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Old 11-19-2007, 07:01 PM   #21
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That strategy would have required an awful lot of patience from 1980-2001.

Might also have been a bit troubling from the mid 30's to the late 70's, when gold lost half its value against inflation.

Interesting indicator. My FIL, who lives in the heart of the original Gold Rush Country, bought a few gold coins a couple of years ago. On seeing that the price of gold was up a bit from where he bought, he went back to the dealer he bought the coins from. Wouldnt buy them back. At any price. Went to several other coin and precious metals storefronts in town (a common item around here) and was also turned away.
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Old 11-20-2007, 02:55 AM   #22
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well i wouldnt go back to the 20's and 30's as until the 70's the price was fixed by the gov. but running forward from the 70's like all long term investments no doubt it would have taken patience.

but a mix like harry browns permanet portfolio ,25% in each catagory, long term bonds, stocks, gold and cash wouldnt have done to bad rebalanced yearly. it was just a longer wait than most of us want.
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Old 11-20-2007, 10:06 AM   #23
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Such a mix has produced a long term net return of about 1% over treasuries with far more volatility. After inflation, you'd see about a 2.5% SWR.

I guess thats better than "done bad", but its a good far cry from "good".
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Old 11-20-2007, 06:14 PM   #24
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if i remember from the last time i looked from 1982 to august 2006 the return was about 6.5% and with the run up in gold and stocks since then i bet its closer to 7%. i dont think treasuries returned 6%
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Old 11-20-2007, 06:32 PM   #25
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Check the after tax numbers.

Great portfolio idea for the 1800's or maybe even the 1950's. Not so sure its that great now. In fact, prior to the gold run-up of the last few years, it sucked for decades.
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Old 11-20-2007, 06:43 PM   #26
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i have to agree, that i think it lagged up until recently
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Old 11-20-2007, 09:44 PM   #27
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Then now must be the time to buy, while the irons hot, eh?
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Old 11-22-2007, 06:35 PM   #28
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You don't have to pay any taxes if you sell your metals for a gain, correct?
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Old 11-22-2007, 07:50 PM   #29
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Sorry, the tax is pretty high, at the collectibles' rate of a maximum 28% rather than the 15% capital gains rates maximum, for assets held more than a year. If less than a year it is taxed at ordinary income rates.
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Old 11-23-2007, 10:20 AM   #30
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Check the after tax numbers.
Taxes on gold appreciation!?

One of the benefits of actually holding gold itself is the privacy if offers! One has the choice to pay taxes on it or not.
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Old 11-23-2007, 10:45 AM   #31
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if you sell thru any reputible place like bank or brokerage its reported when you trade it in. if you dont and take it somewhere priviate good luck as you will be offered way way below spot for sure. either way it will cost you dearly
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Old 11-23-2007, 11:03 AM   #32
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if you sell thru any reputible place like bank or brokerage its reported when you trade it in. if you dont and take it somewhere priviate good luck as you will be offered way way below spot for sure. either way it will cost you dearly
There are several reputable coin dealers where I live and none of them report anything below $10K annually in transactions. Margin from spot price from all of them has been excellent in my experience.
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Old 11-23-2007, 11:12 AM   #33
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Hmm, I guess I could sell my equities and not report those on my schedule D. That'd be as effective and just as legal.

But then again we were talking about the "permanent portfolio" allocation scheme and presumably the fund that follows such a scheme, and also presumably legally reporting our taxes so we dont get a free early retirement courtesy of the feds.

Rebalancing such a construction and taking occasional withdrawals for living expenses produces a lot of (legally) taxable events.
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Old 11-23-2007, 12:05 PM   #34
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i had bought years ago from fidelity and benham capital. fidelity though was a mistake as i took delivery and had to pay sales tax. i didnt feel like shlepping to fidelity to sell them so i sold them thru deak international.....

what a 2nd mistake that was. i got way lower than spot and for the record they did report it
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Old 11-23-2007, 02:13 PM   #35
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Hmm, I guess I could sell my equities and not report those on my schedule D. That'd be as effective and just as legal.
Except isn't there a paper trail there? And possibly reporting to the IRS (I really don't know)?

There are other benefits to privacy, besides income tax issues.
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Old 11-23-2007, 02:18 PM   #36
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Well congratulations. This is the first time I think anyone on the forum has ever espoused the potential for tax evasion as a benefit of an asset class...
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Old 11-23-2007, 02:23 PM   #37
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Well congratulations. This is the first time I think anyone on the forum has ever espoused the potential for tax evasion as a benefit of an asset class...
Actually, I did no such thing. I merely said that privacy offered the investor choices.

For example. "What if" the government suddenly decided to confiscate gold again? Privacy gives you choices. "What if" the government decided to increase the capital gains rate to 90%? Privacy gives you choices.

Yes, those are highly unlikely scenarios. BUT, privacy gives you flexibility and freedom if those were ever to happen.

You can keep things private and still pay every cent the government says you owe in taxes.
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Old 11-23-2007, 02:45 PM   #38
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Actually, I did no such thing.
Yes you did!

But, no big deal.
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Old 11-23-2007, 04:07 PM   #39
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Its okay Youbet, I'm ready to be tagged back in...

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Actually, I did no such thing.
I'm a little confused then. You claimed that gold isnt tax inefficient because you can private sale it without the sale being recorded, yet you arent saying that?

What the heck ARE you saying?

Or did you miss Marthas post that when legally reported as a sale, that you'd pay about twice as much in taxes on gains in gold than pretty much any other asset class?

I guess I'll hang on to my good performing, tax efficient, non-private asset classes...
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Old 11-23-2007, 04:11 PM   #40
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Sorry if I've been confusing. I certainly don't want to advocate that anyone break the law, because there are consequences for doing so, especially for tax evasion.

With that said, IF someone is going to invest in gold, why not purchase gold privately and anonymously, without any paper trail? What you choose to do with the gold in the future is a bridge that can be crossed then, but owning it privately breaks no laws and gives you future flexibility.
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