Investment Advice...Buying Gold/Silver/Platinum

[TD_washingtonredskins]

Given the unpredictability of investments lately, I've considered investing in precious metals. Does anyone with knowledge have any advice about this? Is it smart? Safe? How would I even get started?

Any advice or input would be great and much appreciated.

[SnyderShrugged]

I think you are a few years too late.

[TD_washingtonredskins]

I think you are a few years too late.

Can you explain? I assume you mean that I will be buying high...but that's not really what I'm wondering about.

I'm more wondering if it precious metals are more secure/safer than mutual funds or money market accounts.

Thanks in advance.

[SnyderShrugged]

Can you explain? I assume you mean that I will be buying high...but that's not really what I'm wondering about.

I'm more wondering if it precious metals are more secure/safer than mutual funds or money market accounts.

Thanks in advance.

I certainly think they are, but I know there are a few here who understand this issue in better depth than I could ever provide.

I think Gibbsfactor and Hubbs could be good resources for you. Those guys know their stuff!

[TD_washingtonredskins]

I certainly think they are, but I know there are a few here who understand this issue in better depth than I could ever provide.

I think Gibbsfactor and Hubbs could be good resources for you. Those guys know their stuff!

Sounds good...hopefully some others chime in. Thanks for responding.

[GibbsFactor]

I bought 10k in gold back in 07 when it was under $630 an oz. :cool:

[TD_washingtonredskins]

I bought 10k in gold back in 07 when it was under $630 an oz. :cool:

Is it something that you would still recommend doing? Also, do you physically keep the gold or do you just own it and have it stored somewhere else?

I really don't know anything about this type of investment and haven't been able to find objective information on it. Each site I visit seems to be selling their services.

[GibbsFactor]

Given the unpredictability of investments lately, I've considered investing in precious metals. Does anyone with knowledge have any advice about this? Is it smart? Safe? How would I even get started?

Any advice or input would be great and much appreciated.

You'll get differing opinions on this site about the wisdom in playing the market, which is what you are intending here.

You want to get in on the commodities market. The thing about commodities is that they are essentially tied to the currency regarding value. The value of Gold is a set price. When currencies go up and down in price, the value of gold follows. It either goes up, or down.

Back in the 20s, the Rothchilds of the world went in before the market crash and purchased gold as a way to hedge their eventual losses they KNEW they were about to take from the market.

Last year, Saudi Arabia bought some huge amount of Gold, want to say it was over $60 million worth. Why? Because gold, silver, platinum goes up when the world's economy goes in the ****ter. It's worth what it's worth and it doesn't matter what the dollar is worth. You've missed out on any real gains and it's now really a pipe dream to think that gold hits $1500, as many hoped (including me for obvious reasons) and predicted it would. The US dollar making a serious comeback was not foreseen by many economists and everyone essentially overlooked how influential the US really still is (people had more faith in us to get it right then their own Government so they bought up our currency instead of their own). The prices have stayed relatively stable over the past year or so after a big 45% climb in 07.

Precious metal is a good hedge against inflation. But don't think of it as a good "investment" vehicle. I've made some coin off it (roughly 50% in two years) and am glad I own it now as a safe haven in the event things get any worse. Of course, for Gold to make any run now, we may be in such bad shape you best be looking for guns instead.

A little known nugget is that we are currently in a silver shortage worldwide. Silver is much cheaper then gold.

Either way, it's a nice hedge on your money because if the dollar goes down or if we go into hyperinflation, your metal will always be worth what it's worth. So when the dollar goes down, your metal goes up.

Always buy the actual metal. Don't buy into shares of an ounce of gold or buy stock in gold or stock in mining companies. Get the actual bullion.

[TD_washingtonredskins]

You'll get differing opinions on this site about the wisdom in playing the market, which is what you are intending here.

You want to get in on the commodities market. The thing about commodities is that they are essentially tied to the currency regarding value. The value of Gold is a set price. When currencies go up and down in price, the value of gold follows. It either goes up, or down.

Back in the 20s, the Rothchilds of the world went in before the market crash and purchased gold as a way to hedge their eventual losses they KNEW they were about to take from the market.

Last year, Saudi Arabia bought some huge amount of Gold, want to say it was over $60 million worth. Why? Because gold, silver, platinum goes up when the world's economy goes in the ****ter. It's worth what it's worth and it doesn't matter what the dollar is worth. You've missed out on any real gains and it's now really a pipe dream to think that gold hits $1500, as many hoped (including me for obvious reasons) and predicted it would. The US dollar making a serious comeback was not foreseen by many economists and everyone essentially overlooked how influential the US really still is (people had more faith in us to get it right then their own Government so they bought up our currency instead of their own). The prices have stayed relatively stable over the past year or so after a big 45% climb in 07.

