Gold

[Koolau]

Just another flavor of commodity speculation IMO.

I can't imagine how gold coins would be of much value in a SHTF situation.

I mentioned one in my previous post. Given a couple of hours (and any interest) I'm sure I could find several more that have actually happened in the past 100 years. A Google search would probably get you there if you have actual interest in the topic.

SHTF is a colorful and expressive way to describe any number of bad situations, but it's not very specific. In my post, I mentioned the apocalypse. I'd say that qualifies as a SHTF situation (apocalypse as in the-end-of-all-or-most-all-civilization-as-we-know-it). Gold probably would not do much good in the apocalypse. But I usually think of SHTF as something a bit more manageable. A half mile wide asteroid striking Buffalo might qualify. Maybe a less intense SHTF event would be huge solar flare knocking out N American power grid(s) for 6 months or 2 years. In that specific case, cash might be king for a while, but gold has been money 5000 years longer than the dollar. Wild guess is gold would become an acceptable store of wealth (and trade) when ones and zeros no longer flow. Of course, we'll never know until, well, you know, TSHTF.

I don't feel as if I'm commodity-speculating as much as I am purchasing a certain level of SHTF insurance. Like most insurance, you hope you never need it. You probably don't buy it if you are living paycheck to paycheck. But if you've met most of your other FIRE needs, thinking about SHTF possibilities and "insuring" for them might come to mind. BUT the real reason to hold PM (IMHO) is that they have been shown to smooth portfolios when held in 2% to 5% of port. IIRC this is primarily due to gold's aforementioned negative correlation to most "normal" investments. The SHTF scenarios are fun to talk about (and imagine ) but I think of them as secondary to (arguably) good portfolio management. PMs absolutely smoothed my port. during the '08 - '10 unpleasantness. BUT, more than most subjects, this is a YMMV situation.

 

[Spock]

My take on gold and "SHTF":
Jumping to the end: gold will likely be convertible to whatever currency/monetary system survives or rises from the ashes. Like a fire insurance policy, its not useful during the fire its for rebuilding after the fire.


During SHTF: it depends on how bad, how long, and how widespread the crash is. During something mild like Brazil/Argentina type inflation, gold will be an inflation hedge and useful for trade. During Mad Max (the later movies, not the first movie) beans and bullets will be more useful.

I use it as another layer of diversification across currencies vs. having all of my eggs in one monetary system/currency basket. The All Weather/Season Portfolio suggests 15-20% in commodities with half of that in gold. I prefer physical gold vs. paper ETFs in order to be useful for other scenarios.

 

[meleana]

Coins and bullion. Used to have Gold and Silver shares- sold them quite a number of years ago.

 

[Dalmore]

I have a pile of scrap gold (old jewelry, teeth fillings, etc). Eventually, when I have time after ER, I plan to see if I can refine it all into a gold bar.

 

[catii]

I only have 50 ounces of gold, but I have accumulated over 20 pounds of silver.

I keep an eye out for Millennials who are selling their parents'/grandparents' Sterling silverware, & buy it up as a set, not at melt prices. Then I melt it into 100-ounce ingots, & toss those into my vault. Been doing that for 40 years. Still a small part of our retirement fund, but not insignificant, as it's an extremely liquid asset.

 

[aja8888]

I only have 50 ounces of gold, but I have accumulated over 20 pounds of silver.

I keep an eye out for Millennials who are selling their parents'/grandparents' Sterling silverware, & buy it up as a set, not at melt prices. Then I melt it into 100-ounce ingots, & toss those into my vault. Been doing that for 40 years. Still a small part of our retirement fund, but not insignificant, as it's an extremely liquid asset.

How do you assay the silver ingot to figure the content? Or not?

