Never saw myself buying gold ...

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Richard1580
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Never saw myself buying gold ...

Post by Richard1580 »

I never thought I would see this day. I am buying into gold. Personally, I think gold is a suck investment. It is too volatile, and physical gold (I am buying IAU) pays out nothing. Nope. Not for me. Never doing it.

Until today. I do not view it as an investment. I view it as an insurance policy. There is too much stupidity going on at too many high levels. I plan on increasing my allocation to gold each month until I hit about 7.5% of my AA at year’s end.

I am REALLY hoping it turns out to be a suck investment. I can live with that.

On the other hand ...

(BTW, before people turn this into some stupid Mad Max/post apocalypse scenario - that is not what I am worried about.)
"The quest is the quest."
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Re: Never saw myself buying gold ...

Post by jaj2276 »

I never saw myself buying cryptocurrency but guess what I did this past week?

I have 10% allocation to PMs as part of my asset allocation. I've "finally" come around to taking that 10% allocation and splitting it up evenly among gold, silver, and crypto.

Crazy times indeed.
Last edited by jaj2276 on Thu Feb 11, 2021 6:55 pm, edited 1 time in total.
Johm221122
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Re: Never saw myself buying gold ...

Post by Johm221122 »

As an investment exactly what do expect to accomplish in best case scenario with your gold holdings of 7.5% of portfolio?
Last edited by Johm221122 on Thu Feb 11, 2021 6:42 pm, edited 1 time in total.
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Re: Never saw myself buying gold ...

Post by z3r0c00l »

Buying of gold due to political beliefs or fears is absolutely a mistake and you seem to know this already by describing how bad gold is as an investment. What do you think it will insure you against exactly? I imagine you already know how the gold coin fear mongering thing turned out for folks circa 2008 - 16.
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Re: Never saw myself buying gold ...

Post by HippoSir »

Richard1580 wrote: Thu Feb 11, 2021 6:31 pm There is too much stupidity going on at too many high levels.
Huh? This does not seem like a sound rationale for changing your investment approach.
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Re: Never saw myself buying gold ...

Post by Trader Joe »

Richard1580 wrote: Thu Feb 11, 2021 6:31 pm I never thought I would see this day. I am buying into gold. Personally, I think gold is a suck investment. It is too volatile, and physical gold (I am buying IAU) pays out nothing. Nope. Not for me. Never doing it.

Until today. I do not view it as an investment. I view it as an insurance policy. There is too much stupidity going on at too many high levels. I plan on increasing my allocation to gold each month until I hit about 7.5% of my AA at year’s end.

I am REALLY hoping it turns out to be a suck investment. I can live with that.

On the other hand ...

(BTW, before people turn this into some stupid Mad Max/post apocalypse scenario - that is not what I am worried about.)
Okay. Best of luck.
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Re: Never saw myself buying gold ...

Post by Ocean77 »

Same here. I never considered gold before. Over the long run, it just keeps up with inflation, the real return is zero. But well that sounds pretty good now in comparison to bonds and cash, as both will have a real return that is negative. And zero is better than negative, right?
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Richard1580
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Re: Never saw myself buying gold ...

Post by Richard1580 »

Johm221122 wrote: Thu Feb 11, 2021 6:39 pm As an investment exactly what do expect to accomplish in best case scenario with your gold holdings of 7.5% of portfolio?
Absolutely nothing, except be a drag on my total return. Of course that is also what my house and auto insurance policies are - unless the house burns down or I get in a bad accident. :-)

Right now, I just do not have a warm fuzzy feeling about where the markets are going. Carving out a small percentage of my holdings as "insurance" is something I can live with. A few years ago I made a post in Personal Investing asking for feedback on my AA. Basically, I was in a position where I did not expect to ever have to touch my retirement savings. Someone (I think it may have been Klang Fool) asked "If you have won the game, why are you still playing?" It was an excellent question.

At this point I am just playing defense.
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Re: Never saw myself buying gold ...