Precious metal is a good hedge against inflation. But don't think of it as a good "investment" vehicle. I've made some coin off it (roughly 50% in two years) and am glad I own it now as a safe haven in the event things get any worse. Of course, for Gold to make any run now, we may be in such bad shape you best be looking for guns instead.

A little known nugget is that we are currently in a silver shortage worldwide. Silver is much cheaper then gold.

Either way, it's a nice hedge on your money because if the dollar goes down or if we go into hyperinflation, your metal will always be worth what it's worth. So when the dollar goes down, your metal goes up.

Always buy the actual metal. Don't buy into shares of an ounce of gold or buy stock in gold or stock in mining companies. Get the actual bullion.

Thank you very much for the intel!

Where does one go about buying the metal itself? Also, do you literally have it at your house or do you just own it while a bank/company stores it for you?

I had thought about silver recently too...but doesn't it require some maintenance?

Sorry for all the questions...that's what you get for being knowledegable.

[McD5]

Do you actually want to take physical possession of the metals?

Store them......etc....

Or do you prefer that they are held at a brokerage, online?

[TD_washingtonredskins]

Do you actually want to take physical possession of the metals?

Store them......etc....

Or do you prefer that they are held at a brokerage, online?

That's my question...I'd prefer to not have precious metals in my house like that, but I'm not sure how you find a place that is reputable and you can trust that you now own x amount of silver/gold.

[McD5]

That's my question...I'd prefer to not have precious metals in my house like that, but I'm not sure how you find a place that is reputable and you can trust that you now own x amount of silver/gold.

Storing them, and then eventually selling them can be a real pain in the ass.

You may prefer doing some research on virtual gold. Online sights that house it for you, and provide acct statements, etc.

Or....you can open up a stock brokerage account, and trade etfs....exchange traded funds, that mirror the movement of the underlying security.

For Gold....the symbol is GLD.

Silver....SLV

You can easily get live quotes on these all day......from yahoo, or anywhere else.

[Hubbs]

Personally, I'm looking to put roughly 20% of my own investments into precious metals. They're good as a hedge against another stock market crash or rapid inflation, but the problem is that the value of the dollar goes up when the world is in financial crisis, not down. Still, the gold/Dow ratio is pretty high by historical standards, and the silver/gold ratio is similarly intriguing, so despite the run-ups of the past few years, there might be some gains to be made.

And McD, despite our very long-winded argument in that other thread, brings up a good point here. I've read far too many stories about "holding companies" not making good on their promised deliveries of gold/silver/etc. when owners have demanded physical delivery. If you want to invest in metals, I'd suggest making sure you can actually hold them.

EDIT: Well, now he's suggesting the opposite... sonofa****. Here I was trying to make all friendly and such.

[GibbsFactor]

I have my gold stored where I can get to it if needed due to self imposed paranoia. I would recommend a brokerage firm that you can physically visit. After all, if you really need the gold in a pinch, you may have problems getting it. It's the same reason you wouldn't buy shares of gold, what happens if they simply don't pay you? With the actual asset in hand, you have the power and the value.

[Southtown]

If you don't want to store it, you could just invest in funds like GLD or SLV or maybe something like the Vanguard Precious Metals and Mining Fund.

If you want to buy physical bullion, you'll usually find the best prices on Ebay. Using the Bing/Live.com cashback option you can usually buy slightly under spot.

Check out kitco.com and go under the Gold Forums. Plenty of info and advice there on buying and storing bullion. I know Kitco has some sort of bullion "pools" where people buy large quanties of metals and it is stored for you...though I'm not too familiar with all the details.

[TD_washingtonredskins]

Thanks to all...good advice so far!

[McD5]

Thanks to all...good advice so far!

I believe the best paths have been mentioned. Now it is up to you.

The only question you really need to ask yourself is "Do I want to take possession and store this?"

If yes.....you could go the ebay route for example. But you have to paypal, receive it....etc. Some people like doing that. To others, it is a waste of time. Then when you want to sell it.....do an auction....list it....mail it.....etc.

Or you can just buy the gld or slv through your brokerage acct.

[techboy]

Just keep in mind that gold, like all commodities I am aware of, has a negative expected real return.

Over time, gold is expected to keep up with inflation. That's why you will hear gold advocates talk about the price of a men's suit, in that you can buy one with the same amount of gold throughout history. In real (inflation-adjusted terms), that's breaking even.

Don't forget, though, that you will also have costs associated with your gold ownership, such as storage, whether you pay someone else to do it (in the form of an ETF like GLD) or stick it in a safe deposit box yourself.

Zero real minus costs equals negative real returns. Over time, you lose money.

Personally, if I was concerned about inflation, I'd hedge it with stocks (which over long periods tend to include inflation in their pricing) or TIPS, which pay inflation plus a small premium.

