How much Gold do you own and why?

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suemarkp
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Re: How much Gold do you own and why?

Post by suemarkp »

I have about 8% in physical gold, platinum, and silver. It was 5% and has grown to 8. I would like it to be 10%. My average purchase price is $1325 for gold. Sell value today is a bit over $1800.

I treat it as a currency hedge. Im in the US, so i didnt really see another country currency i would want to hold that i was satisfied would maintain its value better than the dollar. Gold is the universal currency. Changing currency from one type to another costs money, whether dollars to euros or dollars to gold. With gold you usually pay the premium when you buy it, not when you sell it. Premiums now are quite high, so im not buying unless the price comes way down.

I also watch for the "value" precious metals. Silver was quite cheap compared to gold and platinum was and still is. I may have to hold the pt for quite a few more years until it gets back to a normal price. When that happens, i will exchange it for gold. I dont see this as market timing as it is similar to dont sell your stocks when a large market correction has occurred. Those are buying opportunities.

Not sure why Buffet denigrates gold with having no yield. Berkshire Hathaway doesnt pay dividends either.
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mptfan
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Re: How much Gold do you own and why?

Post by mptfan »

suemarkp wrote: Thu Jul 29, 2021 1:56 pm Not sure why Buffet denigrates gold with having no yield. Berkshire Hathaway doesnt pay dividends either.
The answer is because Berkshire Hathaway owns may companies that generate earnings whereas gold does not.
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Re: How much Gold do you own and why?

Post by suemarkp »

True, but if the buying power of the dollar is going down that gain may not be sufficient. Gold should move higher as your currency deteriorates. How quickly and how badly the dollar will deteriorate no one knows.

Im not here to denigrate holding stocks in companies that produce value, especially necessary items that people need to buy to live. Im just saying there can be value in other things. That is why i want gold to be 10% of my portfolio and not 80%. If gold suddenly becomes 50% of my portfolio then something very bad has happened.
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Somethingwitty92912
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Re: How much Gold do you own and why?

Post by Somethingwitty92912 »

Always passive wrote: Thu Jul 29, 2021 10:33 am I know that gold is a highly controversial investment. There are many opinions, from Buffett's very negative to those that hold 25% following the Permanent Portfolio strategy.
I happen to own a bit less than 5% and wonder if I should not increase it to 10%.
For those that believe in this asset, what is the reason that you believe in it?
I would appreciate your comments!
My wedding band, and my wife’s jewelry collection works out to about 1% of our portfolio. When times are good, I buy her something new.
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quantAndHold
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Re: How much Gold do you own and why?

Post by quantAndHold »

I have a couple of Kruggerands that I inherited and have been too lazy to sell. Other than that, I understand how gold could help in a hyperinflation scenario, but even if I wanted to go to the trouble and expense of owning physical gold (unallocated, paper "gold" seems useless in that scenario), I wouldn't think holding more than 5% of my portfolio would be necessary.
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gwe67
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Re: How much Gold do you own and why?

Post by gwe67 »

mptfan wrote: Thu Jul 29, 2021 1:33 pm
bigskyguy wrote: Thu Jul 29, 2021 1:27 pmThis is available should we experience a true national economic/political catastrophe (true hyperinflation) and needed to relocate to be with family in Western Europe.
If the stuff really hit the fan and society broke down, I would rather have a store of guns and ammunition than a store of gold. I certainly wouldn't want to be passing out gold coins or gold bars, that would put a target on my back.
In a true doomsday scenario, I would just need a small combination of brass/lead because that is not a world I would want to live in.
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nigel_ht
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Re: How much Gold do you own and why?

Post by nigel_ht »

bigskyguy wrote: Thu Jul 29, 2021 1:27 pm 3% of a portfolio, and we are well into the withdrawal phase of our investing lives. This is available should we experience a true national economic/political catastrophe (true hyperinflation) and needed to relocate to be with family in Western Europe. We live within 2 hours of the northern US border. As one who has lived in unstable places in my younger years (Peru, Ethiopia), stability is not inevitable. As Hemingway wrote in the Sun also Rises, bankruptcy (and other disasters) can and does occur gradually, then suddenly. Having 3% of our portfolio in an asset that we have in our possession and is recognized worldwide as a physical store of value (as opposed to crypto or fiat currency) is nothing more than insurance. We are invested in gold not for growth, but for security (similar to our 3% cash equivalent emergency fund). I will admit that I am influenced mightily by Bill Bernstein - advise you read his book "Deep Risk" if you wish to better understand my perspective.

Joe
If your family has personal history with "adverse geopolitical conditions" then this paragraph makes a lot of sense.

For everyone else...not so much. I dunno that I would keep 3% in physical gold but we have a slug of GLD for the same reasons as the Montana resident above. I've thought about retiring to Big Sky but that's like 6 hours to the border.
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Re: How much Gold do you own and why?

Post by nigel_ht »

mptfan wrote: Thu Jul 29, 2021 1:33 pm
bigskyguy wrote: Thu Jul 29, 2021 1:27 pmThis is available should we experience a true national economic/political catastrophe (true hyperinflation) and needed to relocate to be with family in Western Europe.
If the stuff really hit the fan and society broke down, I would rather have a store of guns and ammunition than a store of gold. I certainly wouldn't want to be passing out gold coins or gold bars, that would put a target on my back.
The gold is for the mounties/cbsa officers to let you pass or someone to smuggle you across.

If your portfolio is large enough then blowing a chunk on a 2nd citizenship isn't cost prohibitive. You'd have to be in the UHNW category unless you happen to already hold dual citizenship somewhere.
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Always passive
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Re: How much Gold do you own and why?

