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Old 04-11-2015, 03:19 PM   #41
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We have this discussion every year or two. I've said it before and (if I live so long) I'll say it again: Every "bad" thing you've heard about gold is true! Yet, can anyone name a store of wealth (aka currency) which has been used as currency since before recorded history? Even the most "stable?" currencies, such as the US dollar have actually morphed quite a bit in the past 150 to 200 years. The US dollar was once a "gold certificate" then a "silver certificate" and now, well, it's just a piece of paper (backed by the full faith and credit of the USA). As long as that's "good enough" for everyone, it's a good currency. When/if folks decide that's not good enough, the dollar could become virtually worthless. The point is that gold (for all its many faults) is the only universally (can I say that here on Earth?) recognized currency that has always BEEN recognized universally as currency.

More practically, I have read several articles (google the subject) suggesting that 3-5% in PM (usually gold) stabilize a portfolio. I can vouch for this during the most recent unpleasantness (2008 - ??). The value of my port didn't decline during that period, primarily because of gold (it didn't hurt that my stock portion was in the 30+% range, heh, heh.)

I really like Sengsational's treatise on the subject of gold. He explodes the "straw man" argument that gold is bought for catastrophic times only. It's true that you can't eat gold, so for the apocalypse, canned beans would be the better bet. But for situations between boom and bust (but not the end of the world), gold seems to have at least some arguable place in at least some of our portfolios. Gold also has the added potential for "local" end-of-the world "escape-clause" usage as pointed out by Running_Man.

Having said all of this, I don't recommend gold for anyone else. I just believe folks should decide for themselves, based on as much knowledge as they can gain on the subject.

Regarding UnrealizedPotential's relative, I would suggest helping him/her understand arguments for and against gold. If finances are otherwise stable and adequate, a small purchase of gold is unlikely to disrupt ER plans. If owning a little gold gives some comfort (and allows a bit of courage to invest wisely in a more typical AA) then it might well be worth $70K for "insurance" protection. As always, YMMV.
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Old 04-11-2015, 03:27 PM   #42
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No, gold is not worth owning. Please send all of yours to me; I promise to give it a good home.

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Old 04-16-2015, 05:49 PM   #43
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Old 04-16-2015, 05:56 PM   #44
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my gold fund has been getting it's butt kicked this year
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Old 04-16-2015, 06:33 PM   #45
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my gold fund has been getting it's butt kicked this year

Tax loss opportunity!!!

I have about 10 gold stocks I follow. Been interchanging them the last year or so to realize tax losses.

But someday, Alice, to the moon!


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Old 04-16-2015, 06:48 PM   #46
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well it was "only" a $10K investment a year ago....
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Old 04-17-2015, 07:50 AM   #47
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I own some gold and silver and gift a little to my kids each year.

My parents saved old coins, so did my DW's grandparents. They hoped these old coins would grow in value and some of them have. We still have every one of them and will give them to our kids.

My parents lived through the depression and WW2. They saw what happened to banks and the value of gold and jewelry to escape from war in Europe. Can this ever happen again? Look at how the Jews were treated by terrorists in France a couple of months agol

So, each Christmas I give my kids a little bit of gold and my grandkids an ounce of silver. I've been doing this since gold was $300 an ounce. Never.....never....would I allow gold to represent more than 1% of my net worth.....never, I tell my kids should they sell their gold......it's NOT a good investment.....it's part of my and their heritage.

Overall would my money be better placed in a good mutual fund.....you bet.....but we live in a crazy world.....ISIS.....sending our kids in battle......just averting another depression in 2009.....who knows what can happen in the future.