Post by willthrill81 »

Richard1580 wrote: Thu Feb 11, 2021 6:31 pmI do not view it as an investment. I view it as an insurance policy.
That's why we own the gold and silver that we do. It's, as David Stein puts it, insurance against the unknown.
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Re: Never saw myself buying gold ...

Post by KlangFool »

OP,

Come on. You are not paranoid enough. You are buying paper gold. I only buy physical Gold/Silver that I can hold in my hand.


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Re: Never saw myself buying gold ...

Post by willthrill81 »

Johm221122 wrote: Thu Feb 11, 2021 6:39 pm As an investment exactly what do expect to accomplish in best case scenario with your gold holdings of 7.5% of portfolio?
If nothing else, such an allocation has reduced sequence of returns risk for both accumulators and retirees as well as improved SWRs for the latter.
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Re: Never saw myself buying gold ...

Post by Richard1580 »

KlangFool wrote: Thu Feb 11, 2021 7:07 pm Come on. You are not paranoid enough. You are buying paper gold. I only buy physical Gold/Silver that I can hold in my hand.
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Re: Never saw myself buying gold ...

Post by jibantik »

HippoSir wrote: Thu Feb 11, 2021 6:48 pm
Richard1580 wrote: Thu Feb 11, 2021 6:31 pm There is too much stupidity going on at too many high levels.
Huh? This does not seem like a sound rationale for changing your investment approach.
When you see stupidity happening, contribute to it more :mrgreen:
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Re: Never saw myself buying gold ...

Post by qwertyjazz »

willthrill81 wrote: Thu Feb 11, 2021 7:08 pm
Johm221122 wrote: Thu Feb 11, 2021 6:39 pm As an investment exactly what do expect to accomplish in best case scenario with your gold holdings of 7.5% of portfolio?
If nothing else, such an allocation has reduced sequence of returns risk for both accumulators and retirees as well as improved SWRs for the latter.
I understand the debates about that being due to historical differences. But the debate I am not sure is that these analyses do not include transaction costs. Are transaction costs of buying and selling precious materials as big of a deal as they seem from the outside? Have these analyses adequately included the costs of buying and selling? There is also the cost of holding which is so individualized that I am not sure of how to even conceptualize.

Thank you
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Re: Never saw myself buying gold ...

Post by 000 »

jibantik wrote: Thu Feb 11, 2021 7:16 pm
HippoSir wrote: Thu Feb 11, 2021 6:48 pm
Richard1580 wrote: Thu Feb 11, 2021 6:31 pm There is too much stupidity going on at too many high levels.
Huh? This does not seem like a sound rationale for changing your investment approach.
When you see stupidity happening, contribute to it more :mrgreen:
If you can't beat 'em....

Join 'em. :twisted:

P.S. OP, I don't think is a crazy move. I am wondering more and more though if cryptos will replace some of gold's functionality.
New Providence
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Re: Never saw myself buying gold ...

Post by New Providence »

C'mon! A bunch of teenagers buy GME and y'all turn into 'preppers' ?

What if there was war or something really serious.
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Re: Never saw myself buying gold ...

Post by rockstar »

I have 1% of my portfolio in GLD, and it's down 6% since I bought it. Maybe in a decade this will give me a good return. But I have my doubts.
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Re: Never saw myself buying gold ...

Post by Pu239 »

For a moment there, I thought you meant 'preppies'. :happy
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Re: Never saw myself buying gold ...

Post by jhsu802701 »

My hedge against hyperinflation or other scenarios involving the collapse of the US dollar is international stock ETFs. But that's not why I bought them. International stocks are undervalued, especially Japan and emerging markets. The low valuations combined with the undervalued currencies make international stocks today as undervalued as US stocks were in the 1930s and 1940s.
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Re: Never saw myself buying gold ...