Post by Always passive »

I wonder why so few comments on diversification. Based on Portfolio Visualizer, since 1972, the annual return of gold has been between 7-8% with zero correlation to the equity market. If you just forget that we are talking about gold and focus exclusively on the data that I show here, would you not consider gold a potentially attractive asset?
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StormShadow
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Re: How much Gold do you own and why?

Post by StormShadow »

Probably about 1% in precious metals (mostly bullion coin). Satisfies my Scrooge McDuck itch.

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Re: How much Gold do you own and why?

Post by KingRiggs »

Doctor Rhythm wrote: Thu Jul 29, 2021 1:52 pm Reasons to invest in gold (rather than in other securities): fear and politics. Other than the the wedding band in my soap dish and a krugerrand in my underwear drawer, I don’t own gold.

SaucedUp wrote: Thu Jul 29, 2021 1:44 pm
TomatoTomahto wrote: Thu Jul 29, 2021 10:54 am I don’t own physical gold, but I do have a bit of physical silver. I bought it during the most unsure period of early COVID, not as an investment but in case I needed it for swap/barter. It still sits in my safe.
Who barters with precious metals at all? If that was the purpose why not gold?
My Dungeons & Dragons party bartered 500 silver pieces for a +2 mace and shares of VTSAX.
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Re: How much Gold do you own and why?

Post by Wiggums »

retired@50 wrote: Thu Jul 29, 2021 11:46 am This chart from Jeremy Siegel's book "Stocks for the Long Run" sums it up for me.
ETA: To answer the OP's question, I don't own any gold, and the chart below is the reason why.

Image

Regards,
Thank you for posting the chart. I don’t hold any gold.
Last edited by Wiggums on Thu Jul 29, 2021 3:49 pm, edited 1 time in total.
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Always passive
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Re: How much Gold do you own and why?

Post by Always passive »

Wiggums wrote: Thu Jul 29, 2021 3:36 pm
retired@50 wrote: Thu Jul 29, 2021 11:46 am This chart from Jeremy Siegel's book "Stocks for the Long Run" sums it up for me.
ETA: To answer the OP's question, I don't own any gold, and the chart below is the reason why.

Image

Regards,
Thank you for posting the chart.
Nixon left the Gold standard in 1971, therefore it seems to me that its value as part of a portfolio should be looked at since that date. And as I stated earlier, gold’s annual return has been between 7-8% with zero correlation to equities. Would that change your mind?
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Re: How much Gold do you own and why?

Post by Kiter »

A few inherited Krugerrands ,some early silver dollars . Selling gold jewelry/scrap now $2-3000. 00 worth .Just because of price and I have the time to do so
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Re: How much Gold do you own and why?

Post by SouthernInvestor »

I keep gold in my home safe for sentimental reasons -- my grandaddy did.
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David Jay
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Re: How much Gold do you own and why?

Post by David Jay »

Bear906 wrote: Thu Jul 29, 2021 1:30 pmI do set aside all the non-zinc American and Canadian 1-cent coins that come my way, though.
You do know that Canada no longer uses the penny, right?
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Re: How much Gold do you own and why?

Post by calmaniac »

We have about a pound in one oz. coins inherited from father-in-law in safe-deposit. May come in useful for the zombie apocalypse Mad Max end times.

My own smug self finds the concept of owning physical gold ludicrous, but don't see much upside in pushing DW to sell her dad's gold coins. I can see if now: I sell the gold, the next day the zombies come, and then she says "I told you so". :oops:


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Re: How much Gold do you own and why?

Post by vandering »

I worried about currency risk in 2008-2009 despite USD being predominant reserve currency. I thought about Swiss Francs but they're not really gold backed now. I saw all the CBs except ours starting to stockpile gold. I took my 100% stock brokerage balance and multiplied by 10% to estimate how much gold I would buy as insurance. Then I bought 10X that amount of silver. I paid 1027/oz and 16.50/oz respectively. I hope to never need it.
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retired@50
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Re: How much Gold do you own and why?

Post by retired@50 »

Always passive wrote: Thu Jul 29, 2021 3:44 pm
Wiggums wrote: Thu Jul 29, 2021 3:36 pm
retired@50 wrote: Thu Jul 29, 2021 11:46 am This chart from Jeremy Siegel's book "Stocks for the Long Run" sums it up for me.
ETA: To answer the OP's question, I don't own any gold, and the chart below is the reason why.

Image

Regards,
Thank you for posting the chart.
Nixon left the Gold standard in 1971, therefore it seems to me that its value as part of a portfolio should be looked at since that date. And as I stated earlier, gold’s annual return has been between 7-8% with zero correlation to equities. Would that change your mind?
I've seen the results from the early 1970s in charts on portfolio visualizer. Based on the historical performance, it strikes me as an asset that has to be purchased at just the right time, similar to a commodities fund. These kinds of non-correlated assets can be either awesome, or lousy, depending on when you buy. The chart linked below illustrates this point.

See link: Stocks versus Gold from 1980 to 2021, Gold has a CAGR of 2.86%. During the same time frame, Stocks have a CAGR of 11.84%.
https://www.portfoliovisualizer.com/bac ... ion2_2=100

Even the worst stock market timer ever (see link below) earns a pretty fair return when investing in the stock market.
Worst stock market timer: https://awealthofcommonsense.com/2014/0 ... ket-timer/

If holding gold for over 40 years may only triple your money, I'd be concerned that I'd buy in at the wrong time. Certainly now, given the current price.

Regards,
Last edited by retired@50 on Thu Jul 29, 2021 7:10 pm, edited 1 time in total.
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HanSolo
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Re: How much Gold do you own and why?

Post by HanSolo »

I hold about 5% of my portfolio in gold (via funds that hold physical gold, AAAU and CEF).

