Thoughts on Gold?

C

CorporateSoldier

Recycles dryer sheets
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Had a buddy who really thought I should get on the gold bandwagon a couple of years ago. Glad I didn't. Wondering if this may be the time to start buying.

I am 47 with about 550k in retirement savings. Mostly mutual funds, bonds and index funds. Typical stuff.

Thinking of putting maybe 50k into gold to diversify a bit. Wondering if I should wait to see if the price gets closer to $1000 an ounce. A lot of folks predicting gold prices will continue to drop for the next few months.

Thoughts o wise ones?
 
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Why would it be a good investment now (or soon)?

Gold is probably a very fine investment if your time frame is fifty years out. For shorter periods, I don't see any compelling reason to buy it.
 
If the global economy is improving, and we don't have a country go into default (or a new war), gold will go stale as it is not a true investment. Why not just pick up a few Krands or Maple Leafs from time to time and put them away for a hedge?
 
aja8888 said:
If the global economy is improving, and we don't have a country go into default (or a new war), gold will go stale as it is not a true investment. Why not just pick up a few Krands or Maple Leafs from time to time and put them away for a hedge?
Click to expand...

That actually is what I was thinking of doing. Maybe buying gold coins or bullion each month over a 1-2 year period to average cost out a bit. Putting it away and forgetting about it for at least five years and see what happens.
 
Have you considered precious metals equities as an alternative? They have been a pretty good hedge. The average PME mutual fund had positive returns of over 45% in the 2000-02 bear market, which was better than gold's 12% returns. They didn't do as well in the 2007-09 bear market, but still their losses were less than half those of the S&P 500. They have the advantage over gold of being a real investment. Gold is really a commodity, not an investment, and there's no particular reason to expect it to outpace inflation in the long run.

If you do go with gold coins or bullion, be sure to set it up in an IRA (a gold dealer should be able to help you do this). Gold returns get taxed at the collectibles rate of 28%.

Chris

Chris
 
A bullion coin will cost near $100 over spot price. Buy GLD & get near spot price.
 
CorporateSoldier said:
Had a buddy who really thought I should get on the gold bandwagon a couple of years ago. Glad I didn't. Wondering if this may be the time to start buying. I am 47 with about 550k in retirement savings. Mostly mutual funds, bonds and index funds. Typical stuff. Thinking of putting maybe 50k into gold to diversify a bit. Wondering if I should wait to see if the price gets closer to $1000 an ounce. A lot of folks predicting gold prices will continue to drop for the next few months. Thoughts o wise ones?
Click to expand...

Absolutely buy gold and silver. Not the ETFs as we don't really know if they have the metals they claim to.
It may go down more but we don't know the bottom.
Bernsteins book Deep Risk gives some good reasons amongst others.
 
I would recommend you buy numismatic coins. That way, even if the price of bullion drops, you still have some collectable value. Rare or collectable coins rarely drop significantly in response to bullion value.
 
I have a very small position in Barrick Gold that I bought bottom fishing this year. I have no real insight into which way the price of gold will go, but it appears that the gold mining equities have low correlation with the markets which has some appeal.
 
Is deep risk the same thing as deep dodo? Is it legal for an exchange traded fund to not own the underlying securities? The minted coins are pretty to look at. But I'm sure if dodo hits the fan you'd better be able to back each ounce of gold you have with 20 ounces of lead in order to keep it.
 
Refresher said:
Absolutely buy gold and silver. Not the ETFs as we don't really know if they have the metals they claim to.
It may go down more but we don't know the bottom.
Bernsteins book Deep Risk gives some good reasons amongst others.
Click to expand...

I suppose a stock of tinfoil may be useful as well?

My own tinfoil allocation is MREs, potable water and ammunition.
 
A heart of gold is my favorite form of gold. No premium no storage fee & it pays mucho dividends.
 
We have these little guys at the feeders all year round. They're wonderful, and my only investment in gold (they go through a LOT of nyger seed!).
 

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I've perfected market timing. If I buy it it will go down. If I sell it it will go up. Market timing is so easy. I can't believe people have a problem with it.
 
I have a few stories:
1) In 1980 FIL bought about $800 in newly minted foreign silver coins. It appears that today they have a melt value of about $300. Yes raw silver has appreciated more than this but these were coins sold by a dealer at a premium from the melt value.
2) My coin collection that I put together in the 60's has about the same value as then, except for silver which has melt value.
3) It appears that top of the line coins have increased in value such as mint 1909-S VDB penny. Or 100 year old proof sets. 40 year old ones are worth less than the Mint sold them for.
4) Coins are like jewelry. In theory they could go up but a dealer will never buy at more than 50% of FMV. If you are buying coins for melt value, you should understand that the most you will see is 90% of the price of the commodity. If silver is $20, you will only get $18.
 
You know this thread is turning into a gold mine of information. A melting pot of knowledge. I do have a glittering personality. Sorry just holiday stress exiting.
 
I'm buying gold bullion coins, a few every six months or so.

Mercury Head dimes and Walking Liberty halves when I can get them.

At this point I dont mind if the price is down as it lets me buy more.

When you put those gold coins in your hand - it just feels like you have real money. I cant quite describe it. Much different than paper bills or figures in an account statement.
 

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The Government of Canada is planning to sell some of its century old gold coins (for more than their weight in gold) so perhaps the price will fall further.

Bank of Canada

I have some gold and silver certificates in my portfolio but together they make up ~1.5% of my NW. I bought them as insurance in 2008 and they are still worth more than I paid for them. There is an inverse relationship between gold and the stock market, so I am not in the least surprised at gold's recent behavior.
 
Z3Dreamer said:
I have a few stories: 1) In 1980 FIL bought about $800 in newly minted foreign silver coins. It appears that today they have a melt value of about $300. Yes raw silver has appreciated more than this but these were coins sold by a dealer at a premium from the melt value. 2) My coin collection that I put together in the 60's has about the same value as then, except for silver which has melt value. 3) It appears that top of the line coins have increased in value such as mint 1909-S VDB penny. Or 100 year old proof sets. 40 year old ones are worth less than the Mint sold them for. 4) Coins are like jewelry. In theory they could go up but a dealer will never buy at more than 50% of FMV. If you are buying coins for melt value, you should understand that the most you will see is 90% of the price of the commodity. If silver is $20, you will only get $18.
Click to expand...

Some online dealers will pay spot to over spot for silver. Americans Eagles probably $2 over spot.
 
I have a little GLD, hand full of gold, silver currency(all collected for face value), couple 1909 vdbs, one found not long ago going through change.

My other pm is lead.

MRG
 
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