Thoughts on investing in gold/silver

[buckeyefarmer]

My thought is, if you really should put your money into gold, then why is everyone on TV trying to sell theirs to you? I think the gold boat sailed away long ago, it's too high priced now to buy.

 

[timswi]

My thought is, if you really should put your money into gold, then why is everyone on TV trying to sell theirs to you? I think the gold boat sailed away long ago, it's too high priced now to buy.

Agreed..Except for the last few years, gold has not been a very good investment. It did nothing between 1980 and 2001 except decline. If the economy turns around it will tank. Always does.

Remember that investing in metals is playing the commodities markets. No different than pork bellies and soybean futures..Very dangerous turf for even the professionals.

If you're worried about economic collapse (unlikely)..The barter system always takes over...Always. No one cares about metals if they need food...They want useable stuff to trade for other useable stuff...Sorry, the Economics degree kicking in

 

[Chuck52]

D) In 1973 hid $1000 in hundred dollar bills for emergency. Still have them. Still worth $1000. Huge loss in value due to inflation.

I would have forgotten where I hid it long ago.

Chuck

 

[tallyho8]

IN 1973 I invested (saved) $43,000.

A) In 1973 bought house for $16,000. In 2005 sold house for $120,000 with about $30,000 of hurricane damage to it. Made $36,000 in rental income after all expenses, taxes, repairs, insurance, interest. Profit $140,000 over 32 years on $16,000 investment.

B) In 1973 bought house for $15,000. Have made $85,000 in rental income after all expenses. Could sell house today for $190,000. Profit $260,000 over 37 years on $15,000 investment.

CORRECTION: I just realized that I made errors in my previous post. I bought both of those properties with a mortgage with 20% down and the interest was deducted from my gross profit before my net profit was figured so I made much more than I had stated. It should have been:


IN 1973 I invested (saved) $18,200.

A) In 1973 bought house for $3,200 down. In 2005 sold house for $120,000 with about $30,000 of hurricane damage to it. Made $36,000 in rental income after all expenses, taxes, repairs, insurance, interest. Profit $152,400 over 32 years on $3,200 investment.

B) In 1973 bought house for $3,000 down. Have made $85,000 in rental income after all expenses. Could sell house today for $190,000. Profit $272,000 over 37 years on $3,000 investment.

I noticed my mistake when I realized that I had nowhere near $43,000 in assets in 1973.

 

[beppington]

Ive met few people whom really rang the bell on commodity plays....without giving it back again on the next transaction

Just like my friends' BIL; He's into gambling & always ready to discuss the big money he won at this or that ... but never mentions all the losing.

 

[beppington]

Most of us are better off doing it via the diversified approach.....IMHO.

:thumbsup: Diversify over both time (i.e. don't try to time the market, you can't do it successfully for very long, & you'll waste a lot of time & $ trying) & allocation classes (establish how much Small Cap, Large Cap, Int'l, Bonds, Cash your portfolio consist of, & stick to that allocation thru thick & thin (notice how I excluded gold/ silver)).

And stick to your plan. Regular monthly or twice monthly investments will make you happy when 1) the market's up since, well, hey, the market's up!, and 2) when the market's down since you get to buy more cheaper.

 

[beppington]

I feel that real estate is the best possible way to invest money BUT it takes research, instinct, knowledge of the market, more work than any of the other ways and good luck.

I have several books & other sources stating, & backed by historical research, that over any 10-year period stocks have outperformed every other investment including real estate & gold/ silver.

An investor that regularly adds to his established stock index mutual fund portfolio through good times & bad doesn't need instinct or have to do a lot of work. He just keeps on keepin' on.

As always, my :2cents:

 

[sweettractors]

If you think that this country is not going to survive the massive national debt load over the next few years, (Like some European countries are having problems now) IMHO Buy all the gold and silver you can afford. The Dollar will not be worth anything. Ken Sweet

 

[smstonypoint]

:thumbsup: Diversify over both time (i.e. don't try to time the market, you can't do it successfully for very long, & you'll waste a lot of time & $ trying) & allocation classes (establish how much Small Cap, Large Cap, Int'l, Bonds, Cash your portfolio consist of, & stick to that allocation thru thick & thin (notice how I excluded gold/ silver)).

And stick to your plan. Regular monthly or twice monthly investments will make you happy when 1) the market's up since, well, hey, the market's up!, and 2) when the market's down since you get to buy more cheaper.

Great advice in my opinion, although I am agnostic about whether an individual should hold precious metals in his/her portfolio. It's not for me, but it may work for others. If I was going to include the precious metals, I would certainly do so with ETFs rather than the physical commodities.

I would just add that a portfolio likely will require rebalancing periodically to maintain the desired asset allocation. That's one of the reasons I like the all-in-one mutual funds from Vanguard, Fidelity, T. Rowe Price, and others. They do the rebalancing for you.

Steve

 

[smstonypoint]

:2cents:

I have several books & other sources stating, & backed by historical research, that over any 10-year period stocks have outperformed every other investment including real estate & gold/ silver.

An investor that regularly adds to his established stock index mutual fund portfolio through good times & bad doesn't need instinct or have to do a lot of work. He just keeps on keepin' on.

As always, my :2cents:

Not quite true based on recent experience.

Schaeffer's Media Outtake: Weighing Stocks vs. Bonds

I think most financial advisers would recommend a diversified portfolio with both equities and bonds.

Steve