Investing in gold and silver

[Chargered]

OK, I need an education....

Is this a good idea?
What are the advantages/disadvantages?
What's a good amount to buy?
Do you take possession of the metal or just get a certificate saying you own it?

Thanks in advance.

In my opinion, No, it is not a good idea or a good investment. Gold/Silver doesn't produce anything, it doesn't generate income. Your buying gold coins or bullion that is just going to sit there and not do anything, your only hoping that it might increase in value. That is Not investing. You want to put your money to work for you. Invest your money in something that generates income or economic activity. Invest in something that generates actual income or is used to generate business growth, bonds, real estate, stocks. Keep it simple and put your money in a no-load low cost index mutual fund. Vanguard Total Stock Market Index or Vanguard S&P 500 Index. You'll be far better off 20 years from now rather than stashing your money in some yellow rocks that don't do anything.

 

[Hey-O]

In my opinion, No, it is not a good idea or a good investment. Gold/Silver doesn't produce anything, it doesn't generate income. Your buying gold coins or bullion that is just going to sit there and not do anything, your only hoping that it might increase in value. That is Not investing. You want to put your money to work for you. Invest your money in something that generates income or economic activity. Invest in something that generates actual income or is used to generate business growth, bonds, real estate, stocks. Keep it simple and put your money in a no-load low cost index mutual fund. Vanguard Total Stock Market Index or Vanguard S&P 500 Index. You'll be far better off 20 years from now rather than stashing your money in some yellow rocks that don't do anything.

Remember, they're betting on the world ending, not investing. You have it figured out.

 

[Imperial One]

Remember, they're betting on the world ending, not investing. You have it figured out.

No, they are HEDGING THEIR BETS buy allocating a small portion of their net worth to an insurance policy.

And, FWIW, investments in royalty funds and managers DO produce income (Sprott, PAAS etc). Again, recommend only a small portion of net worth.

 

[Hey-O]

My wife and I both have gold jewelry worth thousands in gold value. That can at least be used and enjoyed. Just my opinion

 

[Hey-O]

My EX wife has thousands in gold and jewelry that I bought too....LOL

Which one was a bad investment!!! LOL

 

[NJRR]

You should have a diversified portfolio based upon your financial situation and investment goals. Gold and silver can be a part of that. But as others mentioned, bullion doesn't produce any income but just appreciates or depreciates over time. Investing in ETF's or mining stocks is just another stock investment that should be considered as part of your investment portfolio. One good way of investing in gold is jewelry which can be worn and appreciated while holding (or losing) its value. As others have mentioned, depending on your view of the future of the country, a good investment is also guns and ammunition. In the current climate and in the future, I believe, shortages of ammunition will be a way to implement gun control (a gun without ammo is just a hunk of metal). Ammo prices have skyrocketed over the last year and it's hard to find. There is value in many things of our daily lives. You can't invest in everything but you can chose areas of investment that serve multiple purposes besides just an ROI.

 

[Pistol Pete]

Junk silver (pre 1965 coins). See reply #57 in this thread for details.

Gotcha. I thought "junk silver" was Grandma's beat up candle sticks.

 

[Lazerwolf]

I recently started buying silver from a reputable local dealer and online site. When I have a few hundred dollars extra, I'll buy 1, 5 or 10 ounce bars. I just make sure I buy enough to get free shipping to not increase cost. I like the bars, since as mentioned a few times before, I'm not paying extra for a special minted coin. Obviously, I just buy the standard Mint bars not special edition ones. Maybe I'm just too precautious, but I don't like the fact of paying for a slip of paper that says I have X amount of silver that someone else is holding on to. To me it's more of a hobby that I hope pays off, but I'm not going to sell every time the silver goes up a few cents. I would probably do it differently if I was doing it as an investment.

 

[BDF6]

A diverse portfolio is a good thing. Here is another perspective to consider.

 

[MoparLeo]

Bars are easily faked. So if you decide you want to sell a bar the buyer will want to test it, weigh it, verify it etc... harder to unload than a US gov. minted coin like a dime, quarter, 1/2 dollar or Silver dollar. They have an obvious face value, easily recognized by anyone. More trusted than a bar of any metal. Better to have a Maple Leaf or American Eagle than a generic silver slug. Unmarked bullion has a lower premium but that is not because it is worth less by weight but is not as liquid as a coin that is also legitimate currency.
Ingots like $500. bills were to make holding large amounts of value in a smaller package. OK for storage but harder to spend.
I had most of my money in stocks and bonds in the eighties and nineties until 2008. All the gains I made in the previous 10 years were gone in 10 days. Metals never do that. I took the remainder and bought lots of Silver in 1 oz. coins and a few large ingots. Put the rest in tenth, quarter and 1 oz. Gold Eagles and Maple Leaf's. The wife put hers into Annuities.
The last 4 years she out performed me, but the next 4 years should be great for metals as the the Democrats will put the printing presses into overdrive as soon as they can and the dollar will fall.
Dollar down=metals up.

