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.
I've got some silver in the form of coins my dad gave me a few years ago.
I'm happy to sell them if I can find a local place (I live in Bethlehem, PA) that will give me the spot price. I have too much (a couple hundred ounces?) to be comfortably mailing out.
I collect ancient gold/silver coins. No rebalancing, no selling. I just buy coins I like when I find something cool for a decent price (which is getting much harder these days because collectible values are soaring!)
I own about $10k in gold. So far it's been an awful investment.
I'm now thinking about flipping into into a triple leveraged fund the next time the market tanks. This is the fastest way I can think of to offset my losses.
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.
Regards,
I have never bought any gold, and have had almost all my investments in the S&P 500 index for the past 14 years. I wanted growth, not wealth preservation...because I had no wealth.
But now, I do. And I am concerned about preserving that wealth, especially now that I am in early retirement. I am researching ways to do that, and gold seems to finally be an option for me. So, I am considering rolling over a chunk of my 401k into a self-directed IRA that will allow me to hold gold. I am also starting to invest into "that which cannot be spoken of on Bogleheads", i.e. digital gold.
I am very concerned about the housing bubble in the US. This is what led to the last huge crash in 2007-2008. And even though it makes me smile to see the high value of my stocks, I am also very concerned about the high valuations and the potential for a stock market collapse. And let's not even get into the growing deficit, growing trade deficit, and the printing of money.
I am only 55, and hope to live another 30 years approximately....so I do need to think about wealth preservation. And gold is one thing I'm looking at. The stability of gold, as seen in this graph, is attractive to me.
Rational Reminder recently interviewed Cam Harvey about a wide range of topics. He discussed his gold research: https://youtu.be/RSwctXnMnrw?t=4843
7% of my portfolio in sgol low cost etf. It’s insurance that makes me feel better because they are going to print so much my retirement will be burned.
ApeAttack wrote: ↑Sat Oct 16, 2021 10:41 am
I recently inherited 1.5 oz of gold coins. I would like to sell them, but I'm too lazy to go to local dealers.
Maybe I'll keep them as some long-shot hedge against the unknown since they cost me nothing. I would've never bought them myself.
Keep them. One day, in the very distant future your kids will inherit them.
or
If the world falls apart you may be able to use them to bribe someone to get you out fo the country.
I have a few gold crowns in my mouth - I don't know if that counts. But otherwise - none. If I decided that I needed to own it - I would rather buy stock in a company that mines gold instead. At least that way - you have ownership of something that produces something.
59Gibson wrote: ↑Sat Oct 16, 2021 1:12 pm
To me it's seem logical if one holds cash, gold should occupy a % as well.
Should? Seriously? You're saying that all of us who have a cash position should also have a gold position. That's pretty prescriptive.
Certainly. A % of one's cash position may be an excellent inflation hedge against cash, at least historically it has been. I do mean if one is planning on holding a size-able cash position long term. Am I that far removed from BH principles? I'm not recommending the perm. portfolio with 25% gold/precious metals.
I wasn't going to answer this thread since I (didn't think) I held gold but it occurred to me that in a 'robo-investor' account I have they do hold IAU
It turns out to be .07% of my net worth.
So the answer is I have .07% of my net worth in gold because a Robo-investor account decided that was a nice diversification.
I would have written a shorter letter, but I did not have the time. |
- Blaise Pascal
59Gibson wrote: ↑Sat Oct 16, 2021 1:12 pm
To me it's seem logical if one holds cash, gold should occupy a % as well.
Should? Seriously? You're saying that all of us who have a cash position should also have a gold position. That's pretty prescriptive.
Certainly. A % of one's cash position may be an excellent inflation hedge against cash, at least historically it has been. I do mean if one is planning on holding a size-able cash position long term. Am I that far removed from BH principles? I'm not recommending the perm. portfolio with 25% gold/precious metals.
59Gibson wrote: ↑Sat Oct 16, 2021 1:12 pm
To me it's seem logical if one holds cash, gold should occupy a % as well.
Should? Seriously? You're saying that all of us who have a cash position should also have a gold position. That's pretty prescriptive.
