Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 10-28-2015, 02:12 PM   #21
gone traveling
 
Join Date: Sep 2013
Posts: 1,248
Quote:
Originally Posted by Fermion View Post
So explain how buying gold at $350 an ounce was a bad investment when it represents a 300% gain to today's price of gold? Even if you have held the gold for 20 years that outperforms an EE bond by far.

Also, the world did not end and hyperinflation did not happen so the gold did its job.

I think the car insurance I have bought over the past 20 years was a bad investment too.
Because while gold went from 200 to 1200 from 1974 till today S&P 500 went from 100 to 2000 plus it payed ton of dividends.

I wonder if Gold even kept up with inflation .... but it probably did beat "Car insurance".....
__________________

__________________
eta2020 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-28-2015, 02:22 PM   #22
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,904
Quote:
Originally Posted by eta2020 View Post
Because while gold went from 200 to 1200 from 1974 till today S&P 500 went from 100 to 2000 plus it payed ton of dividends.

I wonder if Gold even kept up with inflation .... but it probably did beat "Car insurance".....
Why are you using 1974 until today? Why not year 2000 until today? Was 1974 the only time a person could buy gold?
__________________

__________________
Fermion is offline   Reply With Quote
Old 10-28-2015, 02:28 PM   #23
gone traveling
 
Join Date: Sep 2013
Posts: 1,248
Quote:
Originally Posted by Fermion View Post
Why are you using 1974 until today? Why not year 2000 until today? Was 1974 the only time a person could buy gold?
I look at long trends not speculative hype of few years.

But I will give you nice speculative range Gold around 1980 800 bucks in 2003 it was 400. Total return loss of 50% in 23 years.
And how many dividends did gold holders collect during that time?

US equities never ever had 23 years of being at loss AFTER inflation.
__________________
eta2020 is offline   Reply With Quote
Old 10-28-2015, 02:41 PM   #24
Full time employment: Posting here.
CaliforniaMan's Avatar
 
Join Date: Dec 2013
Location: San Diego
Posts: 846
Quote:
Originally Posted by StuckinCT View Post
I used to move 10s of millions of gold per day. I could not think of a worse environment for gold, low inflation dollar strength. Historically it follows long cycles that roughly tracks inflation, but right now it is mis priced.
Curious why you think gold is mispriced. I think it is too high now too, but have nothing to back it up, and my prognostications are usually wrong.

As you are someone previously in the business I am very curious about your reasoning about its price if you wish to share it.
__________________
Merrily, merrily, merrily, merrily,
Life is but a dream.
CaliforniaMan is online now   Reply With Quote
Old 10-28-2015, 02:53 PM   #25
gone traveling
 
Join Date: Sep 2013
Posts: 1,248
http://inflationdata.com/inflation/i..._inflation.jpg

If this chart of Inflation adjusted gold prices are correct. Gold has negative return between 1980 and today.

Gold peaked at 2458 dollars (in 2014 dollars) per ounce in 1980.
__________________
eta2020 is offline   Reply With Quote
Old 10-28-2015, 02:54 PM   #26
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,904
Quote:
Originally Posted by eta2020 View Post
I look at long trends not speculative hype of few years.

But I will give you nice speculative range Gold around 1980 800 bucks in 2003 it was 400. Total return loss of 50% in 23 years.
And how many dividends did gold holders collect during that time?

US equities never ever had 23 years of being at loss AFTER inflation.
And an I-bond today is paying 0%. In 20 years an EE bond is only going to be worth double. A 5 year CD today doesn't even keep up with average inflation.

Why are you comparing gold to stocks? How much is Kodak stock worth today if you held it since 1980?
__________________
Fermion is offline   Reply With Quote
Old 10-28-2015, 03:00 PM   #27
gone traveling
 
Join Date: Sep 2013
Posts: 1,248
Quote:
Originally Posted by Fermion View Post
And an I-bond today is paying 0%. In 20 years an EE bond is only going to be worth double. A 5 year CD today doesn't even keep up with average inflation.

Why are you comparing gold to stocks? How much is Kodak stock worth today if you held it since 1980?
Because investment to me is something long term and personally I hold equity index funds for this purpose. The S&P 500 index is not Kodak stock.

CDs are not investments.

Gold is speculative short term investment since on a long term it performs poorly . I am just saying for a long term investment (retirement) forget about gold. If you made money because you lucked out with timing gold good for you.....
__________________
eta2020 is offline   Reply With Quote
Old 10-28-2015, 03:54 PM   #28
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,904
Quote:
Originally Posted by eta2020 View Post
Because investment to me is something long term and personally I hold equity index funds for this purpose. The S&P 500 index is not Kodak stock.

CDs are not investments.