As for why, one reason is the diversification benefit that the OP mentioned. The following provides another reason:
retired@50 wrote: Thu Jul 29, 2021 11:46 am This chart from Jeremy Siegel's book "Stocks for the Long Run" sums it up for me.
ETA: To answer the OP's question, I don't own any gold, and the chart below is the reason why.
I agree that the chart provides a reason not to diversify one's equity allocation into gold. But if a person has an allocation to cash (or near-cash, such as short-term bonds), other than one's emergency fund, then the same chart provides an equally powerful reason to diversify part of one's cash holdings into gold.

If the above is evidence of an echo chamber, then the opposite view is also an echo chamber.

In the end, it's all just opinion and personal preference. Everyone is entitled to theirs.
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Re: How much Gold do you own and why?

Post by Gort »

Always passive wrote: Thu Jul 29, 2021 10:45 am
Toons wrote: Thu Jul 29, 2021 10:39 am None
Non producing Asset


:happy
If you do not invest in gold, please do not answer. I am looking for reasons to invest and not why not invest.
Consider changing your question to: "If you invest in gold, how much do you own and why?" Not sure if this can done after the fact. I don't own any gold.
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Re: How much Gold do you own and why?

Post by Da5id »

HanSolo wrote: Thu Jul 29, 2021 5:19 pm If the above is evidence of an echo chamber, then the opposite view is also an echo chamber.

In the end, it's all just opinion and personal preference. Everyone is entitled to theirs.
My echo chamber comment had nothing to do with being for or against gold. I don't own it, but whatever floats your boat (though I'm dubious it it is a high percentage). It was the OP saying
If you do not invest in gold, please do not answer. I am looking for reasons to invest and not why not invest.
Regardless of the topic, that is requesting an echo chamber be constructed. Seems like an odd way to get balanced input needed to sort out a question in your mind.
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HanSolo
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Re: How much Gold do you own and why?

Post by HanSolo »

Da5id wrote: Thu Jul 29, 2021 5:45 pm
If you do not invest in gold, please do not answer. I am looking for reasons to invest and not why not invest.
Regardless of the topic, that is requesting an echo chamber be constructed. Seems like an odd way to get balanced input needed to sort out a question in your mind.
That's an illogical assertion. If someone asks people why they like traveling to Macedonia, it's perfectly reasonable to try to get responses from people who actually travel there, rather than getting 99% of responses (perhaps an "echo chamber" as you call it) saying "I've never been there". Claiming that this would be "constructing an echo chamber" is illogical.
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kimura king
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Re: How much Gold do you own and why?

Post by kimura king »

delete
Last edited by kimura king on Fri Oct 01, 2021 8:21 pm, edited 1 time in total.
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Re: How much Gold do you own and why?

Post by Da5id »

HanSolo wrote: Thu Jul 29, 2021 5:54 pm
Da5id wrote: Thu Jul 29, 2021 5:45 pm
If you do not invest in gold, please do not answer. I am looking for reasons to invest and not why not invest.
Regardless of the topic, that is requesting an echo chamber be constructed. Seems like an odd way to get balanced input needed to sort out a question in your mind.
That's an illogical assertion. If someone asks people why they like traveling to Macedonia, it's perfectly reasonable to try to get responses from people who actually travel there, rather than getting 99% of responses (perhaps an "echo chamber" as you call it) saying "I've never been there". Claiming that this would be "constructing an echo chamber" is illogical.
I'm totally baffled by the analogy. Only people who actually own GME can have a a valid opinion on it? Only people who actually own international can have a valid opinion on it? Is that what you are saying? This is different than travel to Macedonia, or owning a specific car brand or such. Investing is knowledge based not experiential. IMO of course.
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HanSolo
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Re: How much Gold do you own and why?

Post by HanSolo »

Da5id wrote: Thu Jul 29, 2021 5:57 pm
HanSolo wrote: Thu Jul 29, 2021 5:54 pm
Da5id wrote: Thu Jul 29, 2021 5:45 pm
If you do not invest in gold, please do not answer. I am looking for reasons to invest and not why not invest.
Regardless of the topic, that is requesting an echo chamber be constructed. Seems like an odd way to get balanced input needed to sort out a question in your mind.
That's an illogical assertion. If someone asks people why they like traveling to Macedonia, it's perfectly reasonable to try to get responses from people who actually travel there, rather than getting 99% of responses (perhaps an "echo chamber" as you call it) saying "I've never been there". Claiming that this would be "constructing an echo chamber" is illogical.
I'm totally baffled by the analogy. Only people who actually own GME can have a a valid opinion on it? Only people who actually own international can have a valid opinion on it? Is that what you are saying? This is different than travel to Macedonia, or owning a specific car brand or such. Investing is knowledge based not experiential. IMO of course.
I guess different people have different opinions on how to conduct a survey. To make another analogy, if I wanted to know why people collect stamps, I would target stamp collectors. It sounds like you'd target the general population and get 99% of responses saying "I don't collect stamps and have no interest in that."

If I want to know why some people do Thing X, and I already know that 99% of people don't do Thing X, I'd ask the people who do Thing X why they do it.

I think my way is more efficient. But your way may be right for you. To each his own.
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Da5id
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Re: How much Gold do you own and why?