Certainly. A % of one's cash position may be an excellent inflation hedge against cash, at least historically it has been. I do mean if one is planning on holding a size-able cash position long term. Am I that far removed from BH principles? I'm not recommending the perm. portfolio with 25% gold/precious metals.
59Gibson wrote: ↑Sat Oct 16, 2021 4:48 pm
Certainly. A % of one's cash position may be an excellent inflation hedge against cash, at least historically it has been. I do mean if one is planning on holding a size-able cash position long term. Am I that far removed from BH principles? I'm not recommending the perm. portfolio with 25% gold/precious metals.
Yes, you are.
Bogle bought and owned 5% gold in a portfolio he managed so maybe not that far removed. In small/modest quantities, I don't view BH ownership of gold as radical or sacrilegious. Don't like it? Don't buy it.
Between the idea And the reality...Between the motion And the act...Falls the Shadow - T. S. Eliot
59Gibson wrote: ↑Sat Oct 16, 2021 4:48 pm
Certainly. A % of one's cash position may be an excellent inflation hedge against cash, at least historically it has been. I do mean if one is planning on holding a size-able cash position long term. Am I that far removed from BH principles? I'm not recommending the perm. portfolio with 25% gold/precious metals.
Yes, you are.
Bogle bought and owned 5% gold in a portfolio he managed so maybe not that far removed. In small/modest quantities, I don't view BH ownership of gold as radical or sacrilegious. Don't like it? Don't buy it.
You missed my point completely. I was objecting to 59Gibson saying that we should own gold. I'm perfectly happy with it being optional. I don't like it, so I don't buy it.
I stay at 20% which is what is called for by the Golden Butterfly portfolio. I used to do the permanent portfolio, of which the golden butterfly is a variant and it was 25%. I have been both disappointed and pleased with gold along the way. I don't re-balance much however. I prefer to just let
things go where they want to until they get seriously out of whack.
UpperNwGuy wrote: ↑Sat Oct 16, 2021 8:17 pm
You missed my point completely. I was objecting to 59Gibson saying that we should own gold. I'm perfectly happy with it being optional. I don't like it, so I don't buy it.
Gotcha and, put that way, I agree.
Between the idea And the reality...Between the motion And the act...Falls the Shadow - T. S. Eliot
I just bought my first 1 oz of physical gold (uncirculated) from the US Mint.
I would feel comfortable owning physical if I knew how to store it safely. I'm not sure I can trust the ETFs or the online sites. We could wake up one morning and be told the gold is just not there, and there's nothing backing those funds. There may be criminal indictments (if there is even any law at that point) but the money will be gone.
I traded gold and gold miners last year. I have been out since August 2020. Gold/miners follow technicals closely and are better off being traded versus 'buy and hold' forever. This is kind of the case with commodities in general.
anoop wrote: ↑Sun Oct 17, 2021 12:03 am
I'm not sure I can trust the ETFs or the online sites. We could wake up one morning and be told the gold is just not there, and there's nothing backing those funds. There may be criminal indictments (if there is even any law at that point) but the money will be gone.
Correct. There are more shares of gold ETFs than there are gold ounces. Look at the "Paper to Gold Ratio Now" tab on the bottom right of this link: https://usdebtclock.org/gold-precious-metals.html
anoop wrote: ↑Sun Oct 17, 2021 12:03 am
I'm not sure I can trust the ETFs or the online sites. We could wake up one morning and be told the gold is just not there, and there's nothing backing those funds. There may be criminal indictments (if there is even any law at that point) but the money will be gone.
Correct. There are more shares of gold ETFs than there are gold ounces. Look at the "Paper to Gold Ratio Now" tab on the bottom right of this link: https://usdebtclock.org/gold-precious-metals.html
But a share of gold ETF is very much less than an ounce of gold. In fact, IAU is less than 1/100th of an ounce. I believe they are also backed by real metal.
Add up the AUMs and you get a better number; it is not that much. A ballpark figure is about $100B in ETFs.
Paper could refer to futures, maybe? What is the actual definition here?