Post by willthrill81 »

qwertyjazz wrote: Thu Feb 11, 2021 7:18 pm
willthrill81 wrote: Thu Feb 11, 2021 7:08 pm
Johm221122 wrote: Thu Feb 11, 2021 6:39 pm As an investment exactly what do expect to accomplish in best case scenario with your gold holdings of 7.5% of portfolio?
If nothing else, such an allocation has reduced sequence of returns risk for both accumulators and retirees as well as improved SWRs for the latter.
I understand the debates about that being due to historical differences. But the debate I am not sure is that these analyses do not include transaction costs. Are transaction costs of buying and selling precious materials as big of a deal as they seem from the outside? Have these analyses adequately included the costs of buying and selling? There is also the cost of holding which is so individualized that I am not sure of how to even conceptualize.

Thank you
TMK, the trading costs of any asset, be it gold, stocks, bonds, etc., have not been included in any of the SWR studies I've seen. The expense ratio of several gold ETFs is lower today than probably any stock mutual funds were just a couple of decades ago. The ER of IAU (a popular gold ETF) is the same as AVUV (a popular SCV ETF that I own), .25%.
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Re: Never saw myself buying gold ...

Post by livesoft »

Richard1580 wrote: Thu Feb 11, 2021 7:03 pmRight now, I just do not have a warm fuzzy feeling about where the markets are going.
Me neither, but I am not a cat though I do fear that cats are taking over the internet.
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Re: Never saw myself buying gold ...

Post by qwertyjazz »

willthrill81 wrote: Thu Feb 11, 2021 7:48 pm
qwertyjazz wrote: Thu Feb 11, 2021 7:18 pm
willthrill81 wrote: Thu Feb 11, 2021 7:08 pm
Johm221122 wrote: Thu Feb 11, 2021 6:39 pm As an investment exactly what do expect to accomplish in best case scenario with your gold holdings of 7.5% of portfolio?
If nothing else, such an allocation has reduced sequence of returns risk for both accumulators and retirees as well as improved SWRs for the latter.
I understand the debates about that being due to historical differences. But the debate I am not sure is that these analyses do not include transaction costs. Are transaction costs of buying and selling precious materials as big of a deal as they seem from the outside? Have these analyses adequately included the costs of buying and selling? There is also the cost of holding which is so individualized that I am not sure of how to even conceptualize.

Thank you
TMK, the trading costs of any asset, be it gold, stocks, bonds, etc., have not been included in any of the SWR studies I've seen. The expense ratio of several gold ETFs is lower today than probably any stock mutual funds were just a couple of decades ago. The ER of IAU (a popular gold ETF) is the same as AVUV (a popular SCV ETF that I own), .25%.
Interesting - I did not know it was that low
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Re: Never saw myself buying gold ...

Post by 000 »

There's also SGOL / BAR at 17bp.
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Re: Never saw myself buying gold ...

Post by DB2 »

KlangFool wrote: Thu Feb 11, 2021 7:07 pm OP,

Come on. You are not paranoid enough. You are buying paper gold. I only buy physical Gold/Silver that I can hold in my hand.


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VanEck OUNZ backs the paper buy physical gold...you can even get delivery on it. Sprott does this too I think.
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Re: Never saw myself buying gold ...

Post by jpmorganfunds »

Richard1580 wrote: Thu Feb 11, 2021 6:31 pm I do not view it as an investment. I view it as an insurance policy.
Insurance for what? Last March when everything was tanking gold tanked as well.
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Re: Never saw myself buying gold ...

Post by JoMoney »

If I bought gold (I'm not) it would be physical. In the type of 'apocalyptic' scenarios people suggest owning for, pieces of paper or digital claims on gold that is supposed to be in a hole somewhere are even more problematic than other paper securities and currencies.
If the government banned gold ownership like in the past, paper securities would be first to get liquidated, and in the past there was exemptions for certain types of collectibles, jewelry and the like. If you have something you might actually use or enjoy as decoration at least you're getting that benefit in lieu of monetary 'dividends' or interest.
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Re: Never saw myself buying gold ...

Post by usagi »

You might be better off, in some respects with gold mining stock(s). Take a look at Newmont Mining(NEW) Barrick Gold (GOLD) (note I own both) for core diversification purposes (note I also like to get paid, hence these two pay dividends and have share holder friendly boards).

