Never saw myself buying gold ...
- Richard1580
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Never saw myself buying gold ...
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.)
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."
Re: Never saw myself buying gold ...
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.
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.
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Re: Never saw myself buying gold ...
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.
Re: Never saw myself buying gold ...
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.
70% Global Stocks / 30% Bonds
Re: Never saw myself buying gold ...
Huh? This does not seem like a sound rationale for changing your investment approach.Richard1580 wrote: ↑Thu Feb 11, 2021 6:31 pm There is too much stupidity going on at too many high levels.
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Re: Never saw myself buying gold ...
Okay. Best of luck.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.)
Re: Never saw myself buying gold ...
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?
30% US Stocks | 30% Int Stocks | 40% Bonds
- Richard1580
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Re: Never saw myself buying gold ...
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.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?
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.
"The quest is the quest."
- willthrill81
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Re: Never saw myself buying gold ...
That's why we own the gold and silver that we do. It's, as David Stein puts it, insurance against the unknown.Richard1580 wrote: ↑Thu Feb 11, 2021 6:31 pmI do not view it as an investment. I view it as an insurance policy.
The Sensible Steward
Re: Never saw myself buying gold ...
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.
KlangFool
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.
KlangFool
30% VWENX | 16% VFWAX/VTIAX | 14.5% VTSAX | 19.5% VBTLX | 10% VSIAX/VTMSX/VSMAX | 10% VSIGX| 30% Wellington 50% 3-funds 20% Mini-Larry
- willthrill81
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Re: Never saw myself buying gold ...
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.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?
The Sensible Steward
- Richard1580
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Re: Never saw myself buying gold ...
My paranoia only runs so deep. "I still have faith in the system."
"The quest is the quest."
Re: Never saw myself buying gold ...
When you see stupidity happening, contribute to it moreHippoSir wrote: ↑Thu Feb 11, 2021 6:48 pmHuh? This does not seem like a sound rationale for changing your investment approach.Richard1580 wrote: ↑Thu Feb 11, 2021 6:31 pm There is too much stupidity going on at too many high levels.
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Re: Never saw myself buying gold ...
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.willthrill81 wrote: ↑Thu Feb 11, 2021 7:08 pmIf nothing else, such an allocation has reduced sequence of returns risk for both accumulators and retirees as well as improved SWRs for the latter.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?
Thank you
G.E. Box "All models are wrong, but some are useful."
Re: Never saw myself buying gold ...
If you can't beat 'em....jibantik wrote: ↑Thu Feb 11, 2021 7:16 pmWhen you see stupidity happening, contribute to it moreHippoSir wrote: ↑Thu Feb 11, 2021 6:48 pmHuh? This does not seem like a sound rationale for changing your investment approach.Richard1580 wrote: ↑Thu Feb 11, 2021 6:31 pm There is too much stupidity going on at too many high levels.
Join 'em.
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.
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Re: Never saw myself buying gold ...
C'mon! A bunch of teenagers buy GME and y'all turn into 'preppers' ?
What if there was war or something really serious.
What if there was war or something really serious.
Re: Never saw myself buying gold ...
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.
Re: Never saw myself buying gold ...
For a moment there, I thought you meant 'preppies'.
Between the idea And the reality...Between the motion And the act...Falls the Shadow - T. S. Eliot
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Re: Never saw myself buying gold ...
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.
DFJ: Japan - small cap dividend |
DGS: emerging, small cap dividend |
MOTI: international moat stocks |
IQIN: large cap, developed |
DGRE: emerging, dividend growth |
GWX and FNDC: small cap, developed
- willthrill81
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Re: Never saw myself buying gold ...
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%.qwertyjazz wrote: ↑Thu Feb 11, 2021 7:18 pmI 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.willthrill81 wrote: ↑Thu Feb 11, 2021 7:08 pmIf nothing else, such an allocation has reduced sequence of returns risk for both accumulators and retirees as well as improved SWRs for the latter.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?
Thank you
The Sensible Steward
Re: Never saw myself buying gold ...
Me neither, but I am not a cat though I do fear that cats are taking over the internet.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.
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Re: Never saw myself buying gold ...