Passive investing: not about making big bucks but making profits. Active investing: not about beating the market but meeting goals. Speculation: not about timing the market but taking profitable risks.
anoop wrote: ↑Sun Oct 17, 2021 12:03 am
I'm not sure I can trust the ETFs or the online sites. We could wake up one morning and be told the gold is just not there, and there's nothing backing those funds. There may be criminal indictments (if there is even any law at that point) but the money will be gone.
Correct. There are more shares of gold ETFs than there are gold ounces. Look at the "Paper to Gold Ratio Now" tab on the bottom right of this link: https://usdebtclock.org/gold-precious-metals.html
But a share of gold ETF is very much less than an ounce of gold. In fact, IAU is less than 1/100th of an ounce. I believe they are also backed by real metal.
Add up the AUMs and you get a better number; it is not that much. A ballpark figure is about $100B in ETFs.
Paper could refer to futures, maybe? What is the actual definition here?
The AUM is higher than the value of their gold holdings...or is at least for GLD. Essentially we trust that when they create new baskets of shares for APs it's for the same amount (value?) of gold every time so existing shares isn't getting diluted.
Since for most of these shareholder can't redeem for gold it could be an elaborate con game but we're betting that State Street and BlackRock isn't doing that. What actually happens to the value if one of them goes Lehman Brothers on us I don't know. I should probably figure that out...
Now I'm not buying GLD as a hedge against collapse of society and I'm aware of the counterparty risk. Which is good since I'm not convinced that owning bullion in a vault controlled by a corporate entity is actually any safer and I want to hold it in a tax advantaged account vs in my back yard which means TINA.
Last edited by nigel_ht on Mon Oct 18, 2021 4:21 pm, edited 1 time in total.
Different gold ETFs have different prospectus language regarding allocated vs unallocated gold and use of derivatives. During my review I formed the opinion that SGOL was the cleanest shirt of the funds I reviewed. Of course the deep risk is always there unless you physically hold it.
Roughly 2% of our net worth is in gold and silver, about equally split.
As David Stein of the Money for the Rest of Us podcasts refers to it, we hold precious metals as 'insurance against the unknown'. But unlike real insurance, we stand a good chance of at least keeping pace with inflation over the long-term with our holdings and may even have some good returns. Gold has had higher returns than stocks since the year 2000, certainly not a short term period.
anoop wrote: ↑Sun Oct 17, 2021 12:03 am
I'm not sure I can trust the ETFs or the online sites. We could wake up one morning and be told the gold is just not there, and there's nothing backing those funds. There may be criminal indictments (if there is even any law at that point) but the money will be gone.
Correct. There are more shares of gold ETFs than there are gold ounces. Look at the "Paper to Gold Ratio Now" tab on the bottom right of this link: https://usdebtclock.org/gold-precious-metals.html
But a share of gold ETF is very much less than an ounce of gold. In fact, IAU is less than 1/100th of an ounce. I believe they are also backed by real metal.
Add up the AUMs and you get a better number; it is not that much. A ballpark figure is about $100B in ETFs.
Paper could refer to futures, maybe? What is the actual definition here?
The AUM is higher than the value of their gold holdings...or is at least for GLD. Essentially we trust that when they create new baskets of shares for APs it's for the same amount (value?) of gold every time so existing shares isn't getting diluted.
Since for most of these shareholder can't redeem for gold it could be an elaborate con game but we're betting that State Street and BlackRock isn't doing that. What actually happens to the value if one of them goes Lehman Brothers on us I don't know. I should probably figure that out...
According to my reading, many of these ETFs are backed with the real metal. Otherwise, why are we paying the fees to protect nothing (not to mention how the IRS would feel about it)?
Passive investing: not about making big bucks but making profits. Active investing: not about beating the market but meeting goals. Speculation: not about timing the market but taking profitable risks.
anoop wrote: ↑Sun Oct 17, 2021 12:03 am
I'm not sure I can trust the ETFs or the online sites. We could wake up one morning and be told the gold is just not there, and there's nothing backing those funds. There may be criminal indictments (if there is even any law at that point) but the money will be gone.
Correct. There are more shares of gold ETFs than there are gold ounces. Look at the "Paper to Gold Ratio Now" tab on the bottom right of this link: https://usdebtclock.org/gold-precious-metals.html
But a share of gold ETF is very much less than an ounce of gold. In fact, IAU is less than 1/100th of an ounce. I believe they are also backed by real metal.