Post by Da5id »

HanSolo wrote: Thu Jul 29, 2021 6:04 pm
Da5id wrote: Thu Jul 29, 2021 5:57 pm
HanSolo wrote: Thu Jul 29, 2021 5:54 pm
Da5id wrote: Thu Jul 29, 2021 5:45 pm
If you do not invest in gold, please do not answer. I am looking for reasons to invest and not why not invest.
Regardless of the topic, that is requesting an echo chamber be constructed. Seems like an odd way to get balanced input needed to sort out a question in your mind.
That's an illogical assertion. If someone asks people why they like traveling to Macedonia, it's perfectly reasonable to try to get responses from people who actually travel there, rather than getting 99% of responses (perhaps an "echo chamber" as you call it) saying "I've never been there". Claiming that this would be "constructing an echo chamber" is illogical.
I'm totally baffled by the analogy. Only people who actually own GME can have a a valid opinion on it? Only people who actually own international can have a valid opinion on it? Is that what you are saying? This is different than travel to Macedonia, or owning a specific car brand or such. Investing is knowledge based not experiential. IMO of course.
I guess different people have different opinions on how to conduct a survey. To make another analogy, if I wanted to know why people collect stamps, I would target stamp collectors. It sounds like you'd target the general population and get 99% of responses saying "I don't collect stamps and have no interest in that."

If I want to know why some people do Thing X, and I already know that 99% of people don't do Thing X, I'd ask the people who do Thing X why they do it.

I think my way is more efficient. But your way may be right for you. To each his own.
Again an off point analogy. Stamp collecting is a hobby. Asking others who enjoy the hobby about it is only sensible.

But in an information based (like investing) question, biasing your inputs exclusively towards people who all elected to do something is so limiting. And is literally the definition of an echo chamber. I believe my analogy is much more on point. Do you believe that someone asking about buying GME should ONLY get information from people who own GME? Same question for bitcoin. If your answer is yes, huh.

The people who invest but don't purchase gold may be in multiple categories. Those who don't know anything about it gold is one category, and I see not wanting to hear from them. Those who know about gold and have evaluated the data and decided not to buy is another. I can't imagine not wanting to hear from them if I were evaluating the whether to buy gold, or how much.
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Re: How much Gold do you own and why?

Post by Spike Holland »

50 American Eagles and 50 Canadian Maple Leafs, bought in the late 90's when gold was about $400 an ounce, plus a gold ETF that holds physical gold. Less than 5% of portfolio.

Why: Diversification.

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Re: How much Gold do you own and why?

Post by finite_difference »

mptfan wrote: Thu Jul 29, 2021 1:33 pm
bigskyguy wrote: Thu Jul 29, 2021 1:27 pmThis is available should we experience a true national economic/political catastrophe (true hyperinflation) and needed to relocate to be with family in Western Europe.
If the stuff really hit the fan and society broke down, I would rather have a store of guns and ammunition than a store of gold. I certainly wouldn't want to be passing out gold coins or gold bars, that would put a target on my back.
You’d want gold, guns, ammunition, marksmanship skills, close combat skills, first aid skills, food, medicine, antibiotics, water, fallout shelter, strategically located house, land to grow garden, gardening knowledge, mechanics knowledge, survival knowledge, books, lots of supplies and tools, etc. Pray you don’t get sick. It would be helpful to be a doctor.

Be a veteran, doctor, engineer, survivalist, and a good teacher.

If guns and ammo are most useful, then a stash of guns and ammo will paint a huge target on your back. An apocalyptic scenario like that is going to be very rough.

Gold I think has utility for getting out of the country in case your country goes to heck and there’s hyperinflation or a bank run. Think Germany, Italy, France, Norway, Denmark, Poland, Eastern Europe, Venezuela, etc.
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Re: How much Gold do you own and why?

Post by HanSolo »

Da5id wrote: Thu Jul 29, 2021 6:25 pm Again an off point analogy. Stamp collecting is a hobby. Asking others who enjoy the hobby about it is only sensible.

But in an information based (like investing) question, biasing your inputs exclusively towards people who all elected to do something is so limiting. And is literally the definition of an echo chamber. I believe my analogy is much more on point. Do you believe that someone asking about buying GME should ONLY get information from people who own GME? Same question for bitcoin. If your answer is yes, huh.

The people who invest but don't purchase gold may be in multiple categories. Those who don't know anything about it gold is one category, and I see not wanting to hear from them. Those who know about gold and have evaluated the data and decided not to buy is another. I can't imagine not wanting to hear from them if I were evaluating the whether to buy gold, or how much.
You need to refer back to my argument using Thing X. It has nothing to do with hobbies.

The difference in our views has to do with survey construction. My way is better for finding out "for people who do Thing X, why do they do it." Your way is better for finding out "why people do or don't do Thing X, as the case may be."

For the purpose of survey construction, if I already know the reasons why people don't do Thing X, and I don't know the reasons why people do Thing X, then my way is more efficient for that purpose.

If you disagree, ask a professional statistician.
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Re: How much Gold do you own and why?

Post by grettman »

:idea:
Always passive wrote: Thu Jul 29, 2021 10:45 am
Toons wrote: Thu Jul 29, 2021 10:39 am None
Non producing Asset


:happy
If you do not invest in gold, please do not answer. I am looking for reasons to invest and not why not invest.
Toons gave a answer to both parts of the question.

My answer is the same.
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Re: How much Gold do you own and why?

Post by Da5id »

HanSolo wrote: Thu Jul 29, 2021 6:33 pm You need to refer back to my argument using Thing X. It has nothing to do with hobbies.

The difference in our views has to do with survey construction. My way is better for finding out "for people who do Thing X, why do they do it." Your way is better for finding out "why people do or don't do Thing X, as the case may be."

For the purpose of survey construction, if I already know the reasons why people don't do Thing X, and I don't know the reasons why people do Thing X, then my way is more efficient for that purpose.

If you disagree, ask a professional statistician.
Again, if the specific question is "should I increase my holding in GME", in your opinion is the right way to get quality information on the topic to ONLY ask people who choose invest in GME?

Note that OP also doesn't want to hear from people who used to own gold but have chosen to sell it. Does that seem reasonable to you too?