Gold is speculative short term investment since on a long term it performs poorly . I am just saying for a long term investment (retirement) forget about gold. If you made money because you lucked out with timing gold good for you.....
I don't own any gold except for two one ounce Canadian maples and a wedding band. If I did own gold, I would view it more as insurance than a growth investment. This is similar to I-bonds IMO (which quite a few people on ER.org do own). I-bonds are going to perform horribly long term compared to the S&P500, just like gold will. Funny that there are not many rant threads on the stupidity of owning I-bonds.
__________________
Fermion is offline   Reply With Quote
Old 10-28-2015, 05:49 PM   #29
gone traveling
 
Join Date: Sep 2013
Posts: 1,248
Quote:
Originally Posted by Fermion View Post
I don't own any gold except for two one ounce Canadian maples and a wedding band. If I did own gold, I would view it more as insurance than a growth investment. This is similar to I-bonds IMO (which quite a few people on ER.org do own). I-bonds are going to perform horribly long term compared to the S&P500, just like gold will. Funny that there are not many rant threads on the stupidity of owning I-bonds.
I think I-Bonds are almost like cash or CDs. One needs certain amount of cash.

On the other side gold carries risks of rapid decline or reward of rapid rise. Everybody needs some amount cash, but same needs do not apply to gold.
__________________
eta2020 is offline   Reply With Quote
Old 10-28-2015, 05:59 PM   #30
Thinks s/he gets paid by the post
 
Join Date: Feb 2014
Posts: 1,049
Physical gold can get you from one regime collapse to the next regime with your stash in tact. However, if this happens the world would be in chaos and it will take more years than I have left to live for a new regime to emerge. So I think investment in a bunker with food would be wiser, if that is what is your concerned about.
__________________
jim584672 is offline   Reply With Quote
Old 10-29-2015, 04:36 PM   #31
Moderator
Walt34's Avatar
 
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 16,507
Gold is also good for ballast on a WWII submarine. In one of the Secret Service episodes a submarine had delivered a huge amount of ammunition to a site. This made the submarine too light to dive on the return trip and they planned on using sand bags. But those were too valuable stacked up as a defense against enemy gunfire.

So the site commander allowed them to take a shipment of gold and silver to use as ballast. When the Treasury Dept. found out about it they went ballistic, and for a time that submarine was by far the most valuable ship in the U.S. Navy.

I forget which episode it was, but it is on this list:

__________________
I heard the call to do nothing. So I answered it.
Walt34 is online now   Reply With Quote
Old 10-29-2015, 06:29 PM   #32
Recycles dryer sheets
 
Join Date: Aug 2015
Posts: 340
Gold is a bad investment, actually it is not investment at all. Yet, as some economists point out, it is a good insurance. In case of hyperinflation it will help you to survive. How many of you sure that we are immune to USD collapse? Latest example of currency collapse was in 1992 former USSR (once mighty and powerful empire). I heard stories similar to after WW1 Germany, if you needed to buy food, the only currency acceptable was jewelry or gold in many former USSR republics until economies had stabilized and new currencies introduced.
__________________
VFK57 is offline   Reply With Quote
Old 10-30-2015, 06:09 PM   #33
Recycles dryer sheets
 
Join Date: Apr 2015
Posts: 54
(OP here) Thank you all for your help. I will let you know if the gold topic pays off and my daughters research project wins her the essay prize.
By the way, we both learned a lot about gold. Rant or no rant, everybody's opinions are valuable. We can see that gold does play a part in securing some retiree's portfolios, if only for peace of mind! We also learned a lot about the history of gold. For example, we never knew it wasn't until the 70s when Americans could buy bullion. We also didn't realize to what an extent gold has played in crossing borders in times of war. We also did not know that you can buy gold in ETFs or even shares of the mining companies. We had a blast looking at all of the precious coins available. I am pretty sure that those coins will start appearing in Christmas stockings once the price comes down!


--ZG
__________________
zerogravity is offline   Reply With Quote
Old 10-31-2015, 12:30 AM   #34
Thinks s/he gets paid by the post
Lakewood90712's Avatar
 
Join Date: Jul 2005
Posts: 1,316
IIRC , the lowest cost producers are in the $800-900 oz range, so IMO, it's still an overpriced commodity at this time. If a scarcity occurred for some reason, plenty of production capacity to fill the need.
__________________
Lakewood90712 is offline   Reply With Quote
Old 10-31-2015, 07:07 AM   #35
Thinks s/he gets paid by the post
 
Join Date: May 2014
Location: Utrecht
Posts: 2,211
Quote:
Originally Posted by VFK57 View Post
Gold is a bad investment, actually it is not investment at all. Yet, as some economists point out, it is a good insurance. In case of hyperinflation it will help you to survive. How many of you sure that we are immune to USD collapse? Latest example of currency collapse was in 1992 former USSR (once mighty and powerful empire). I heard stories similar to after WW1 Germany, if you needed to buy food, the only currency acceptable was jewelry or gold in many former USSR republics until economies had stabilized and new currencies introduced.
I'd wager holding worldwide diversified stock (VT for example) would still beat out gold on a 10 year period. Not to mention inflation-linked bonds.