Add up the AUMs and you get a better number; it is not that much. A ballpark figure is about $100B in ETFs.
Paper could refer to futures, maybe? What is the actual definition here?
The AUM is higher than the value of their gold holdings...or is at least for GLD. Essentially we trust that when they create new baskets of shares for APs it's for the same amount (value?) of gold every time so existing shares isn't getting diluted.
Since for most of these shareholder can't redeem for gold it could be an elaborate con game but we're betting that State Street and BlackRock isn't doing that. What actually happens to the value if one of them goes Lehman Brothers on us I don't know. I should probably figure that out...
According to my reading, many of these ETFs are backed with the real metal. Otherwise, why are we paying the fees to protect nothing (not to mention how the IRS would feel about it)?
They are supposed to be backed with real metal but who is actually checking? These funds are OK for speculating on the price of gold but they won't do much if we have an economic collapse. And if we don't have an economic collapse, there's JPM manipulating the markets and paying fines regularly as the cost of doing business.
rockstar wrote: ↑Sat Oct 16, 2021 12:19 pm
I own about $10k in gold. So far it's been an awful investment.
I'm now thinking about flipping into into a triple leveraged fund the next time the market tanks. This is the fastest way I can think of to offset my losses.
Mental account much?
Unless you bought the gold between mid-2011 and early 2013, you should be ahead in nominal value right now at least.
More importantly, I think that buying gold specifically to get a great return on the gold itself is probably a poor move. Those who choose to own a significant stake in gold (5% or more) should do so for portfolio benefits (e.g., lower maximum drawdown in the event of a multi-year decline in stocks). Right now at least, I believe that the same should be true of those who choose to hold bonds, which are very likely to lose out to inflation over the next decade and very possibly longer.
But a share of gold ETF is very much less than an ounce of gold. In fact, IAU is less than 1/100th of an ounce. I believe they are also backed by real metal.
Add up the AUMs and you get a better number; it is not that much. A ballpark figure is about $100B in ETFs.
Paper could refer to futures, maybe? What is the actual definition here?
The AUM is higher than the value of their gold holdings...or is at least for GLD. Essentially we trust that when they create new baskets of shares for APs it's for the same amount (value?) of gold every time so existing shares isn't getting diluted.
Since for most of these shareholder can't redeem for gold it could be an elaborate con game but we're betting that State Street and BlackRock isn't doing that. What actually happens to the value if one of them goes Lehman Brothers on us I don't know. I should probably figure that out...
According to my reading, many of these ETFs are backed with the real metal. Otherwise, why are we paying the fees to protect nothing (not to mention how the IRS would feel about it)?
They are supposed to be backed with real metal but who is actually checking? These funds are OK for speculating on the price of gold but they won't do much if we have an economic collapse. And if we don't have an economic collapse, there's JPM manipulating the markets and paying fines regularly as the cost of doing business.
Right. Even if the gold was stored in Fort Knox and we have every right to it, it does not mean we can get to it.
I only hold a little bit of real metal for meltdowns; but I guess it can be used for wiring, paperweight, or self-defense if everything stays good.
Passive investing: not about making big bucks but making profits. Active investing: not about beating the market but meeting goals. Speculation: not about timing the market but taking profitable risks.
anoop wrote: ↑Sun Oct 17, 2021 12:03 am
I'm not sure I can trust the ETFs or the online sites. We could wake up one morning and be told the gold is just not there, and there's nothing backing those funds. There may be criminal indictments (if there is even any law at that point) but the money will be gone.
Correct. There are more shares of gold ETFs than there are gold ounces. Look at the "Paper to Gold Ratio Now" tab on the bottom right of this link: https://usdebtclock.org/gold-precious-metals.html
But a share of gold ETF is very much less than an ounce of gold. In fact, IAU is less than 1/100th of an ounce. I believe they are also backed by real metal.
Add up the AUMs and you get a better number; it is not that much. A ballpark figure is about $100B in ETFs.
Paper could refer to futures, maybe? What is the actual definition here?
