Thoughts on investing in gold/silver

[carpenter383]

I,ve been thinking of investing in some type of precious metal(s)
Anyone have any experience on the subject?
I've heard silver would be one of the best investments currently, and with the shape of the economy and the american dollar I'm very interested in trading some spiraling american currency for something that will always have value. The probelm is I have no experience and don't really trust the tv commercials or a coin dealers' advice I'm looking for real word unbiased oppinions please:thumbsup:

 

[bp fick]

The returns on gold or silver bullion has been decent, as of late, and have exceeded most investments in the last 4 years.

That said, it has not kept up with inflation. That is, while gold has tripled in the last few years, it's true buying power of the dollar value, is not truly any higher than the dollar value of gold, say 20 years ago.

Still, it is World War Three type money, imho. In other words, it cannot be value less. Both gold and silver have had value since the beginning of time.
It fluctuates in spot price. Most reasonable people have 10% of the savings in gold/silver bullion, typically bars, round, or coins.

Drop me a PM for web sites that I trust. Easy to purchase. $2 an ounce over spot, on silver. Delivered to your door.

You are right not to believe much of the hype of TV commercials, be they for super duper new scratch remover, super absorbent towels, or gold/silver.

 

[Chuck52]

WWIII and end of time investments. I don't know, but I figure if the end of civilization comes i'll keep my canned goods and you can keep your gold!

On a serious note, I always wonder just what the value of gold is. What can you do with it? Aside from jewelry, which would seem to be of dubious value after the End of Time, it is good for electronics and such, and in some chemical processes, and a few pharmaceuticals.

Pay no mind....just wondering.

Chuck

 

[smstonypoint]

I,ve been thinking of investing in some type of precious metal(s)
Anyone have any experience on the subject?
I've heard silver would be one of the best investments currently, and with the shape of the economy and the american dollar I'm very interested in trading some spiraling american currency for something that will always have value. The probelm is I have no experience and don't really trust the tv commercials or a coin dealers' advice I'm looking for real word unbiased oppinions please:thumbsup:

If I wanted to invest in precious metals (which I don't), I would do so by buying precious metal ETFs (electronically traded funds). They are relatively low cost and you don't have to worry about the cost of storage, insurance, etc. as you would with the physical commodities.

Steve

 

[300UGUY]

If I wanted to invest in precious metals (which I don't), I would do so by buying precious metal ETFs (electronically traded funds). They are relatively low cost and you don't have to worry about the cost of storage, insurance, etc. as you would with the physical commodities.

Steve

That would be my thinking.

 

[JoyJack]

If I wanted to invest in precious metals (which I don't), I would do so by buying precious metal ETFs (electronically traded funds). They are relatively low cost and you don't have to worry about the cost of storage, insurance, etc. as you would with the physical commodities.

Steve

There is no cost for storage, insurance, etc. if you own bullion.
If you can't hold it, you don't own it.:thumbsup:

 

[smstonypoint]

There is no cost for storage, insurance, etc. if you own bullion.
If you can't hold it, you don't own it.:thumbsup:

I disagree. If you buy a typical precious metal ETF, you are buying shares in a "basket" of the actual bullion that is held in a bank. Admittedly, you can't see or touch the bullion you own, but you still own it.

Because the funds' managers are dealing with large quantities, they have lower per unit costs in buying, selling, storing, etc. the bullion than would an individual. You pay for the managers' services and brokerage commissions, but these fees will be lower than the costs you would incur in buying and holding the bullion/coins yourself.

If you get kicks from seeing and holding the bullion/coins, go for it. But it's going to cost you.

Steve

 

[bp fick]

Gold has been used as a monetary basis (in this country, until just recently) since the beginning of time. Gold's practical uses are many, but primarily its value is established simply because it is rare and difficult to mine.

Silver has more industrial uses in electronics, but it also remains a unit of exchange, an unofficial monetary unit.

Invest in gold? That is the realm of the speculator. Holding some gold or silver coins? That is slightly different. Paper bills and such are only worth the faith one has in the issuer.

Throughout human history, when a crown or sovereign currency failed, gold/silver/diamonds have been used a method of condensed, portable wealth. I would say again, having a percentage of one's worth in such an asset is harmless and likely quite wise.

BTW, yes, I also have lots of canned/frozen goods from the garden this summer. Not sure about any armageddon scenario and don't spend a lot of time dwelling on it. Common sense should dictate, neither irrational fears or irrational complacency.

 

[Egon]

The chances are very good one could find some Breaex Shares at very reasonable prices.

 

[brin]

WWIII and end of time investments. I don't know, but I figure if the end of civilization comes i'll keep my canned goods and you can keep your gold!

On a serious note, I always wonder just what the value of gold is. What can you do with it? Aside from jewelry, which would seem to be of dubious value after the End of Time, it is good for electronics and such, and in some chemical processes, and a few pharmaceuticals.

Pay no mind....just wondering.

Chuck

Chuck, I agree with you, if push comes to shove and society actually breaks down, it seems to food, water, power ( a generator and fuel ) seeds and land will be much more valuable and in demand than gold or silver. If one is going to keep gold and silver then I would keep it in coin form and in my own possession. As far as society breaking down...Never say Never but at the same time you can't become obsessed with the idea. Nothing wrong with preparations for a worse case scenario.