A far more volatile option, that tracks the actual metal price movements is:

Agnico-Eagle Mines (AEM)

It has a certain long term appeal and also pays a dividend though its financial strength is below the other two I listed.

If you want something more speculative (yet on the more conservative side of the house) look at Royal Gold (RGLD) or Kinross Gold Corporation(KGC).

I do not own shares in AEM or RGLD, or KGC but may take a stake when/if I sell some lucrative positions.

I should point out, I view all of this as portfolio insurance, yet I don't want it to be dead money, hence the dividends. And the bulk of my assets are in passively managed index funds.
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Re: Never saw myself buying gold ...

Post by UpperNwGuy »

Richard1580 wrote: Thu Feb 11, 2021 6:31 pm There is too much stupidity going on at too many high levels.
Is this some kind of obliquely phrased reference to politics? If so, it's not a good reason to change your investment strategy. If it's something else, please enlighten us.
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Re: Never saw myself buying gold ...

Post by Willmunny »

jpmorganfunds wrote: Thu Feb 11, 2021 8:19 pm
Richard1580 wrote: Thu Feb 11, 2021 6:31 pm I do not view it as an investment. I view it as an insurance policy.
Insurance for what? Last March when everything was tanking gold tanked as well.
Gold rose from roughly $1500 per ounce in early January 2020, hit a bottom of around $1485 in mid to late March 2020, and went on to roughly $2000 per ounce by August 2020. It finished even or slightly positive for the month of March 2020. Yes, there were a couple weeks of price declines in mid-March when equities were falling much faster, but I would envision that was likely investors rebalancing from an asset that was actually up for the year (gold) into equities which dropped way too much in price at that time (they were on sale). Gold may not do well in the future, but I wish I had bought some in January 2020 and had it available in March 2020 to sell in exchange for equities.

Even if one bought gold at the pre-COVID 2020 high on March 6 and did not sell, he or she would have been back even in a little more than 30 days.

I don't call this "tanking."
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Re: Never saw myself buying gold ...

Post by ohboy! »

willthrill81 wrote: Thu Feb 11, 2021 7:48 pm
qwertyjazz wrote: Thu Feb 11, 2021 7:18 pm
willthrill81 wrote: Thu Feb 11, 2021 7:08 pm
Johm221122 wrote: Thu Feb 11, 2021 6:39 pm As an investment exactly what do expect to accomplish in best case scenario with your gold holdings of 7.5% of portfolio?
If nothing else, such an allocation has reduced sequence of returns risk for both accumulators and retirees as well as improved SWRs for the latter.
I understand the debates about that being due to historical differences. But the debate I am not sure is that these analyses do not include transaction costs. Are transaction costs of buying and selling precious materials as big of a deal as they seem from the outside? Have these analyses adequately included the costs of buying and selling? There is also the cost of holding which is so individualized that I am not sure of how to even conceptualize.

Thank you
TMK, the trading costs of any asset, be it gold, stocks, bonds, etc., have not been included in any of the SWR studies I've seen. The expense ratio of several gold ETFs is lower today than probably any stock mutual funds were just a couple of decades ago. The ER of IAU (a popular gold ETF) is the same as AVUV (a popular SCV ETF that I own), .25%.
I have also seen some premiums on physical buyback lately that actually exceed the premiums I paid over a decade ago.

Thanks for your posts about PMs statistically helping SWR. I remember one of my first posts ever here I included my PM allocation and was practically shunned right off the site. I don’t count it anymore or track the value but feel it is some sort of insurance policy I hold if the need ever arises.
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Re: Never saw myself buying gold ...

Post by Noobvestor »

I don't really object to gold or crypto, just (1) be careful buying high, and (2) be careful with things that have no known target value. My brother bought crypto a while back and he's up, and I told him if he could give me a fundamental reason it should go up, I'd buy. He couldn't. So he may do really well with it, but I'm staying out unless someone demonstrates to me a reason it should hold (or increase in) value.
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Re: Never saw myself buying gold ...