The AUM is higher than the value of their gold holdings...or is at least for GLD. Essentially we trust that when they create new baskets of shares for APs it's for the same amount (value?) of gold every time so existing shares isn't getting diluted.
Since for most of these shareholder can't redeem for gold it could be an elaborate con game but we're betting that State Street and BlackRock isn't doing that. What actually happens to the value if one of them goes Lehman Brothers on us I don't know. I should probably figure that out...
According to my reading, many of these ETFs are backed with the real metal. Otherwise, why are we paying the fees to protect nothing (not to mention how the IRS would feel about it)?
But shares of the ETF isn't ownership of some fraction of an ounce of gold but shares of the trust that owns gold. It's a claim on the value of the gold that if redeemed will be redeemed in USD not some in gold. The trustee uses a custodian to store the gold why generally uses sub-custodians like the Bank of England. IAU may be structured differently than GLD/GLDM.
Since the AUM value exceeds the actual gold value being held some amount is value is trust (heh) in the stability of the trustee, its custodian and sub-custodians. State Street, HBSC, Bank of England, etc. All reputable firms generally considered too big to fail...but so was Lehman Brothers...
rockstar wrote: ↑Sat Oct 16, 2021 12:19 pm
I own about $10k in gold. So far it's been an awful investment.
I'm now thinking about flipping into into a triple leveraged fund the next time the market tanks. This is the fastest way I can think of to offset my losses.
Mental account much?
Unless you bought the gold between mid-2011 and early 2013, you should be ahead in nominal value right now at least.
More importantly, I think that buying gold specifically to get a great return on the gold itself is probably a poor move. Those who choose to own a significant stake in gold (5% or more) should do so for portfolio benefits (e.g., lower maximum drawdown in the event of a multi-year decline in stocks). Right now at least, I believe that the same should be true of those who choose to hold bonds, which are very likely to lose out to inflation over the next decade and very possibly longer.
It always boils down to timing, and then it takes time to make money. I usually give investments two years before I actually make rash decisions, which is usually not long enough, but I'm not a very patient person.
I can't justify bonds right now. Right now, BND holders are losing about 7% real this year alone. A therapist would be cheaper when the market dives than BND over the next decade. I honestly don't expect myself to sit back and watch 50% of my equity portfolio evaporate. That's nuts. But if someone is a buy and hold forever, I guess losing a little bit in bonds each year is okay to only experience something less than a 50% drop overall.
gwe67 wrote: ↑Thu Jul 29, 2021 10:46 am
I don't live in Israel, so I have no idea how I would invest in your country. Maybe gold would be appropriate in Israel, but not in the U.S. You should put [Israel] in your subject line.
Why is Israel relevant? In fact for US investors it should be more relevant given the deterioration of the dollar. Israel has one of the strongest currency in the world.
Then I suppose you have answered your own question....drop gold.
Be careful not to drop it on your foot though ... you could break a toe.
anoop wrote: ↑Sun Oct 17, 2021 12:03 am
I just bought my first 1 oz of physical gold (uncirculated) from the US Mint.
I would feel comfortable owning physical if I knew how to store it safely. I'm not sure I can trust the ETFs or the online sites. We could wake up one morning and be told the gold is just not there, and there's nothing backing those funds. There may be criminal indictments (if there is even any law at that point) but the money will be gone.
How difficult would it be to sell physical gold if you needed to and how would you do so?
mailboat wrote: ↑Mon Oct 18, 2021 10:54 pm
Big FAT Zero. Its worst possible thing I could have done to my portfolio.
If you'd bought gold on the day you joined BH at $1250/oz(today its around $1750) with the 5% you hold in cash or even half of it, you would have improved your returns. It's unlikely gold could have been the "worst possible thing" for your portfolio.
anoop wrote: ↑Sun Oct 17, 2021 12:03 am
I just bought my first 1 oz of physical gold (uncirculated) from the US Mint.
I would feel comfortable owning physical if I knew how to store it safely. I'm not sure I can trust the ETFs or the online sites. We could wake up one morning and be told the gold is just not there, and there's nothing backing those funds. There may be criminal indictments (if there is even any law at that point) but the money will be gone.
How difficult would it be to sell physical gold if you needed to and how would you do so?