I don't believe that the arguments for a general purpose survey are relevant in the slightest. This is far different than only asking people who have been to Disney what they think of Disney, and only asking people who have drunk Coke and Pepsi which they prefer.
Last edited by Da5id on Thu Jul 29, 2021 6:42 pm, edited 1 time in total.
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Re: How much Gold do you own and why?

Post by hudson »

I skipped buying gold because I worried about storing it. I also worried about selling it and getting a fair deal.
I'd be more likely to buy pre-64 silver dimes. I understand bulk pre-64 coins. I can search the net and figure a fair price. At this time, I do not own any.
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Re: How much Gold do you own and why?

Post by HanSolo »

Da5id wrote: Thu Jul 29, 2021 6:38 pm Note that OP also doesn't want to hear from people who used to own gold but have chosen to sell it. Does that seem reasonable to you too?
If I don't know X (e.g., different people's reasons why they hold gold) and I already know Y (e.g., reasons they don't hold gold), then there's nothing unreasonable in trying to find out X.

Again, if someone wants a comprehensive discussion on X and Y, then that's fine. It's not the topic of this thread.

As a matter of courtesy, I try to pay attention to what the OP asked for, not what question I wanted them to have asked. If I don't like their question, then I don't post in their thread.
Last edited by HanSolo on Thu Jul 29, 2021 6:53 pm, edited 1 time in total.
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Re: How much Gold do you own and why?

Post by Da5id »

HanSolo wrote: Thu Jul 29, 2021 6:49 pm
Da5id wrote: Thu Jul 29, 2021 6:38 pm Note that OP also doesn't want to hear from people who used to own gold but have chosen to sell it. Does that seem reasonable to you too?
If I don't know X (e.g., different people's reasons why they hold gold) and I already know Y (e.g., reasons they don't hold gold), then there's nothing unreasonable in trying to find out X.

Again, if someone wants a comprehensive discussion on X and Y, then that's fine. It's not the topic of this thread.

As a matter of courtesy, I try to pay attention to what the OP asked for, not what question I wanted them to have asked. If I don't like their question, then I don't post in their thread.
No comment on GME analogy? Seems very on point to me. "I want to increase my GME holdings, only people who currently own GME should comment". Sensible?

As to allowing OP to control/own/moderate their own threads, I'm not generally a believer. I think that if the overall question involves gold ownership, people should feel free to comment as they like on the topic.
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Re: How much Gold do you own and why?

Post by placeholder »

Zero here too.
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HanSolo
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Re: How much Gold do you own and why?

Post by HanSolo »

Da5id wrote: Thu Jul 29, 2021 6:53 pm No comment on GME analogy? Seems very on point to me. "I want to increase my GME holdings, only people who currently own GME should comment". Sensible?
To answer your question, yes. Here is the GME analogy:

"I've already heard 1000 bogleheads give opinions on why not to invest in GME, so I'm already thoroughly knowledgeable on that reasoning. Despite that, I have my own reasons for holding GME, and I'm curious to know what reasoning other GME investors have. In order to fill in this knowledge gap, I want to hear from other GME investors, what they're doing and why."

Your way involves getting a repeat of the 1000 opinions already known. I'm not saying that's wrong, just different from what I would do (and what it seems the OP was intending, by their words).
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wwtraveler
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Re: How much Gold do you own and why?

Post by wwtraveler »

I think this thread is going to be locked soon based on where it’s going.

I haven’t noticed anyone talk about the physical problem and transaction fees.

First the physical
The physical problem is real for quantities starting at about 1kg give or take. You do realize there’s places that if someone knows you are carrying that kind of valuable they will take it, beat you, and or shoot you? There’s a non insignificant correlation to those places and in general the collective theoretical situations mentioned in this thread that would make you want have physical gold to begin with.

So I’ll stand by what I said. It’s unlikely you’ll gather enough physically to make a meaningful hedge of your currency if you are in a stable geo political location (because you have better options). Most of those smaller places (pre Eurozone for instance) now also have stable currencies and access to all other kinds of market instruments. Go back just to the 90s — it’s not like every bank had online accounts and brokerages the world over. Heck it wasn’t long ago we had significant trading and transaction fees on stocks, bonds, and funds.

Also let’s get real - if the stuff hits the fan how likely is bartering with gold? How likely is it you walk to a border and try to bribe your way in? (And the same thing as above ribbed, beaten, shot doesn’t happen).

Now if you had a vessel (boat or plane) of significant size ok we can get into some James Bond type scenarios maybe but there’s so many other scenarios that would likely play out first a hundred times over.

I think the attraction is for people that have roots in multiple countries already and some significant wealth and are trying to keep a certain amount of emergency reserve or investment out of the tax books. They use a coin here or there as a Xmas present to a child or family member and no one is much the wiser. In those cases gold is also probably present because the family wealth has existed for many decades and it at one time squirreled away gold because robust and open securities were not as widely or cheaply available.


Transaction costs (of physical gold as an investment):
Also no one has mentioned just the day to day PIA of transaction costs of physical gold.

Ever try to sell physical gold? Where do you end up? It’s 1) online 2) the jewelry store which will most often refer you to 3) the pawn shop or “local gold dealer” which is basically a pawn shop.

I don’t know all countries laws but assume USA for a second. You show up nervous as all heck and extremely awkward because you have no clue what you are doing. They give you 70-80% of the spot price and if you have too much of it triggers and IRS report. Of course typically only people the really need money show up to sell gold so your bargaining power is very low. And that’s just the “best” case experience on the selling side.

Buying in significant quantity is easier since obviously the various dealers turn around backwards to make it easy for you to pay for gold. Of course again there may be non trivial fees like markups on coins “because it’s special and has more than intrinsic value” (until you then try to sell it and it’s just gold weight). Then there’s more reporting to the IRS for significant sums.