Post by Noobvestor »

jhsu802701 wrote: Thu Feb 11, 2021 7:40 pm My hedge against hyperinflation or other scenarios involving the collapse of the US dollar is international stock ETFs. But that's not why I bought them. International stocks are undervalued, especially Japan and emerging markets. The low valuations combined with the undervalued currencies make international stocks today as undervalued as US stocks were in the 1930s and 1940s.
Unless the US government defaults, Series I savings bonds are a good option (TIPS too, but less appealing yields). I don't actually know how coupled national and global inflation were in the 70s, but I always figured there was some correlation. Did international stocks protect people then?
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Re: Never saw myself buying gold ...

Post by averagedude »

jhsu802701 wrote: Thu Feb 11, 2021 7:40 pm My hedge against hyperinflation or other scenarios involving the collapse of the US dollar is international stock ETFs. But that's not why I bought them. International stocks are undervalued, especially Japan and emerging markets. The low valuations combined with the undervalued currencies make international stocks today as undervalued as US stocks were in the 1930s and 1940s.
+1. What baffles me is that some investors, who have 100% of their equities in US stocks, who are concerned about inflation and high valuations, are looking at other asset classes to invest in, are completely ignoring International stocks, which can be a hedge to a falling dollar and they also have lower valuations. Not to mention that this asset class has a very long history of outstanding positive real returns and dividend income, unlike some of the asset classes that other investors are piling into. It just makes sense that these types of investors should look at International stocks first, before considering other asset classes to invest in.
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Re: Never saw myself buying gold ...

Post by JayDee37 »

jpmorganfunds wrote: Thu Feb 11, 2021 8:19 pm
Richard1580 wrote: Thu Feb 11, 2021 6:31 pm I do not view it as an investment. I view it as an insurance policy.
Insurance for what? Last March when everything was tanking gold tanked as well.
Um, not really.

Last year, US stock (VTI) hit its low on March 23, at -32% for the year.
GLDM (gold-backed ETF) hit its low on March 19, at -4%.
US bonds hit their low on March 18, at -5%

GLDM and US bonds were both back into positive territory for the year on March 23, the day VTI hit its low.

VTI was back in positive territory for the year around July 29. On July 29, GLDM was +29% for the year. US bonds were up 7.3%.

On Dec 31, 2020, VTI was +20% for the year; US bonds were +7.2%; GLDM was +24%.
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Re: Never saw myself buying gold ...

Post by Ocean77 »

averagedude wrote: Thu Feb 11, 2021 9:12 pm It just makes sense that these types of investors should look at International stocks first, before considering other asset classes to invest in.
I fully agree. But what comes after they do? I.e. my equity holdings has already been 50% US and 50% international for quite some time. I see no need to change anything here. My concern is with the other part of the portfolio, the one that is not in stocks. I used to have that in US treasuries. But I'm quite concerned with that now. A good part of that is in TIPS which should help, but the real return of that after taxes is probably still negative.
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Re: Never saw myself buying gold ...

Post by sabtastic »

I think the concern you feel is watching too many dollars chasing too few assets. I'm somewhat of a gold bug myself so this is a bit biased, but I think you could do a lot worse than buying IAU. I am amazed to see some of the creative assets that are being conjured up right now (warning: link plays a video). There is no limit to this; are moon rocks next?

I don't really see this ending until the money stops flowing.
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Re: Never saw myself buying gold ...

Post by Carguy85 »

How/when would your “insurance policy” be implemented? In case USD crashes and becomes worthless? Curious of your plan to implement.
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Re: Never saw myself buying gold ...

Post by willthrill81 »

Carguy85 wrote: Thu Feb 11, 2021 10:16 pm How/when would your “insurance policy” be implemented?
You could do what many in the past have done: use your precious metals to get from wherever you are to where the disaster of whatever sort isn't.

Apart from that, if there are major financial woes that result in fiat currencies losing much (or all) of their value, 'hard' assets like gold, real estate, etc. would seem very likely to increase in value significantly. These could then be sold as needed in either a barter system, in return for a new currency, etc.
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Re: Never saw myself buying gold ...