Unless you are talking complete breakdown of the world, in which case there are arguably still much better investments than gold to be found.
__________________
Totoro is offline   Reply With Quote
Old 10-31-2015, 10:41 AM   #36
Recycles dryer sheets
 
Join Date: Aug 2015
Posts: 340
Quote:
Originally Posted by Totoro View Post
I'd wager holding worldwide diversified stock (VT for example) would still beat out gold on a 10 year period. Not to mention inflation-linked bonds.

Unless you are talking complete breakdown of the world, in which case there are arguably still much better investments than gold to be found.
I hope we will never see a hyperinflation. How sure you are it is not going to happen? I still think that about 5% of portfolio should be in the PM.
__________________
VFK57 is offline   Reply With Quote
Old 10-31-2015, 06:03 PM   #37
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2005
Posts: 5,408
if you bought an ounce of gold back in 1975 the first year ownership was legal except for coin collectors at 175 an ounce , a 1 month t-bill rolled over every month would be worth more today .

the very thing it was supposed to protect against did a better job then the protector .

the gold would be worth 1143.00 today

the t-bills 1230.00

short term bonds 2151.00

60/40 mix 18,555.00
__________________
mathjak107 is offline   Reply With Quote
Old 10-31-2015, 07:34 PM   #38
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,904
Almost every person in this thread has ignored the one true possible upside of gold with their analysis. Gold protects you (somewhat) against a currency default. It is not a zero probability scenario. Actually it is more likely for a person in the world to experience a currency default or hyperinflation than a car jacking.
__________________
Fermion is offline   Reply With Quote
Old 10-31-2015, 08:43 PM   #39
Full time employment: Posting here.
Al in Ohio's Avatar
 
Join Date: Jun 2013
Location: Columbus OH
Posts: 688
Most people don't understand gold. It can be a good investment, but you have to know what your doing. Most don't For the inventor its best as a hedge against hyper inflation. If that occur s, only owners of precious metals will have anything of value to put food on the table. It might not happen in your lifetime, but if it does you'll wish you had real money. Gold is real money. The dollar and market shares are only currency.

My advice is to hold about 5 percent of your investments in gold. Some advise 10 percent, but that's for wealthy investors.

Just be patient and buy after a correction when it falls. simply study the 1-5 year price per ounce trends.

If you aren't willing to buy at a low correction or dollar cost average over the course of a year or more then hold for decades, don't buy gold.

Vast quantities of gold in the ocean?? Sure and elephants fly.


Sent from my iPad using Early Retirement Forum
__________________
Ohio INTJ ENG ER Hopeful
Al in Ohio is offline   Reply With Quote
Old 11-03-2015, 08:01 AM   #40
Recycles dryer sheets
 
Join Date: Jun 2014
Posts: 433
Regarding hyperinflation. My ancestors on my dad's side lived in Germany during 1900-1950... Not an awesome time. Physical gold was moderately useful but gold FUTURES were not. Most people invest in gold like stocks or bonds or anything... Not physical. Try and get the real gold when the government crumbles .

Moderately valuable, why? Because even with hyperinflation availability of goods and services crumbles. So yeah... You can buy bread with gold easier than a wheelbarrow but the value of gold is tied to what? Well... Whatever you can convince someone it's worth which isn't much when there's 100 people and 5 loaves of bread .

What WAS valuable was that they owned land and farm animals (you know... Producing assets ). So they could barter eggs for bread etc. Things didn't collapse to the point of massive roaving gangs of thugs (unless you count the SA in the 30s which required bribery... And Apple pies work pretty well when there's hunger).

Nevertheless if you want to collapse proof I suspect owning land/farm/animals is way better than gold because when economic systems collapse availability to stuff you need to live also wipes out the value of gold... Less than cash but not much less.

Gold is driven primarily by speculative return... You think someone else will pay more whereas stock in companies that generate value are a right to the share of future value. Of course most people treat stock as speculative return but in theory they are more like the farm and the gold is more like cash.

Sent from my HTC One_M8 using Early Retirement Forum mobile app
__________________

__________________
petershk is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
And gold, gold!, GOLD!!!!!!!!!!!! yakers FIRE and Money 1 05-17-2006 11:03 AM
Another new ETF for the Gold Bugs Hyperborea FIRE and Money 0 02-05-2005 09:01 AM
Buying physical Gold GTM FIRE and Money 10 01-14-2005 09:26 AM
Recommendation on gold/metals index fund? soupcxan FIRE and Money 19 10-19-2004 05:37 PM
Gold and Oil haha FIRE and Money 15 07-31-2004 10:38 AM

 

 
All times are GMT -6. The time now is 03:52 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.