Roarmeister — Sun, 25 May 2014 18:13:28 GMT

Oh yeah, you bet. And now is the best time to buy. The manipulators are finally being prosecuted in both the markets.

Although the one guy from Barclay's is simply the fall guy. You can bet the really demons in the 5 major banks setting the price of gold are going to rename unnamed and protected. And secondly with the manipulation in the silver market also coming to an end (only 3 banks left in the overnight price setting and they too will bow out before the summers over.) JP Morgan Chase found a way to save themselves by buying a huge amount of physical silver on the sly -- to protect themselves from all the short contracts they held. Very quickly the manipulation is ending.

The Chinese and Indians are protecting themselves by buying oz. upon oz. of the real thing -- they know that there will be another financial crisis and that gold is the only real money because it retains its value and has for 2500+ years.

I just finished buying another tube of silver so I need to offset by buying more gold.

The great thing about the PMs is that the mining companies have cleaned up their operations and cut back on their input costs. The price of the PMs can't drop much lower, otherwise they miners would totally quit operations. That combined with the reality of peak gold and silver means that these metals will ONLY rise vs. the fiat currencies. FWIW, silver is likely going to the first metal to be economically mined out of existence even before oil despite the fact the every day more and more uses for the metal are coming to the front. Silver is unique in that besides oil it is more uses in this world than any other element and when it is mined out, it will become much more expensive due the law of supply and demand.

You may be young and just starting out on your stacking but in 40 years when you retire you will be far richer than any of your contemporaries.

Re: Anyone buying physical gold and silver?

wa3more — Mon, 26 May 2014 02:33:42 GMT

Gold historically has been a poor investment. Look at it's return compared to other asset classes during intervals over the last 200 years.

Gold has a place in an investment portfolio but most would recommend an allocation of about 10% or so of assets.

I would rather see young people like yourself put most of their money in equities, say an S&P index fund. With stocks, you own part of a business. I think bonds will do poorly over the next 5 or 10 years as rates rise to their historical average.

When i was in college in 1980, gold peaked at $850. Today it is about $1,300. An annual return of 1.2%, did not even keep up with inflation.

Re: Anyone buying physical gold and silver?

mongstradamus — Mon, 26 May 2014 02:48:20 GMT

@wa3more wrote:
Gold historically has been a poor investment. Look at it's return compared to other asset classes during intervals over the last 200 years.

Gold has a place in an investment portfolio but most would recommend an allocation of about 10% or so of assets.

I would rather see young people like yourself put most of their money in equities, say an S&P index fund. With stocks, you own part of a business. I think bonds will do poorly over the next 5 or 10 years as rates rise to their historical average.

When i was in college in 1980, gold peaked at $850. Today it is about $1,300. An annual return of 1.2%, did not even keep up with inflation.

I am not as knowledgeable when it comes to buying gold and silver. For me majority of my retirement funds are in an total stock fund and total international stock fund. For me i feel comfortable with those index funds they are safe and show enough gains.

Re: Anyone buying physical gold and silver?

Anonymous — Mon, 26 May 2014 03:06:20 GMT

Used to have a decent collection of coins including silver. They got stolen by a roommate because I was stupid about storing them. Now I've started picking up some "junk" silver. I'll stay away from gold because it's just not as good of an investment. I'm frequenting APMEX and will drop a couple hundred there when I get my tuition reimbursement from my job. Trying to build back to a grand or so. Won't go much more than that until I'm maxing out my Stock Purchase Plan (15% at 15% discount from lowest price of the quarter, fully vested on day1 from purchase) and my 401K (100% match & fully vested up to 4% of each check. I'm currently puting away 15% per check).

Re: Anyone buying physical gold and silver?

Roarmeister — Tue, 27 May 2014 03:50:21 GMT

@wa3more wrote:
Gold historically has been a poor investment. Look at it's return compared to other asset classes during intervals over the last 200 years.

Gold has a place in an investment portfolio but most would recommend an allocation of about 10% or so of assets.

I would rather see young people like yourself put most of their money in equities, say an S&P index fund. With stocks, you own part of a business. I think bonds will do poorly over the next 5 or 10 years as rates rise to their historical average.

When i was in college in 1980, gold peaked at $850. Today it is about $1,300. An annual return of 1.2%, did not even keep up with inflation.

I would disagree vehemetly with that suggestion. Gold is the only money that historically has retained its value over 2500 years. All fiat currencies by comparison have flamed out and so will current currencies sooner rather than later. As proof, gold is in the neighbourhood of $1300/oz which means roughly 150 oz can purchase a basic house. Take that gold and bury it in the ground. In 20 years, that same gold will still buy you a house if not more. Now take $200k in fiat currency, bury it in the ground. Due to inflation, your $ in 20 years will be lucky to buy just the porch!