So let’s just check this scenario out. You buy physical gold from reputable dealer online. Gold is $1250 but you pay $1300 plus $25 shipping for a total of $1325. It’s just an ounce so no reporting except your transaction is obviously logged by the dealer and probably your bank account since I doubt you mailed cash.

Ok now we get to a 10% increase in gold price so it’s now $1375. You spent $1325 so your gain is $50. Except it’s not even $50 because you only get 90% for your intrinsic coin no one really cares about at the spot price (.9 x $1375 = $1237.50). So really you are down $87.50 even though gold went up 10%!

So for most, unless you have a way to gain experience in physically buying and selling gold as an investment it doesn’t often make sense either. (Which is where good securities like an etf come into play). Are you really going to put 5, 10, 15, 20% of your investment and then deal with Bob the local scam artist pawn shop dealer vs dealing with a gold etf and working with Vanguard of Fidelity?

Get real people. Too much movie and pirate fantasy going on here.
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Re: How much Gold do you own and why?

Post by Normchad »

grettman wrote: Thu Jul 29, 2021 6:36 pm :idea:
Always passive wrote: Thu Jul 29, 2021 10:45 am
Toons wrote: Thu Jul 29, 2021 10:39 am None
Non producing Asset


:happy
If you do not invest in gold, please do not answer. I am looking for reasons to invest and not why not invest.
Toons gave a answer to both parts of the question.

My answer is the same.
This is my answer as well. I really like what Warren Buffet had to say about it; I believe this is from 2013.
Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion. Call this cube pile A.

Let’s now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world’s most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?

Beyond the staggering valuation given the existing stock of gold, current prices make today’s annual production of gold command about $160 billion. Buyers – whether jewelry and industrial users, frightened individuals, or speculators – must continually absorb this additional supply to merely maintain an equilibrium at present prices.

A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops – and will continue to produce that valuable bounty, whatever the currency may be. Exxon Mobil will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons). The 170,000 tons of gold will be unchanged in size and still incapable of producing anything.
You can fondle the cube, but it will not respond.
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HanSolo
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Re: How much Gold do you own and why?

Post by HanSolo »

wwtraveler wrote: Thu Jul 29, 2021 7:03 pm Also let’s get real - if the stuff hits the fan how likely is bartering with gold? How likely is it you walk to a border and try to bribe your way in? (And the same thing as above ribbed, beaten, shot doesn’t happen).

...

Get real people. Too much movie and pirate fantasy going on here.
Question (nothing involving pirate movies): Some people held gold during the hyperinflation of the Old Taiwan Dollar. Would they have been better off, or worse off, if they had listened to advice like yours?
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Re: How much Gold do you own and why?

Post by retired@50 »

HanSolo wrote: Thu Jul 29, 2021 5:19 pm In the end, it's all just opinion and personal preference. Everyone is entitled to theirs.
Amen. ^^^^

I just make suggestions and certainly try not to get worked up if someone ignores my advice or thinking.

Regards,
If liberty means anything at all it means the right to tell people what they do not want to hear. -George Orwell
DidOurBest
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Re: How much Gold do you own and why?

Post by DidOurBest »

finite_difference wrote: Thu Jul 29, 2021 6:30 pm
mptfan wrote: Thu Jul 29, 2021 1:33 pm
bigskyguy wrote: Thu Jul 29, 2021 1:27 pmThis is available should we experience a true national economic/political catastrophe (true hyperinflation) and needed to relocate to be with family in Western Europe.
If the stuff really hit the fan and society broke down, I would rather have a store of guns and ammunition than a store of gold. I certainly wouldn't want to be passing out gold coins or gold bars, that would put a target on my back.
You’d want gold, guns, ammunition, marksmanship skills, close combat skills, first aid skills, food, medicine, antibiotics, water, fallout shelter, strategically located house, land to grow garden, gardening knowledge, mechanics knowledge, survival knowledge, books, lots of supplies and tools, etc. Pray you don’t get sick. It would be helpful to be a doctor.

Be a veteran, doctor, engineer, survivalist, and a good teacher.

If guns and ammo are most useful, then a stash of guns and ammo will paint a huge target on your back. An apocalyptic scenario like that is going to be very rough.

Gold I think has utility for getting out of the country in case your country goes to heck and there’s hyperinflation or a bank run. Think Germany, Italy, France, Norway, Denmark, Poland, Eastern Europe, Venezuela, etc.
This.

When we lived through the total destruction of Katrina outside of Biloxi MS and had no running water or electricity or fuel for a week+ gold and other precious metals were absolutely useless.

Nobody wanted them, nobody was “bartering” with them. Gas, food, ice and medical supplies were what held any final value.

I’ve always thought since then that people who think that they will survive with metals in this type of scenario have never lived through anything remotely like this type of scenario.

We personally own zero gold/metals.
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Re: How much Gold do you own and why?

Post by Da5id »

HanSolo wrote: Thu Jul 29, 2021 7:01 pm
Da5id wrote: Thu Jul 29, 2021 6:53 pm No comment on GME analogy? Seems very on point to me. "I want to increase my GME holdings, only people who currently own GME should comment". Sensible?
To answer your question, yes. Here is the GME analogy:

"I've already heard 1000 bogleheads give opinions on why not to invest in GME, so I'm already thoroughly knowledgeable on that reasoning. Despite that, I have my own reasons for holding GME, and I'm curious to know what reasoning other GME investors have. In order to fill in this knowledge gap, I want to hear from other GME investors, what they're doing and why."

Your way involves getting a repeat of the 1000 opinions already known. I'm not saying that's wrong, just different from what I would do (and what it seems the OP was intending, by their words).
OK, I see that point of view. But I still always want contrary opinions myself. Looking for ways to fight against my preconceived notions and prejudices seems wise to me.
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Re: How much Gold do you own and why?