Post by pwill112 »

I am curious if you bought physical gold and the world went bad what would you do with physical gold?

For example, how could you trade it for food or something else you needed. I know a trade could happen but this seems a very short lived strategy.
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Re: Never saw myself buying gold ...

Post by megabad »

It is a poor investment but an even worse insurance policy. At least as an investment it has some intrinsic value. Gold has practical material uses. I don’t think it’s value as a product will likely ever be zero. It’s value as insurance is likely close to that. There is nothing about an investment in gold that protects or guarantees anything. Insurance provides guaranteed protection against something. What guaranteed protection does IAU provide?
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Re: Never saw myself buying gold ...

Post by Ocean77 »

megabad wrote: Thu Feb 11, 2021 11:03 pm It is a poor investment but an even worse insurance policy. At least as an investment it has some intrinsic value. Gold has practical material uses. I don’t think it’s value as a product will likely ever be zero. It’s value as insurance is likely close to that. There is nothing about an investment in gold that protects or guarantees anything. Insurance provides guaranteed protection against something. What guaranteed protection does IAU provide?
If I would have just stocks and gold, then what you are writing may well be a good description of an "investment" into cash or bonds ("poor investment and even worse insurance policy"). Why would I trade the gold for either of these? What guaranteed protection would I have that the cash (or proceeds from the bonds) would still buy the things I need in a decade or two?
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Re: Never saw myself buying gold ...

Post by 000 »

The bearish responses to this thread reassure me that we are still very early in the cycle for precious metals and maybe cryptos. Currencies and stores of value serve a human need. Their viability depends on the viability of the shared belief in them, just like cash or any investment except something you can consume yourself.
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Re: Never saw myself buying gold ...

Post by ohboy! »

Noobvestor wrote: Thu Feb 11, 2021 9:09 pm I don't really object to gold or crypto, just (1) be careful buying high, and (2) be careful with things that have no known target value. My brother bought crypto a while back and he's up, and I told him if he could give me a fundamental reason it should go up, I'd buy. He couldn't. So he may do really well with it, but I'm staying out unless someone demonstrates to me a reason it should hold (or increase in) value.
So Crypto is being viewed as comparable to Gold by some. Good to know.
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Re: Never saw myself buying gold ...

Post by megabad »

Ocean77 wrote: Thu Feb 11, 2021 11:11 pm
megabad wrote: Thu Feb 11, 2021 11:03 pm It is a poor investment but an even worse insurance policy. At least as an investment it has some intrinsic value. Gold has practical material uses. I don’t think it’s value as a product will likely ever be zero. It’s value as insurance is likely close to that. There is nothing about an investment in gold that protects or guarantees anything. Insurance provides guaranteed protection against something. What guaranteed protection does IAU provide?
If I would have just stocks and gold, then what you are writing may well be a good description of an "investment" into cash or bonds ("poor investment and even worse insurance policy"). Why would I trade the gold for either of these? What guaranteed protection would I have that the cash (or proceeds from the bonds) would still buy the things I need in a decade or two?
I can’t tell if this is a rhetorical question or not? Sounds like you agree with me? Cash and gold are not insurance. Totally agree.
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Re: Never saw myself buying gold ...

Post by Grt2bOutdoors »

jhsu802701 wrote: Thu Feb 11, 2021 7:40 pm My hedge against hyperinflation or other scenarios involving the collapse of the US dollar is international stock ETFs. But that's not why I bought them. International stocks are undervalued, especially Japan and emerging markets. The low valuations combined with the undervalued currencies make international stocks today as undervalued as US stocks were in the 1930s and 1940s.
Do you have 30-40 years for the market to recognize those values?
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willthrill81
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Re: Never saw myself buying gold ...

Post by willthrill81 »

megabad wrote: Thu Feb 11, 2021 11:03 pmInsurance provides guaranteed protection against something.
'Insurance' as the term that myself and others have used is only metaphorical and not literal. 'Hedge' would probably be a more technically appropriate term.
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Ocean77
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Re: Never saw myself buying gold ...