What I just bought is more like a collectible, so I don't intend to sell.
Generally speaking though, you can easily sell it to gold dealers locally and/or on the 'net.
anoop wrote: ↑Sun Oct 17, 2021 12:03 am
I just bought my first 1 oz of physical gold (uncirculated) from the US Mint.
I would feel comfortable owning physical if I knew how to store it safely. I'm not sure I can trust the ETFs or the online sites. We could wake up one morning and be told the gold is just not there, and there's nothing backing those funds. There may be criminal indictments (if there is even any law at that point) but the money will be gone.
How difficult would it be to sell physical gold if you needed to and how would you do so?
What I just bought is more like a collectible, so I don't intend to sell.
Generally speaking though, you can easily sell it to gold dealers locally and/or on the 'net.
Don't they only pay well below fair market value? I am not being a smart ass I don't know for sure. I would be concerned about paying full market value when acquiring physical gold and then if I had to sell, selling below fair market value.
anoop wrote: ↑Sun Oct 17, 2021 12:03 am
I just bought my first 1 oz of physical gold (uncirculated) from the US Mint.
I would feel comfortable owning physical if I knew how to store it safely. I'm not sure I can trust the ETFs or the online sites. We could wake up one morning and be told the gold is just not there, and there's nothing backing those funds. There may be criminal indictments (if there is even any law at that point) but the money will be gone.
How difficult would it be to sell physical gold if you needed to and how would you do so?
What I just bought is more like a collectible, so I don't intend to sell.
Generally speaking though, you can easily sell it to gold dealers locally and/or on the 'net.
Don't they only pay well below fair market value? I am not being a smart ass I don't know for sure. I would be concerned about paying full market value when acquiring physical gold and then if I had to sell, selling below fair market value.
I didn't think it was that bad, but I haven't explored it. I was under the impression that between buying & selling premiums, the loss would be < 10%.
Every year my father buys all of his grandchildren gold coins for Christmas. Some of his grandchildren are 25+ years old, and they haven't sold any of the gold. The value of the gold has gone up considerably. I'm sure shares of some tech stock would have been a better gift, but there's something about the physical coins. Tonight...tomorrow....all of our screens could go dark. 1's and 0's stop blinking. Its nice to have a little physical gold. As far as how much I own....its never enough...
cableguy wrote: ↑Tue Oct 19, 2021 6:12 pm
Every year my father buys all of his grandchildren gold coins for Christmas. Some of his grandchildren are 25+ years old, and they haven't sold any of the gold. The value of the gold has gone up considerably. I'm sure shares of some tech stock would have been a better gift, but there's something about the physical coins. Tonight...tomorrow....all of our screens could go dark. 1's and 0's stop blinking. Its nice to have a little physical gold. As far as how much I own....its never enough...
If 1's and 0's stop blinking, gun and ammo and machetes and farmable land are FAR MORE valuable than gold. Good thing, I have a bit of everything and that's diversification at work.
TomatoTomahto wrote: ↑Thu Jul 29, 2021 11:50 am... Food, however, is something that we still rely on others for, and in a pinch, I would have used silver if the farmers around me would not accept cash (which we also had a good stash of).
This is not an argument against your approach, but a question of how it works. If you have silver bullion, how do you convert that to food? Scrape off a corner of an ingot? Isn't that why coins have ridges, because people used to do that when they were precious metals?
TomatoTomahto wrote: ↑Thu Jul 29, 2021 11:50 am... Food, however, is something that we still rely on others for, and in a pinch, I would have used silver if the farmers around me would not accept cash (which we also had a good stash of).
This is not an argument against your approach, but a question of how it works. If you have silver bullion, how do you convert that to food? Scrape off a corner of an ingot? Isn't that why coins have ridges, because people used to do that when they were precious metals?
Gold / silver coins are malleable enough to be cut into fractional pieces with an xacto knife.
000 wrote: ↑Tue Oct 19, 2021 6:57 pmGold / silver coins are malleable enough to be cut into fractional pieces with an xacto knife.
There's also something like the combibar.
I understand but is the expectation that some farmer is going to break out a Mettler scale at an outdoor market? I'm honestly curious as to how the transaction is supported to take place.