Post by wwtraveler »

Take your Warren story and change out gold for USD paper currency. Same result except it’s a very flammable and bigger physical stack of paper.

Stuff is what matters.

Currency or gold is just a temporary medium for exchange so we aren’t inefficiently bartering.

There’s a market to invest and participate in the ups and downs of this and other currency mediums but that’s just trading or investing IMO.

To do ops original question it’s like any investment per se - do you like that business or natural resource or whatever and do you think after your costs and efforts it’s worth investing in it and or does it have some other benefit (say if you bought water you could drink it for instance).

When it comes to physical gold my opinion is it’s a PIA for just about anyone until you hit high net worth or are doing “something” more than just trying to eek out a better legal return.

I’m a bit on a crusade because I think I’ve seen one too many tv and magazine ads peddling gold but really just selling selling snakeoil and then hearing about someone actually wasting non insignificant sums of money. It’s effectively almost always a loss or long term albatross vs a much cheaper (free of tx fees) marketable (liquid) security investment.
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Re: How much Gold do you own and why?

Post by wwtraveler »

This was partially during WW2 and the country was taken over by an “exile govt”. I’d say that qualifies as a unstable geo politic situation. That currency existed for what 3 years amidst total chaos of “I wonder if I live another day”?

My advice would have been LEAVE THE ISLAND.

I doubt the common laborer had an open gold market and went down one afternoon ahead of time to say “eh I think we are going to get invaded id like some gold please”. The people with any means probably left in the mid 30s when it wasn’t quite sure if Japan would invade.

But yes let me indulge you. The layman had all their money in gold. Guess what? Everyone else would have known that and taken it since they would have been the only ones walking around with gold. Investment return -100% robbed, beat up, and died.

I’m sorry these scenarios just don’t work. In all of those cases you are swept up by something much larger. Unless you are large enough to push back gold isn’t going to change that.

As a currency hedge in a stable country where the currency just isn’t that big vs the world - sure. Recognizing the transaction fees are high for this insurance policy.

As an investment in an etf - sure

As physical because you think it’s cool - sure (again fees)

As a emergency bailout inflation border patrol bribe because you think your the one to predict WW3 correctly - probably not. That’s just a great sales line by gold dealers.

HanSolo wrote: Thu Jul 29, 2021 7:13 pm
wwtraveler wrote: Thu Jul 29, 2021 7:03 pm Also let’s get real - if the stuff hits the fan how likely is bartering with gold? How likely is it you walk to a border and try to bribe your way in? (And the same thing as above ribbed, beaten, shot doesn’t happen).

...

Get real people. Too much movie and pirate fantasy going on here.
Question (nothing involving pirate movies): Some people held gold during the hyperinflation of the Old Taiwan Dollar. Would they have been better off, or worse off, if they had listened to advice like yours?
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HanSolo
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Re: How much Gold do you own and why?

Post by HanSolo »

wwtraveler wrote: Thu Jul 29, 2021 7:45 pm This was partially during WW2 and the country was taken over by an “exile govt”. I’d say that qualifies as a unstable geo politic situation. That currency existed for what 3 years amidst total chaos of “I wonder if I live another day”?

My advice would have been LEAVE THE ISLAND.

...

But yes let me indulge you. The layman had all their money in gold. Guess what? Everyone else would have known that and taken it since they would have been the only ones walking around with gold. Investment return -100% robbed, beat up, and died.

I’m sorry these scenarios just don’t work. In all of those cases you are swept up by something much larger. Unless you are large enough to push back gold isn’t going to change that.
Yes, Taiwan was unstable then (although not as wracked in conflict as the Mainland). But you presented the scenario, "if the stuff hits the fan". I responded to that.

I think you've been watching too many Mad Max movies. The answer to my original question is that in the hyperinflation scenario I mentioned (as well as in some other hyperinflation scenarios), holding gold provided a benefit to those persons. It wasn't a movie.

If you still think gold is useless when debt-to-GDP goes to 2x, 5x, or 10x, then I admire your optimism.

It's interesting that pretty much all central banks worldwide think gold has value. Perhaps you know better.
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Re: How much Gold do you own and why?

Post by pseudoiterative »

wwtraveler wrote: Thu Jul 29, 2021 7:45 pm The layman had all their money in gold. Guess what? Everyone else would have known that and taken it since they would have been the only ones walking around with gold. Investment return -100% robbed, beat up, and died.

I’m sorry these scenarios just don’t work. In all of those cases you are swept up by something much larger. Unless you are large enough to push back gold isn’t going to change that.

[...]

As a emergency bailout inflation border patrol bribe because you think your the one to predict WW3 correctly - probably not. That’s just a great sales line by gold dealers.
with a prepper-ish mindset there's arguably a good case for investing in relationships with neighbours & the local community with the understanding of helping each other out in the scenario when [expletive removed by admin LadyGeek] hits the fan. or investing in a practical trade one can fall back on to make a living if woe and calamity the abstractions of virtual IOUs in the form of money / debt / claims of ownership of investments were to all vanish (this can clearly happen if enough people decide not to believe in them any more).

answering the question: i don't think i own any gold, although i do own some ETFs that may have exposure to companies that do have some gold / bitcoin / dogecoin in the company coffers (is TSLA still using BTC trade profits to boost quarterly earnings? hah)
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Re: How much Gold do you own and why?

Post by 7eight9 »

There are places where the spreads are much tighter on gold (in general - not necessarily American Eagles). In Hong Kong Hang Seng Bank has some of the best spreads --- https://www.hangseng.com/en-hk/personal ... ld-prices/

On a one Tael Bar (99.99) --- 17,240 buy | 17,360 sell. Spread of 120 HKD. Catch being you have to get there (or know someone who can go for you).