 

[HFWR]

Don’t own any separate from exposure in my index funds. Did own a small bit for a time in the ETF GLD, but eventually decided that owning anything but physical gold was likely not helpful for SHTF purposes, that there was no dividend for holding physical gold, that the transaction costs for buying physical gold were too high, that storage and security was a problem, and, lastly but not leastly, that gold trades for more than its value as an industrial metal (IMHO), so owning anything with a value that is highly dependent on the greater fool theory seemed counter to my investment philosophy, such as I have one...

 

[Dash man]

I own enough gold to have a dentist make me a crown if needed. I have a lot of crowns. [emoji846]

 

[catii]

How do you assay the silver ingot to figure the content? Or not?

As long as I'm melting down stamped Sterling silver, I just assume it's 0.925 silver. If I get much of anything else, then I go by my favorite salvage yard, where they let me use their X-ray diffraction gun to figure out what I have, & I try not to mix precious metals of really-diffeent content.

 

[catii]

How do you assay the silver ingot to figure the content? Or not?

As long as I'm melting down stamped Sterling silver, I just assume it's 0.925 silver. If I get much of anything else, then I go by my favorite salvage yard, where they let me use their X-ray diffraction gun to figure out what I have, & I try not to mix precious metals of really-different content.

 

[aja8888]

As long as I'm melting down stamped Sterling silver, I just assume it's 0.925 silver. If I get much of anything else, then I go by my favorite salvage yard, where they let me use their X-ray diffraction gun to figure out what I have, & I try not to mix precious metals of really-different content.

Good planning. Nothing worse than a mixed alloy. I was in the non-ferrous business a long time ago.

 

[MultiEventer]

I hold a disproportionate amount of gold, mining companies and ETF's in my portfolio as I have divested from the general stock market. I'm playing defense right now after 10 years of magnificent stock market returns that allowed me to FIRE at age 54. I have missed out on this past year's stock growth, especially from the tech stocks I sold earlier this year, but the holdings I had in ETFs like NUGT or JNUG, as well as individual stocks like AG more than made up for it during the summer PM price explosion. The Christmas week rally in the PM"s also added to that. I don't know when nor how the next recession hits us, but it's going to be a nasty one given the fact the nations continue to grow their national debts like it's some sort of competition. It would at least be prudent to have 10 or 20% of your investments in metals IMHO. As well as have an even larger portion in cash to to gobble up stocks that will come on sale. When it happens, tech stocks will go on sale 80% and other stocks at least 50%.

 

[pc95]

We hold about 1% of our total portfolio in Gold - half in actual coins and half in GLD. I've had them for about 7 years. They have not done that well.....I just bought it as a small diversification. In contrast we have about 3% of our portfolio in foreign currencies.

 

[jazz4cash]

I was thinking of posting a comment elsewhere. It seems like neither gold nor bitcoin reacted as I would’ve expected to the volatility in the equity markets.

 

[Spock]

I was thinking of posting a comment elsewhere. It seems like neither gold nor bitcoin reacted as I would’ve expected to the volatility in the equity markets.

Look at the gold curves during the 2008 crash. Gold dropped big as people needed cash to cover margin calls or other losses. The phrase goes something like "sometimes you sell what you can, not what you want". Then it went up to record highs.

Gold is a funny asset. When things are really crazy and it spikes, you don't want to sell it because, well, things are really crazy. When things are calm, you don't want to sell it because its your insurance for when things are crazy.
My coins are probably going to be my last asset drained to pay for my LTC.

 

[pc95]

Look at the gold curves during the 2008 crash. Gold dropped big as people needed cash to cover margin calls or other losses. The phrase goes something like "sometimes you sell what you can, not what you want". Then it went up to record highs.

Gold is a funny asset. When things are really crazy and it spikes, you don't want to sell it because, well, things are really crazy. When things are calm, you don't want to sell it because its your insurance for when things are crazy.
My coins are probably going to be my last asset drained to pay for my LTC.

Yes something different - that used to be more "liquid" and accepted in barter or trade. I wish I had that many coins. As my mentor once told me, "you can't eat gold either."