Every one should have min. 10% of their portfolio in precious metals as a stabilizer and store of wealth. You quoted 1980 and today. I could turn the table and cherry pick quote you 1971 and 2012 and show you a much different picture ($35 to $1900) - that just shows you that stats are just dumb lies manipulated to prove a point. Take these stats over your lifetime and see what you get. BTW, that $850 in fiat currency in 1980 -- what can you buy today for the equivalent in $? Back in 1980, you could have bought a really fine living room suite - today you can buy only the corner chair of that suite! Or compare loaves of bread - in 1980 you could have bought roughly 3400 loaves of bread. Today your $ will buy you 400 loaves. That's what inflation and fiat currency buys you.

Also factor in peak gold and peak silver. These two metals are getting scarcer to mine economically. In fact silver is mined as an adjunct to the other base metals like zinc, lead and copper that are found together. Right now there is a slow down in mining the base metals which means silver mining could eventually come to a halt. There are very few silver only mines in the world. Silver is also predicted to be the first mineral/metal to be mined out. In 20 years, there might not be much silver left to find! Once that happens the law of supply and demand will take over silver will be skyrocket past gold in value. People talk about peak oil which we may be very close to realizing -- we are actually past the peak silver curve. Peak gold is not that far behind- in fact both minerals/metals will be mined out even before oil will be!

Re: Anyone buying physical gold and silver?

Roarmeister — Tue, 27 May 2014 01:59:52 GMT

@Anonymous wrote:
Used to have a decent collection of coins including silver. They got stolen by a roommate because I was stupid about storing them. Now I've started picking up some "junk" silver. I'll stay away from gold because it's just not as good of an investment. I'm frequenting APMEX and will drop a couple hundred there when I get my tuition reimbursement from my job. Trying to build back to a grand or so. Won't go much more than that until I'm maxing out my Stock Purchase Plan (15% at 15% discount from lowest price of the quarter, fully vested on day1 from purchase) and my 401K (100% match & fully vested up to 4% of each check. I'm currently puting away 15% per check).

That is still a good start. At least you are stacking something. Everyone should buy what they can afford.

Re: Anyone buying physical gold and silver?

Roarmeister — Tue, 27 May 2014 02:13:14 GMT

@Anonymous wrote:
Ive put about $1000 toward it and overall its nice having something you can actually hold compared to watching figures on a screen. Im still 40+ years away from retirement but it seems like a crazy market some say over $1000 an ounce while others say it will drop back to $5.

Just another note: it is extremely unlikely for silver to drop to $5 except for a very very brief point in time. Silver right now is actually priced BELOW the cost of production and gold is only a $200-300 above its cost of production. There isn't much room for a dramatic price drop in either and certainly not a sustained drop. We are for all intents and purposes either at or very close to the bottom and it can only go up from here.

Re: Anyone buying physical gold and silver?

Anonymous — Tue, 27 May 2014 02:23:11 GMT

My biggest draw to silver is the afordability and the functionality as a manufacturing material which will only grow as technology further develops. This is the time to buy, IMHO.

Re: Anyone buying physical gold and silver?

wa3more — Wed, 28 May 2014 01:44:11 GMT

Roar,

I would have to respectfully disagree. Equities and real estate beat gold hands down.

Let's go back further than 1980. $1 invested in gold in 1800 would be worth $73 today . The same dollar in equities would be worth about $5 million.

With gold, you are speculating because you are unsure of your return on capital as well as your return of capital. What drives gold's value ? Possible inflation or buying by the indians and chinese ?

I have never met anyone who got rich investing in gold. I know people who have lost their shirt though.

Warren Buffett hates gold. When people like him and other succesful investors start recommending gold, i'll listen.

Any one who thinks they will make decent money in gold over the long run as their main investment theme, better have a Plan B.

Re: Anyone buying physical gold and silver?

Anonymous — Wed, 28 May 2014 02:06:21 GMT

@wa3more wrote:
Roar,

I would have to respectfully disagree. Equities and real estate beat gold hands down.

Let's go back further than 1980. $1 invested in gold in 1800 would be worth $73 today . The same dollar in equities would be worth about $5 million.

With gold, you are speculating because you are unsure of your return on capital as well as your return of capital. What drives gold's value ? Possible inflation or buying by the indians and chinese ?