Why own gold? It has a better track record than fiat currencies.
I guess it all could be much worse. | They could be warming up my hearse.
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Re: How much Gold do you own and why?

Post by seajay »

suemarkp wrote: Thu Jul 29, 2021 1:56 pmNot sure why Buffet denigrates gold
Berkshire Hathaway Chairman letter 1979 ...

One friendly but sharp-eyed commentator on Berkshire has pointed out that our book value at the end of 1964 would have bought about one-half ounce of gold and, fifteen years later, after we have plowed back all earnings along with much blood, sweat and tears, the book value produced will buy about the same half ounce. A similar comparison could be drawn with Middle Eastern oil. The rub has been that government has been exceptionally able in printing money and creating promises, but is unable to print gold or create oil.
Seemingly he prefers silver
https://www.berkshirehathaway.com/letters/1997.html
Our second non-traditional commitment is in silver. Last year, we purchased 111.2 million ounces.
... maybe because between 1933 and 1975 investment gold trading was outlawed in the US. Silver worked just as well as a substitute.

A century+ ago, for multiple prior centuries, gold and money were pegged, inflation broadly averaged 0% but with clusters of high inflation and deflation that broadly cancelled out. Made more sense for investors to hold bonds as the interest paid was in effect a real rate of return, and were pretty decent amounts also. In the case of Treasury bonds - a form of the state paying you for it to securely store your gold. Since that coupling ended, 1931 in the UK, 1933 in the US, there's been predominately inflation only, and more a case of of treasury bonds interest just offsetting inflation. Money in not backed by anything tangible simply devalues, where one body can print/spent money that devalues all other notes in circulation, a form of micro taxation. A reasonable post 1930's transition was to sell bonds and 50/50 into stock and gold, or in the US investors case silver.

Long term from a UK investors perspective, holding hard US$ currency and gold 50/50 yearly rebalanced would have offset much of UK inflation. When those US$ were instead deposited to earn interest or invested in stocks then more the better.

For some, holding gold rather than bonds would have been more productive. 10% inflation, 10% bond interest, 40% taxation ... -4% net real. Inflation drives by monetary expansion is a form of taxation

http://warrenbuffettoninvestment.com/ho ... -investor/
The arithmetic makes it plain that inflation is a far more devastating tax than anything that has been enacted by our legislatures. The inflation tax has a fantastic ability to simply consume capital. It makes no difference to a widow with her savings in a 5% passbook account whether she pays 100% income tax on her interest income during a period of zero inflation, or pays no income taxes during years of 5% inflation. Either way, she is “taxed” in a manner that leaves her no real income whatsoever. Any money she spends comes right out of capital. She would find outrageous a 120% income tax, but doesn’t seem to notice that 6% inflation is the economic equivalent.
Gold in being a form of undated zero coupon inflation bond can de-risk both inflation and taxation risk factors.

If you ignore the pre 1930's years when it was better to have the state paying you for it to securely store your gold (hold bonds where the proceeds following maturity/sale could be converted into gold at a fixed rate), and instead look at the post 1930's and how the US$ declined relative to gold
Image
then by-eye $1 devalued to $0.05 whilst gold rose to $4.52, 90 times more purchase power. But in a volatile manner. Dow/Gold ratio for instance in 1980 and 1 ounce of gold near bought a Dow Index stock share. End of 1990's and it took 40 ounces of gold to buy a Dow index stock share. Gold did lousy, stocks did great. Over other periods that swings the other way around. Reducing stocks to buy more ounces of gold during the 1980's and 1990's might have had you holding ten times as many ounces of gold at the end of the 1990's compared to at the start of the 1980's. In the 2000's you would have been deploying ounces of gold to buy more stock index shares, as shares fell first during the dot com crisis, then the 2008 financial crisis and again more recently across the Covid crisis.

Since 1972 and 50/50 stock/gold versus 100% stock ... provided near the same broad reward

Since 2005, 50/50 BRK/gold compared to 50/50 S&P500/total bond for someone that paid high taxes against dividends/interest would not only have seen lower total returns, but also paid more of the gains in taxes.

Many have a apparent intense dislike of gold, will jump in as per this thread very quickly to vilify it. Often they'll be fine with bonds however, and the tax risks that bears and often in total disregard of the negativities that exist in bonds. For instance many firms borrow by issuing Corporate bonds, if a investor buys a stock that does sell/issue bonds and they also bought their bonds then in effect they're borrowing/lending to themselves, for zero overall nominal, negative when discounted by inflation. Bonds have 0% real expected rewards, less after taxes/costs. In the UK the state doesn't even bother with taxing capital gains on treasury bonds as its well known as a broad zero sum situation, only the interest is taxed, as that's a form of taxation of inflation.

Taking guidance from those that criticize gold, but who albeit indirectly might be tying up capital by borrowing and lending to themselves!!! Sadly we're in a era where your pension may be obligated to invest in bonds, even when the real yields are negative, legally bound to pay to lend to the state!!! Taxations take many forms, a in-hand asset that has no counter party risk, that is portable and globally recognised, and that pays no interest/dividends such that taxation risk is lower compared to other interest/dividend paying assets, and that can move in significant counter direction to stocks when stocks/bonds decline - is a useful risk diversifier. How much to hold? Well anything less than 10% is unlikely to be of much use, anything more than 50% is likely too much. The Permanent Portfolio opts for 25%, the Golden Butterfly 20%.
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Re: How much Gold do you own and why?

Post by lazybones18 »

My wife bought about $50,000 worth of Gold jewelry on our wedding ( its a south Asian culture ) ...
and she keeps buying more every year

I don't consider it a investment at all. she plans to give it to our kids / grandkids eventually

my wife thinks buying gold is the best investment but we all know what the real motive is :D
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