Explain gold investing to me??

[LD1]

Because just like everything else they are in the BUSINESS of buying and selling. Or do you work for free?

No I dont work for free. But the places I am talking about charge more than just a little fee. I think they should put their money where their mouth is. Buy it from me at current market value. The profit (just like stocks), is when the prices go up. That is their justification for selling people into paying MORE than market value right??

 

[TnAndy]

And it always seems places want to sell for more than market value, and buy for less than market value. Makes no sense to me. If an ounce of gold is worth (lets say) $1500, why on earth would I want to spend $1600 for it, and if in a few weeks I need money, and gold is still stable at $1500/ounce, I would have to sell it for $1400????

The 'spread' is how dealers make their money. You can buy at 'spot'....the market price..open an account at the COMEX and be willing to buy a 400oz bars, (1,000 on silver) and they will fix you right up !

But if you want somebody to buy that bar, and break it out into 1oz, or 1/2oz, or 1/4oz or 1/10oz or smaller amounts, don't expect them to do it for free.

That said, if you're paying 100 over spot to buy and 100 under spot to sell, you're flat paying too much.

Again, I'll use APMEX merely as an example ( I have no affiliation with them ) since they post online, but they represent the case with most large dealers.

Spot today: 1256

Buy just one US gold eagle (1oz): 1320 (64 over spot)

Sell them back that same Eagle: 1286 (30 over spot)

The spread is 34 federal reserve notes on one coin.

US eagles always get a higher price....don't ask me why. US legal tender for one thing, I guess.

Want slightly cheaper ?

South African Krugerrands......most popular coin in the world. USAF fighter pilot survival kits in Vietnam has a few of these in them.....guess why......"get out of a sticky situation free card/coin".

Buy: 1306
Sell: 1269
Spread: 37 FRNs

Both contain one ounce of gold. (They are 22k..... added silver in the case of US eagle, and copper in the case of SA Krugs. Pure gold...24k... is too soft for coinage that, in theory, is meant to be circulated)

 

[TnAndy]

At the same time i played in gold i purchased 20 acres in Idaho for $2,000 per acre. That property in today's market is selling at aprox $15,000-20,000 / acre . I built a nice ranch on this property, and love it way more than any gold i might have purchased hehe

Hey, real estate is often a great investment.

I bought 3ac of land down the road from me in the late 90's for 10k. Split it into two lots, built a couple single family rentals on them. Rented for a couple years, decided real estate was crazy priced, so I sold both of them in 2006 ( don't even ask me about the taxes I paid that year....wow....). One sold for 176k, the other for 150k.

The 176k one recently sold ( couple divorced ) and it sold (7 years later, mind you) for 159k after 6 months on the market.

Real estate CAN go down too ! But I'm still a big fan of it too!

 

[jeff9366]

John, I have both money market and mutual funds through Vanguard IRAs. They have precious metals and mining based funds, but those don't seem to be performing well at this time.

BUY LOW, SELL HIGH.

 

[SPIKER]

For perspective myself and my boss did two different things, he invested in Guns, ammo and gold. He has all of his stuff from what I know (don't work there anymore.) I invested in stocks and high yielding ones for 50% of it and keep maybe 15% in speculative stocks. After 6 years in the markets I'm up 65% in one account and 66% in the other (Savings and IRA) while $ I had in the bank is flat as interest is 0 for pretty much every thing in cash. Some Bonds are one part I'm missing but spend some time watching to stock shows & investing info on-line. If I had invested the same in Gold in that time my returns would be about 45% without any fees, & I would been probably lots less if the price was to plummet (somewhat likely some time as price is real cyclical.) Cycles of boom bust happen all the time but being able to sell stocks takes a few seconds while trying to do the same with gold is difficult. Same with Silver my niece would not listen bought in silver at 28~30/oz because everyone was hyping it. Not sure how much she bought but hope she can get out I think it was around 19/once last time I looked. When these metals start dropping no one wants to buy them, brokers will undercut the price a lot when beta goes up or down...

I would seek professional advice prior to buying gold and I DON'T mean some pawn shop guy with a cabinet full of gold and silver...
Mark

 

[Gale Hawkins]

I agree the stock market is the more simple/liquid way to invest but as noted is not without major risks.

One can not eat any of these investments but I remember a Howard Ruff of Ruff Times news letter in the 80's advised like buying 90% silver dimes/quarters so they would be small enough to buy food and stuff if the lights went out on the banking and trading industry.

 

[Ridgewalker]

OP - I suggest checking out kitco's site. They have a good forum and chart
all PM's. https://www.kitcomm.com/

Here is my two cents, only invest money in PM's that you don't need for at least 10 years.
If you don't have enough to replace the furnace, etc. then you shouldn't invest unless it's on a small scale. i.e. pick up a ASE or 3 every payday.

 

[MossRoad]

My favorite investment saying is "pigs get fat and hogs get slaughtered"
Don't get greedy. Slow and steady wins the race. While some folks do get rich quick, most people that try it don't.

 

[jinman]

BUY LOW, SELL HIGH.

Yes, but don't make the mistake of buying low and selling lower. If picking the bottom was easy, there would be a bunch more rich people around.

When you have a $10k emergency fund, you have to keep your assets liquid. There is NO real estate that is liquid. Also, gold and silver cannot provide income. You have to sell it and hope for a profit. Stock market investments that include mutual funds, bonds, and money market are extremely liquid. Fees are extremely low with Vanguard investment services. You can do full research on their mutual funds, ETFs, bonds, and money market. Pick a fund with a good history of returns and buy with low or no fees. You'll get dividends and your investments will grow if you've chosen wisely. Buying, selling, or exchanging funds is extremely easy. $10k is a nice nest-egg to start with. Put all of it into a money market fund to begin with and then invest only what you feel comfortable putting into mutual funds or others. Checking your fund balances and managing your account is a simple login from anywhere 24/7/365.

You'll have more freedom than with any other type of savings or investments. There's something very satisfying to invest $10k and find a few months later that you have $11k or more. Sell a few shares and go celebrate with a nice dinner. It's that simple.

 

[grsthegreat]

Yes, but don't make the mistake of buying low and selling lower. If picking the bottom was easy, there would be a bunch more rich people around.

When you have a $10k emergency fund, you have to keep your assets liquid. There is NO real estate that is liquid. Also, gold and silver cannot provide income. You have to sell it and hope for a profit. Stock market investments that include mutual funds, bonds, and money market are extremely liquid. Fees are extremely low with Vanguard investment services. You can do full research on their mutual funds, ETFs, bonds, and money market. Pick a fund with a good history of returns and buy with low or no fees. You'll get dividends and your investments will grow if you've chosen wisely. Buying, selling, or exchanging funds is extremely easy. $10k is a nice nest-egg to start with. Put all of it into a money market fund to begin with and then invest only what you feel comfortable putting into mutual funds or others. Checking your fund balances and managing your account is a simple login from anywhere 24/7/365.

You'll have more freedom than with any other type of savings or investments. There's something very satisfying to invest $10k and find a few months later that you have $11k or more. Sell a few shares and go celebrate with a nice dinner. It's that simple.

i have 2 accounts with vanguard, and i agree they have returned great results with minimal funds. Also firm believer in Liquid Emergency funds. CD's are also a good place to keep some liquid funds, as most will only lose 3 months interest if you close them early while still giving 4x the interest of an interest earning bank account. Still the interest sucks, but its more than you get stuffing it in a safe at home.