I have never met anyone who got rich investing in gold. I know people who have lost their shirt though.

Warren Buffett hates gold. When people like him and other succesful investors start recommending gold, i'll listen.

Any one who thinks they will make decent money in gold over the long run as their main investment theme, better have a Plan B.

I don't know that the point is to "get rich" investing in metals. That's certainly not my intention. It's a safety for if other, more generally lucritive methods fall. Yes, there are certainly other ways of gaining money, but in the event of another Great Depression, my equities and real estate are of very limited value. Sure, they might come back, but at that moment, when I need to put food on the table, I need the money now, not after it recovers. It's sort of like buying insurance, only there's much less chance of loosing all your investment.

Re: Anyone buying physical gold and silver?

wa3more — Wed, 28 May 2014 13:05:58 GMT

I didn't mean getting rich with gold but more about putting your money where it will get the best return over the long run.

I would rather use cash than gold as insurance.

If we have another Great Depression, we will have problems that a few onces of gold won't help

Re: Anyone buying physical gold and silver?

Anonymous — Wed, 28 May 2014 16:35:55 GMT

@wa3more wrote:
I didn't mean getting rich with gold but more about putting your money where it will get the best return over the long run.

I would rather use cash than gold as insurance.

If we have another Great Depression, we will have problems that a few onces of gold won't help

I think those who went through the GD would disagree with you. A few ounces of gold would have made a significant difference for them. And the point, again, is that it's a safety net.

I agree with you about getting the best return over the long run. I'm quite an agressive investor right now, trying to make up for lost years of repairing from my first marriage. I would never put more than 10% or less into metals. But I do think that metals are a wise addition. Same as other forms of diversification.

Re: Anyone buying physical gold and silver?

wa3more — Wed, 28 May 2014 17:06:19 GMT

My dad grew up during the great depression and my grandfather was in germany during the hyperinflation.

A lot of what i learned i learned from them and their experiences. Mostly save and avoid debt. My grandfather just hated any kind of debt because of what he went through.

America right now is a blend of Argentina and Weimar Germany in a way with the huge debt that will never be paid off.

Re: Anyone buying physical gold and silver?

wa3more — Wed, 28 May 2014 17:24:16 GMT

gold prices and the depression .

In 1925 gold was about 20 an ounce and in 1933 was at 26. In 1934, FDR took gold out of the public's hands and set gold at $35 an ounce. In 1970, gold was $36 an ounce.

Going back to 1830 or so , gold was about 18 bucks , so in 100 years it hardly moved.

I'm not sure of gold in a portfolio and it's value as insurance in case an event such as a great depression happens. But different strokes for different folks.

Re: Anyone buying physical gold and silver?

mongstradamus — Wed, 28 May 2014 19:26:06 GMT

@wa3more wrote:
gold prices and the depression .

In 1925 gold was about 20 an ounce and in 1933 was at 26. In 1934, FDR took gold out of the public's hands and set gold at $35 an ounce. In 1970, gold was $36 an ounce.

Going back to 1830 or so , gold was about 18 bucks , so in 100 years it hardly moved.

I'm not sure of gold in a portfolio and it's value as insurance in case an event such as a great depression happens. But different strokes for different folks.

for me personally i find total bond, total us stock , and total international stock fund is enough diversification for me. I feel thats good enough for me, I know its not for everybody.

Re: Anyone buying physical gold and silver?

Anonymous — Wed, 28 May 2014 22:12:32 GMT

Wa3more, that's why I invest in junk silver, not gold. It's money. They can't take that without compensation.

Re: Anyone buying physical gold and silver?

Roarmeister — Thu, 29 May 2014 02:20:24 GMT

@Anonymous wrote:
@wa3more wrote:
I didn't mean getting rich with gold but more about putting your money where it will get the best return over the long run.

I would rather use cash than gold as insurance.

If we have another Great Depression, we will have problems that a few onces of gold won't help
I think those who went through the GD would disagree with you. A few ounces of gold would have made a significant difference for them. And the point, again, is that it's a safety net.

I agree with you about getting the best return over the long run. I'm quite an agressive investor right now, trying to make up for lost years of repairing from my first marriage. I would never put more than 10% or less into metals. But I do think that metals are a wise addition. Same as other forms of diversification.