Post by Ocean77 »

megabad wrote: Thu Feb 11, 2021 11:25 pm
Ocean77 wrote: Thu Feb 11, 2021 11:11 pm
megabad wrote: Thu Feb 11, 2021 11:03 pm It is a poor investment but an even worse insurance policy. At least as an investment it has some intrinsic value. Gold has practical material uses. I don’t think it’s value as a product will likely ever be zero. It’s value as insurance is likely close to that. There is nothing about an investment in gold that protects or guarantees anything. Insurance provides guaranteed protection against something. What guaranteed protection does IAU provide?
If I would have just stocks and gold, then what you are writing may well be a good description of an "investment" into cash or bonds ("poor investment and even worse insurance policy"). Why would I trade the gold for either of these? What guaranteed protection would I have that the cash (or proceeds from the bonds) would still buy the things I need in a decade or two?
I can’t tell if this is a rhetorical question or not? Sounds like you agree with me? Cash and gold are not insurance. Totally agree.
Yes I agreed that I would not consider gold as insurance, and there are no guarantees. But the point was that I would not see this as argument against gold, since there are no other assets either that provide insurance or guarantees. Gold does have something that cash or bonds do not have: a history of keeping up with inflation over centuries.
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Re: Never saw myself buying gold ...

Post by megabad »

Ocean77 wrote: Fri Feb 12, 2021 12:03 am Yes I agreed that I would not consider gold as insurance, and there are no guarantees. But the point was that I would not see this as argument against gold, since there are no other assets either that provide insurance or guarantees. Gold does have something that cash or bonds do not have: a history of keeping up with inflation over centuries.
I guess theoretically you are right, there are no guarantees and a meteor could kill us all tomorrow. However, it is a bit of a stretch to say that there are no other assets that provide insurance or guarantees. There is a multi trillion dollar insurance industry. There are government backed guarantees as well. There are countless products that offer what I would call guarantees. My point was simply that you shouldn’t buy gold expecting a guarantee of anything. There is nothing special about gold to me. In fact, I find it generally clashes with my outfits. I would much rather wear an I-bond certificate around my neck.
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Re: Never saw myself buying gold ...

Post by Ocean77 »

megabad wrote: Fri Feb 12, 2021 12:34 am
Ocean77 wrote: Fri Feb 12, 2021 12:03 am Yes I agreed that I would not consider gold as insurance, and there are no guarantees. But the point was that I would not see this as argument against gold, since there are no other assets either that provide insurance or guarantees. Gold does have something that cash or bonds do not have: a history of keeping up with inflation over centuries.
I guess theoretically you are right, there are no guarantees and a meteor could kill us all tomorrow. However, it is a bit of a stretch to say that there are no other assets that provide insurance or guarantees. There is a multi trillion dollar insurance industry. There are government backed guarantees as well. There are countless products that offer what I would call guarantees. My point was simply that you shouldn’t buy gold expecting a guarantee of anything. There is nothing special about gold to me. In fact, I find it generally clashes with my outfits. I would much rather wear an I-bond certificate around my neck.
Yeah I agree, I bonds are probably as close to a guaranteed thing as it gets. But then again those I-Bond Certificates have that gold background color, right? So they may still clash with your outfit. :D
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Re: Never saw myself buying gold ...

Post by Forester »

JoMoney wrote: Thu Feb 11, 2021 8:24 pm If I bought gold (I'm not) it would be physical. In the type of 'apocalyptic' scenarios people suggest owning for, pieces of paper or digital claims on gold that is supposed to be in a hole somewhere are even more problematic than other paper securities and currencies.
If the government banned gold ownership like in the past, paper securities would be first to get liquidated, and in the past there was exemptions for certain types of collectibles, jewelry and the like. If you have something you might actually use or enjoy as decoration at least you're getting that benefit in lieu of monetary 'dividends' or interest.
Stocks and bonds could be cut in half in real terms inside a decade, and society, the modern financial system would still function just fine. This is an apocalyptic scenario of sorts, and gold could be the best asset of the three for a while.
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