1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

Question about investing in gold

Discussion in 'Economics and Financials' started by KB21, Nov 3, 2009.

  1. KB21

    KB21 Almost Never Wrong Club Member

    24,029
    40,478
    113
    Dec 6, 2007
    I wanted to ask all of you that know alot more about this than I do. What is your thoughts on investing in gold mutual funds or gold etf's?

    I'm looking for something to put some money into to prepare my family and myself for what I feel is the impending collapse of the dollar. I have heard good things about investing in gold, but I don't have a business background.
     
  2. jdang307

    jdang307 Season Ticket Holder Club Member

    39,161
    21,798
    113
    Nov 29, 2007
    San Diego
    Keep in mind historically gold is a horrible inflation hedge. It's a good disaster hedge though. Just to get back to its 1980 price for an oz, gold would have to hit $2230 or more. Yes, If you bought gold in 1980, after adjusting for inflation you would be out 50%.

    Now, you can invest in gold or you can invest in gold companies. So be careful what you are investing in. Lucky for you, I just read a WSJ article on this very topic while on the john at work :D

    http://online.wsj.com/article/SB10001424052748704107204574473662177737546.html
     
    Section126, hof13 and cnc66 like this.
  3. padre31

    padre31 Premium Member Luxury Box

    99,465
    37,345
    0
    Nov 22, 2007
    inching to 100k posts
    To be honest KB, I'm a bit of a metals bug, ETF's are a fine way to invest in metals "but" unlike taking personal holdings of the commodity, you will be subjected to additional risks.

    Such as ETF's do not actually hold the metals they claim to hold.

    As long as one has done the homework and are convinced that the trend is upwards for GLD, then by all means, use it as a safe haven, but keep in mind there are very very few buy and hold investments anymore.

    Is the current, additional rise in the price of GLD due to monetization? Is it due to speculation in one of the last unregulated (largely) markets left being manipulated?

    As for gold mining stocks....:D...that rather misses the point of investing in gold, plus gold mining stocks typically do rather poorly, Couer d' Alaine:

    http://www.coeur.com/

    And try

    www.kitco.com

    or

    www.goldismoney.com

    The GIS forum is a frontier sort of place.
     
  4. Stringer Bell

    Stringer Bell Post Hard, Post Often Club Member

    43,950
    21,540
    113
    Mar 22, 2008
    I have a cash for gold business going right now. Lucrative, especially during a recession.
     
  5. KB21

    KB21 Almost Never Wrong Club Member

    24,029
    40,478
    113
    Dec 6, 2007
    Here is my situation. I am very close to the point where I am going to start doing some moonlighting in acute care facilities and emergency rooms in the area. When this happens, I will essentially double my current salary. I am wanting to save a good percentage of the excess money I will be making, and I am losing faith in the banking system and the value of the dollar.

    One of my fellow residents recommended getting a mutual fund and putting it into a Roth account, but I am not up on the lingo of how that works.

    One of the things I have heard in favor of gold is that the price will continue to go up because the demand will stay high and the supply will always be limited.

    The first thing I am going to do with the extra income is pay off our credit cards and my wife's explorer. Our only debts at that point will be our house and my school loans which I have not started paying on yet. After that, I want to save a good percentage of it, but I want it to be in something that is safe. Any suggestions?
     
  6. HolliFinFan

    HolliFinFan Not a Face Painter Luxury Box

    2,217
    1,480
    113
    Nov 24, 2007
    South Florida
    I don't have near that debt, yet if I were you, I'd find a local investment person. They're everywhere, and don't pay them. I have TSA's and annuities and stocks that are reconsidered every quarter, depending on the market. I, like you, am not a financial person, but in my experience, I have had no problem finding a local person to "help" me. But be smart about it...in some way they're benefiting by investing your money and you should not incur a "service" charge. For example, check your statements. If they don't change from quarter to quarter, your guy or gal is not paying attention. If the floatables don't change, take your business elsewhere. Some will stay constant, but not items like real estate or gold and the like. Doctors and teachers are often noted as the worst at finances because we don't have the time to configure all of the possibilities. A smart investment manager will do this for you. In sum, you need someone accessible to speak to and visit on occasion. Checking the quarterly statements is imperative. Like I said, I am no expert, but this has worked for me.
     
  7. Stringer Bell

    Stringer Bell Post Hard, Post Often Club Member

    43,950
    21,540
    113
    Mar 22, 2008
    Get a financial adviser. Thats really the best advice I can give you. Too many factors go into decisions like yours, and you should really seek advice from a professional.
     
  8. jdang307

    jdang307 Season Ticket Holder Club Member

    39,161
    21,798
    113
    Nov 29, 2007
    San Diego
    I dabble in financial planning (I'm at an investment adviser) and while I don't make the investment decisions I am on the investment committee and the best advice I can tell you is, if you start hearing this from regular people:

    It's usually time to think about getting out. How this works is the experts get in the good investments first, then it starts trickling down, with each level of investor increasing the value. By the time it's trickled down, the experts at the top start getting out. And then the value collapses. That's how it works. That's how it always works.

    Gold, as a buy and hold, is historically a horrible investment. Short term yes, it may provide some good value, but I wouldn't count on allocating a significant portion of your portfolio to it. Think about it, what value does gold have at these prices? It's been pushed way past any inherent value gold has, by what? Speculation. If that word doesn't make you run, I don't know what will.

    I think a small percentage of gold could serve as a good hedge against Obama (oops wrong forum .. j/k yall!). But don't go buying a whole bunch of it. The only thing safe is a fully diversified portfolio. If fears subside over the US system, watch gold drop.
     
  9. texasPHINSfan

    texasPHINSfan New Member

    6,363
    3,740
    0
    Dec 14, 2007
    Bellevue, WA
    keith, i'm a financial advisor, and i'll recommend you go find another advisor local to you and go talk to them - your situation is exactly a case where you'll want a financial advisor.

    i personally don't buy gold, and probably won't unless i see a very good buying opportunity that i can use as a quick speculative flip. it is commonly used as a hedge (albeit poorly) against inflation. gold doesn't pay you a dividend and the opportunity cost is what removes your chances to make money elsewhere. what makes the situation even less attractive in your case is that gold values are topping out now based on people's knee-jerk reactions to the dollar (which, i might add, is not really collapsing, but falling to the real-world levels it was prior to the subprime collapse in 2008). as such, i think it's a little late for the gold party, and if i was an owner of gold, i'd probably sell right now and take some profits off the table.

    if you're interested in capital preservation, might i recommend looking at bonds? The Roth idea is a good one, but your income levels might remove you from eligibility there.

    My first advice to you would be to seek out a financial advisor in your area.
     
  10. Themole

    Themole Season Ticket Holder

    7,873
    1,594
    0
    Jan 4, 2008
    Palatka Fl.

    You might want to consider accumulating as much physical gold and silver as you can afford now. If the economy doesn't recover, more banks fail, inflation kicks in, you will be able to repay those debts by selling off some PMs and repaying them with cheap Federal Reserve Notes. You will have to do your due diligence. I'm in the when "TSHTF" mode and buying 90% junk U.S. coins. As Andrew said; check this site out. There are varied opinions here but ask questions and let them know what you are expecting from PMs. Someone will help you out. https://www.kitcomm.com/forumdisplay.php?f=8 ps. this link is Silver specific, but the main board has a Gold Forum also. Good luck! I think you are being very wise to look into this.
     

Share This Page