Interesting - I did not know it was that lowwillthrill81 wrote: ↑Thu Feb 11, 2021 7:48 pmTMK, 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%.qwertyjazz wrote: ↑Thu Feb 11, 2021 7:18 pmI 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.willthrill81 wrote: ↑Thu Feb 11, 2021 7:08 pmIf nothing else, such an allocation has reduced sequence of returns risk for both accumulators and retirees as well as improved SWRs for the latter.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?
Thank you
Thank you
G.E. Box "All models are wrong, but some are useful."
Re: Never saw myself buying gold ...
There's also SGOL / BAR at 17bp.
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Re: Never saw myself buying gold ...
Insurance for what? Last March when everything was tanking gold tanked as well.Richard1580 wrote: ↑Thu Feb 11, 2021 6:31 pm I do not view it as an investment. I view it as an insurance policy.
Re: Never saw myself buying gold ...
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.
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.
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham
Re: Never saw myself buying gold ...
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.
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 ...
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.Richard1580 wrote: ↑Thu Feb 11, 2021 6:31 pm There is too much stupidity going on at too many high levels.
Re: Never saw myself buying gold ...
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.jpmorganfunds wrote: ↑Thu Feb 11, 2021 8:19 pmInsurance for what? Last March when everything was tanking gold tanked as well.Richard1580 wrote: ↑Thu Feb 11, 2021 6:31 pm I do not view it as an investment. I view it as an insurance policy.
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."
Re: Never saw myself buying gold ...
I have also seen some premiums on physical buyback lately that actually exceed the premiums I paid over a decade ago.willthrill81 wrote: ↑Thu Feb 11, 2021 7:48 pmTMK, 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%.qwertyjazz wrote: ↑Thu Feb 11, 2021 7:18 pmI 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.willthrill81 wrote: ↑Thu Feb 11, 2021 7:08 pmIf nothing else, such an allocation has reduced sequence of returns risk for both accumulators and retirees as well as improved SWRs for the latter.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?
Thank you
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 ...
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.
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe
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Re: Never saw myself buying gold ...
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?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.
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe
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Re: Never saw myself buying gold ...
+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.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.
Re: Never saw myself buying gold ...
Um, not really.jpmorganfunds wrote: ↑Thu Feb 11, 2021 8:19 pmInsurance for what? Last March when everything was tanking gold tanked as well.Richard1580 wrote: ↑Thu Feb 11, 2021 6:31 pm I do not view it as an investment. I view it as an insurance policy.
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 ...
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.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.
30% US Stocks | 30% Int Stocks | 40% Bonds
Re: Never saw myself buying gold ...
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.
I don't really see this ending until the money stops flowing.
Re: Never saw myself buying gold ...
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 ...
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.
The Sensible Steward
Re: Never saw myself buying gold ...
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.
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.
Re: Never saw myself buying gold ...
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?
Re: Never saw myself buying gold ...
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?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?
30% US Stocks | 30% Int Stocks | 40% Bonds
Re: Never saw myself buying gold ...
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.
Re: Never saw myself buying gold ...
So Crypto is being viewed as comparable to Gold by some. Good to know.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.
Re: Never saw myself buying gold ...
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.Ocean77 wrote: ↑Thu Feb 11, 2021 11:11 pmIf 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?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?
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Re: Never saw myself buying gold ...
Do you have 30-40 years for the market to recognize those values?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.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
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Re: Never saw myself buying gold ...
'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.
The Sensible Steward
Re: Never saw myself buying gold ...
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.megabad wrote: ↑Thu Feb 11, 2021 11:25 pmI 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.Ocean77 wrote: ↑Thu Feb 11, 2021 11:11 pmIf 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?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?
30% US Stocks | 30% Int Stocks | 40% Bonds
Re: Never saw myself buying gold ...
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.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.
Re: Never saw myself buying gold ...
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.megabad wrote: ↑Fri Feb 12, 2021 12:34 amI 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.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.
30% US Stocks | 30% Int Stocks | 40% Bonds
Re: Never saw myself buying gold ...
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.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.
Amateur Self-Taught Senior Macro Strategist