Gold has been used as a monetary basis (in this country, until just recently) since the beginning of time. Gold's practical uses are many, but primarily its value is established simply because it is rare and difficult to mine.

Silver has more industrial uses in electronics, but it also remains a unit of exchange, an unofficial monetary unit.

Invest in gold? That is the realm of the speculator. Holding some gold or silver coins? That is slightly different. Paper bills and such are only worth the faith one has in the issuer.

Throughout human history, when a crown or sovereign currency failed, gold/silver/diamonds have been used a method of condensed, portable wealth. I would say again, having a percentage of one's worth in such an asset is harmless and likely quite wise.

BTW, yes, I also have lots of canned/frozen goods from the garden this summer. Not sure about any armageddon scenario and don't spend a lot of time dwelling on it. Common sense should dictate, neither irrational fears or irrational complacency.

bp fick - I agree, good point...neither irrational fears or irrational complacency should be the common sense approach.. Like in the Boy Scouts...Be prepared !

 

[smstonypoint]

The chances are very good one could find some Breaex Shares at very reasonable prices.

I'm sorry. I don't get it.

Steve

 

[MossRoad]

If you would have bought an ounce of gold in 1975 for $140.00 an ounce and held it for 35 years you could have sold it at around $1000 dollars recently.

Looking at some inflation calculators... $140.00 in 1975 would be worth about $580.00 today. So your gold would have more buying power today than it did in 1975 by a power of about 1.7.

If you would have invested that $140.00 in the stock market and averaged a conservative 8% return for 35 years you would have had over $2000.00.

Running the same inflation calculators backwards, $2000.00 today would have been worth about $480 in 1975. Your buying power would have been 3.4, or twice as much, which pretty much confirms the calculation that the stock market outperformed gold 2:1 over the last 35 years.

( Why did I pick 1975? Because I was 14 years old and my best friend came over all excited that his father bought him an ounce of gold and he wanted to show it to me. That's the first time I ever saw an once of gold. )

The problem is knowing how long to hold something, when to get in and when to get out. Most people do not follow dollar cost averaging when investing and many folks try to time the market. They get in too late and get out too early. They miss out on the "slow and steady wins the race" wisdom of the tortoise VS the hare.

 

[smstonypoint]

<snip>

The problem is knowing how long to hold something, when to get in and when to get out. Most people do not follow dollar cost averaging when investing and many folks try to time the market. They get in too late and get out too early. They miss out on the "slow and steady wins the race" wisdom of the tortoise VS the hare.

Amen!!!

Steve

 

[jinman]

I tend to like mutual fund investments such as Vanguard Precious Metals and Mining Fund (VGPMX). Here is the performance graph for the last five years. If you bought in May 2008, you'd hate this fund. If you bought in May 2009 like I did, you'd love it.

 

[jinman]

If you would have bought an ounce of gold in 1975 for $140.00 an ounce and held it for 35 years you could have sold it at around $1000 dollars recently.

Moss, if you'd bought 1000 shares of Microsoft in 1982, you'd be sittin' pretty today too. Gold is not the only "golden" investment.:thumbsup:

 

[bp fick]

Moss, no argument from me with your basic point, and it's well taken. Timing is awfully difficult to do. But just in fairness, you assumed an 8% return from the stock market during those 3 1/2 decades, in your comparison. Fair enough. But what if the comparison model is different?


Gold Return vs. The Stock Market- The past decade.
Which investment would have netted a better return?


Had you invested $10,000 in gold bullion in 1999, your initial investment would have grown to $38,300 by 12/31/09 a 283% percent increase.

That same $10,000 investment in stocks of the S & P index would have lost $1,400. That is a 14% loss.


Yup, timing is indeed everything. Your "slow and steady" was good advice. Sometimes that isn't precious metals and sometimes it isn't the stock market.

 

[smstonypoint]

<snip>
Yup, timing is indeed everything. Your "slow and steady" was good advice. Sometimes that isn't precious metals and sometimes it isn't the stock market.

That's why professional financial managers recommend a diversified investment portfolio.

Steve

 

[MossRoad]

Moss, if you'd bought 1000 shares of Microsoft in 1982, you'd be sittin' pretty today too. Gold is not the only "golden" investment.:thumbsup:

OOoooo!!! Don't get me started with that one. We had a whacky, goggle glasses chain smoking electronics professor that year that tried to talk the whole class into investing in a little company called Intel and another called Microsoft. AAAAAAAAAaaaaaaarrrrgggghhhhh!!!!!!!

Good old hindsight! :laughing:

 

[niemeyjt]

Didn't FDR confiscate gold on your side of the pond in 1933?

Maybe physical gold under the floorboards is less confiscatable?

Also, I think some of these funds do not actually own all they claim to:

The gold investment fund that doesn't invest in gold - Telegraph

Another reason for holding the physical stuff perhaps?

J

 

[bp fick]

Didn't FDR confiscate gold on your side of the pond in 1933?

Maybe physical gold under the floorboards is less confiscatable?

Also, I think some of these funds do not actually own all they claim to:

The gold investment fund that doesn't invest in gold - Telegraph

Another reason for holding the physical stuff perhaps?

J

From Wiki:
Abrogation and subsequent events


The limitation on gold ownership in the U.S. was repealed after President Gerald Ford signed a bill legalizing private ownership of gold coins, bars and certificates by an act of Congress codified in Pub.L. 93-373 [2] [3] which went into effect December 31, 1974.