So, if I needed the cash for a comfortable retirement I wouldn't buy gold.....it's not a good investment. But I have it, love it, love sharing it with my kids and hope I never need it.
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Old 04-17-2015, 08:24 AM   #48
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gold is the ultimate form of money. that's why countries and central banks around the world buy it. China owns tons and tons of it, India prizes it above any other possession. it is recognized around the world as a currency of exchange.

own it as a currency. don't expect dividends, do expect volatility. until you've held a gold coin in your hand, you won't experience the feel of real money.
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Old 04-17-2015, 08:49 AM   #49
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gold is the ultimate form of money.
Or the international equivalent of Beanie Babies.
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Old 04-17-2015, 08:56 AM   #50
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yes, but central banks don't buy beanie babies......nor was our fiat ever backed by them....
but maybe we should go on the beanie baby standard.

Updated Beanie Babies Price Guide | Love My Beanies
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Old 04-17-2015, 09:53 AM   #51
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Unless you are a manufacturer of some product in which Au is a component, no. It's just a metal with some interesting properties - good and bad.
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Old 04-17-2015, 10:08 AM   #52
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Or the international equivalent of Beanie Babies.
are beanie babies a real asset? maybe

gold definitely is
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Old 04-17-2015, 10:16 AM   #53
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Gold is much closer to pork bellies than beanie babies.... and pork bellies usually end up as bacon, so win-win! :^)
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Old 04-17-2015, 10:32 AM   #54
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Gold will always have value. The same cannot be said of bitcoins, stock certificates, or even paper currency. The previous three may have a better return over a short period, and that short period could be many times longer than your lifetime, but gold has always had some value for the previous 5000 years.
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Old 04-17-2015, 01:48 PM   #55
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Or the international equivalent of Beanie Babies.
seems to have quite a bit more staying power.
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Old 04-17-2015, 02:14 PM   #56
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No, gold is not worth owning. Please send all of yours to me; I promise to give it a good home.

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Old 04-19-2015, 07:32 PM   #57
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First, we have ~8% of our assets in GLD. Since GLD was founded in 2006, it's risen from $44 to $115. Au is not a not a commodity as it doesn't get/hardly gets consumed. It's always there. Net, I'd rather hold it than greenbacks - which keep getting printed nilly willy. Think of how much the US$ has risen vs. other currencies & yet Au still outperforms it. So just why would you want US cash or low pay CD's vs. Au? Now if you'd rather invest in something than hold cash, maybe you have something. Try thinking of Au as the standard instead of the USD and think of the USD as the commodity.
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Old 04-20-2015, 06:25 PM   #58
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First, we have ~8% of our assets in GLD. Since GLD was founded in 2006, it's risen from $44 to $115. Au is not a not a commodity as it doesn't get/hardly gets consumed. It's always there. Net, I'd rather hold it than greenbacks - which keep getting printed nilly willy. Think of how much the US$ has risen vs. other currencies & yet Au still outperforms it. So just why would you want US cash or low pay CD's vs. Au? Now if you'd rather invest in something than hold cash, maybe you have something. Try thinking of Au as the standard instead of the USD and think of the USD as the commodity.
I would rather own high quality equity that grows dividend faster then inflation rate like PEP or CL.
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Old 04-20-2015, 07:54 PM   #59
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My Mom owned shares of Rath Packing, which operated from 1891 to 1985. "Through two world wars, stock market panics, depression, and drought, the company had failed to show a profit in only four of its years". Their Blackhawk Indian chief emblem was omnipresent in any grocery meat and deli area. Pretty high quality stock. Then they went bust and weren't worth anything. Don't think that has happened to gold in like, ever? For hundreds or thousands of years?

Mom also had Enron through the bust, and we had GM and BofA. (can you tell we are real stock pickers?) All fine stocks until they weren't. Gold holds a different role in a portfolio.
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Old 04-20-2015, 08:13 PM   #60
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My Mom owned shares of Rath Packing, which operated from 1891 to 1985. "Through two world wars, stock market panics, depression, and drought, the company had failed to show a profit in only four of its years".
The stock paid dividends 96% of the time? Gold pays dividends 0% of the time, right?

The true value of gold based on its utility (use to industry, etc) is a small fraction of its market value. The balance is due to very fickle demand based on . . .sentiment, habit, belief that another buyer will eventually be found at a higher price, whatever. But in many ways it is just as much a "fiat currency" as paper money.
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