I think Henry Ford Sr. would agree. HF junior was a big player in the stock market and thought he knew everything the old man didn't. Then came October 1929 and he lost his shirt and then some. The old man stepped in with his gold certificates and bailed him out. Often precious metals will operate opposite of stocks and is a definite safeguard that can protect themselves from a crash. The rule of thumb used to be that you should diversify by having 10% in precious metals. Nowadays, the young traders have been spoiled (esp.pre 2008) because stocks have had a good run. Stocks were everything to them and people have forgotten to diversify into PMs. Young traders these days think it is a fool's play but they don't understand history, don't understand cycles, don't understand the impact of the price of oil, don't understand how the economy works and they didn't and won't see the next crash happening.

These days my acid test for an advisor is what % should be in PMs. If they say anything between 5 and 25%, they are good in my books. If they say 0%, I toss the jacka$$ fool out on his keister. If they pass the first question, then we can actually have an intelligent conversation on everything else. I am actually at 10% right now and I want to get to 25% by retirement.

Re: Anyone buying physical gold and silver?

Roarmeister — Thu, 29 May 2014 02:28:54 GMT

@wa3more wrote:
gold prices and the depression .

In 1925 gold was about 20 an ounce and in 1933 was at 26. In 1934, FDR took gold out of the public's hands and set gold at $35 an ounce. In 1970, gold was $36 an ounce.

Going back to 1830 or so , gold was about 18 bucks , so in 100 years it hardly moved.

I'm not sure of gold in a portfolio and it's value as insurance in case an event such as a great depression happens. But different strokes for different folks.

Back then gold was the standard that everything else was based on. The value of gold did not float vs. the US dollar as you would seem to imply.

The amount of gold controled the amount of money supply available. Remember at that time the world's currencies did not float. The value of the dollar and other currencies were directly tied to gold. People called what Roosevelt did a confiscation but that's a lie based on lack of understanding. Back in Roosevelt's time they needed money to pay for the depression and bring the country out of its funk. The only way to increase the money supply was to have the populace turn in their gold and he redeemed their gold for the going price. Then Roosevelt played the 2nd card, this was evil part - he immediately revalued the dollar to gold from $20.67 to $35 /oz. Bang - the US increased its money supply by 69%.and devalued the US dollar at the same time.

Today the dollar is off the gold standard. It is free floating and the rest of the world's fiat currencies are all valued in US dollars. The power of the US dollar controls the price of oil. The world's economy runs on oil and the cost of oil is the key regulator of production of goods. The only way the US can change the money supply is by physically printing more currency or by creating more money electronically with the Feds buying US Treasuries. The giant ponzi scheme that is the US economy is now dependent on the Fed doing this because nobody else buys Treasuries in large amounts any more, including the Chinese. Instead the Chinese are producing and buying gold at record amounts. They are the largest miner of gold on earth and as of last year are now the biggest buyer of physical gold. Europe and the US are busy selling or leasing their gold and the Chinese are the net buyers of the stuff. Sales of physical precious metals are at an all time high by those with the understanding and foresight of the future.

Ignore the paper market for investing, the ETFs of GLD and SLV have next to no physical product backing their funds. The ETF market is however much larger than the physical market, you can make quick money on them if you know what you are doing but don't put too much into them. In the event of an economic collapse the ETF won't be worth the bytes it takes to store on a hard drive.

The rest of the world is afraid, big time afraid, that the next collapse is coming and that it will be worse than the previous one. Their exposure to the US dollar and the fact that oil is transacted for in US dollars means they have less control over their economies. The Middle East countries are trying different things like selling oil for gold. China and Russia who aren't exactly friends just signed a $400B deal for natural gas. Countries are exploring ways of transacting oil and energy without involving the US dollar. Slowly but surely they will succeed. Current attempts are just tiny chips in the iceberg but more and more chips and the iceberg will roll over. And when that day comes, they will begin to ignore the and dump US treasuries. The US may very well become a 3rd world country within your lifetime when that happens.

Please, protect yourself and buy PMs. 25% is my target. But don't put all your chips in one pot, you still need to invest in stocks (preferable dividend paying) and bonds as well.

Re: Anyone buying physical gold and silver?

wa3more — Thu, 29 May 2014 02:35:39 GMT

yeah, I like the 10% number too. If gold got down to 1k , then i'd be interested in buying - when more people are negative

We had a lost decade too in stocks having gone nowhere for 10+years. We had a couple of stock bubbles and a real estate bubble all within 10 years.

At some point rates and inflation will pick up. The fed with all this cheap money, not surprised it hasn't materialized. I just closed out a short position on bonds and lost some money. Got tired of waiting. 5% of my money as a speculative bet.

Oil,stocks,PM , seems like the markets are being manipulated by big money. Jim Rogers has been saying that commodities/PM will a good place for years and will trend higher. It hasn't really happened yet, but who knows ?