[GibbsFactor]

Just keep in mind that gold, like all commodities I am aware of, has a negative expected real return.

Over time, gold is expected to keep up with inflation. That's why you will hear gold advocates talk about the price of a men's suit, in that you can buy one with the same amount of gold throughout history. In real (inflation-adjusted terms), that's breaking even.

Don't forget, though, that you will also have costs associated with your gold ownership, such as storage, whether you pay someone else to do it (in the form of an ETF like GLD) or stick it in a safe deposit box yourself.

Zero real minus costs equals negative real returns. Over time, you lose money.

Personally, if I was concerned about inflation, I'd hedge it with stocks (which over long periods tend to include inflation in their pricing) or TIPS, which pay inflation plus a small premium.

Well, my 10K in 2007 has turned into 15K in 2009. You really can't compare those returns with anything else in this day. Sure, it's not a long term adjustment but in times of economic uncertainty, it's really the best way to keep your cash levels up while everyone else's plummets.

[Hubbs]

Tech, you're generally right. However, this might give you pause:

I honestly mean that "might" part, because, judging by your posts, there's a good chance that you already know this. I'm wondering what you think about it.

[JMS]

Given the unpredictability of investments lately, I've considered investing in precious metals. Does anyone with knowledge have any advice about this? Is it smart? Safe? How would I even get started?

Any advice or input would be great and much appreciated.

Two thoughts...

(1) I don't think you are late. Gold and silver are still good hedges against inflation.

(2) If you are buying gold or silver, don't get caught up on the numismatic con. Folks will tell you American double eagles in good condition are worth more than double eagles in not so good condition, or canadian maple leafs or south african kugarands.... that's all a con....

The only thing you care about is the gold content. Fact is when FDR collected all the gold double eagles and replaced them with paper money back in the 1930's. He didn't melt them down. What he did was crate them up and send them to Europe in exchange for American debt. there are literally millions of uncerculated pristine American double eagles in vaults around the world. The numismatic value ( coin collector value) isn't worth jack. It's the gold which is the investment.

If you are buying gold the only thing you should be paying for is the gold.

[techboy]

Well, my 10K in 2007 has turned into 15K in 2009. You really can't compare those returns with anything else in this day.

Tech, you're generally right. However, this might give you pause:

Neither of those things give me pause, because those are short term fluctuations, and I was talking about long term investment.

I could also have made huge money buying tech stocks and jumping out before the bubble popped, but that doesn't mean I'm loading up on dog.com now.

If you want to get in on the short term jump/big profit action, you need to guess correctly about when to get in and out, and if you can predict the future, save some time and buy lottery tickets.

[Fergasun]

I have some gold in my portfolio, but I'm going to be selling a large chunk of it and the silver I have. I'm not sure we are going to have inflation. If you are worried about hyper-inflation why not buy gold options?

The gold I intend to hold will be held in GTU and CEF (I believe thats 50-50 GLD and SLV?). I have money in GLD and SLV but I just don't trust the paper stuff. Of course if there really is a problem with the Comex (there are rumours, unsure who has been perpetrating those but some intereseting stuff happened last month with physical deliveries, alledgedly)... if there is a problem with physical delivery from the Comex, it would pay off to hold physical; granted holding the physical has a premium (ie. if you put in $1k into GTU you will "own" less gold than going through GLD). I also know that GLD and SLV do some things that were a pita for tax-season; in that they sell some gold and silver every month, these ended up coming up as if I had sold GLD and SLV and was a bit of an accounting fun thing during tax season.

I guess my question to you would be why not buy some type of energy (oil, natural gas, etc.) or food commodities if you are hellbent on buying commodities. If we have inflation those will go up too as well, no?

What's keeping me from holding commodities is that we'll go through another crash cycle; if this is true than cash will become king again... as people will liquidated their stocks, bonds, and assets to go into cash they can use to pay off debt, pay their mortgage, or buy food/gas.

I think you are late... seems like all these people wanting to get into gold are contrary indicators; but so is seeing a Cash for Gold commercial...

[Hubbs]

Erm... that's a 100-year graph, tech. Why do you say that it's short-term?

[techboy]

Erm... that's a 100-year graph, tech. Why do you say that it's short-term?

It's a 100 year graph showing several short-term bursts in value, followed by long periods of basically nothing. It shows that if you can predict the future, you can make a lot of money by buying gold before one of those spikes, and selling before it goes back down.

Me, I can't predict the future, so I look at gold's long term expected return, which is negative, and I say no thanks.

An argument can be made for a small sliver of commodities as a part of a larger portfolio (some believe that commodities can improve risk adjusted return by mixing in their low correlations with stocks and bonds), but there's no reason even in that case to focus exclusively on just one commodity.