 

[67charger383]

I'd rather have gold that goes fast than gold that collects dust in a safe.

 

[Chargered]

The S&P bottomed out at around 735 in February 2009 from the housing market crash. Anyone who sold during that time period made a huge mistake. The market recovered quickly and is at about 3750 now. Yes, that is a 510% gain since that market bottom. Lesson learned: never bet against the American economy.

 

[YY1]

I had most of my money in stocks and bonds in the eighties and nineties until 2008. All the gains I made in the previous 10 years were gone in 10 days.
Dollar down=metals up.

Sounds like you made the mistake most people make- selling when the bottom drops out.

The only "market timing" I embrace is- when the bottom falls, I buy, buy, BUY. As much as I can.

Had you done that during the "great recession" you'd have more than made your losses back.

There was another guy on this board that actually shared his decision to "sell it all" and cash out his 401K right at the low point of the recent what I call "the tank".

We tried to warn him.....

95% of my paper loss is back and what I bought is up 30%.

 

[68BabyBlue]

The S&P bottomed out at around 735 in February 2009 from the housing market crash. Anyone who sold during that time period made a huge mistake. The market recovered quickly and is at about 3750 now. Yes, that is a 510% gain since that market bottom. Lesson learned: never bet against the American economy.

I have a close friend who worked as a maintenance guy for 38 years in a steel mill I haul out of. Sort of an idiot savant in that he invested 100% of his 401(k) contributions in Vanguard US stock market index funds from day one. Never thought of hedging, volatility, or "risk." Showed me his quarterly statements before and after the 2009 trough. He lost about 200K on paper, but never blinked, never moved anything. He retired in 2016 with $1.2 million. This was a guy who never made over $80K in a good year, never made any other investments.

 

[Chargered]

I have a close friend who worked as a maintenance guy for 38 years in a steel mill I haul out of. Sort of an idiot savant in that he invested 100% of his 401(k) contributions in Vanguard US stock market index funds from day one. Never thought of hedging, volatility, or "risk." Showed me his quarterly statements before and after the 2009 trough. He lost about 200K on paper, but never blinked, never moved anything. He retired in 2016 with $1.2 million. This was a guy who never made over $80K in a good year, never made any other investments.

Exactly. The market isn't for the faint of heart. If you are risk adverse its not for you. Its also not for short term investing, you have to have a long term horizon. Its best if you start young in your early 20s and stay with it for the long haul through the ups and downs, taking advantage of the compounding. If you wait until your 50s, 60s, 70s, you sort of missed your opportunity to really make a lot of money.

 

[Hey-O]

I have a close friend who worked as a maintenance guy for 38 years in a steel mill I haul out of. Sort of an idiot savant in that he invested 100% of his 401(k) contributions in Vanguard US stock market index funds from day one. Never thought of hedging, volatility, or "risk." Showed me his quarterly statements before and after the 2009 trough. He lost about 200K on paper, but never blinked, never moved anything. He retired in 2016 with $1.2 million. This was a guy who never made over $80K in a good year, never made any other investments.

I did the same thing, but, used 60% ICA. Vanguard is a great product to use. Many companies offer it as an option in their 401k's. Hard to go wrong. He's is now sitting on about 1.5 to 1.6.

 

[Chargered]

I did the same thing, but, used 60% ICA. Vanguard is a great product to use. Many companies offer it as an option in their 401k's. Hard to go wrong. He's is now sitting on about 1.5 to 1.6.

Ya, and once you get up into that range, it doesn't take long at all to double it. You really start making some serious money at that point if you still have some more time on your horizon.

 

[chtampa]

A little boy and a girl were standing and talking about what they have and he shows her his gold coin. She shows her bullet and says with this I can get all those I want. In a collapse money will be worthless. Skills are the only thing of value.

 

[Hey-O]

Exactly. The market isn't for the faint of heart. If you are risk adverse its not for you. Its also not for short term investing, you have to have a long term horizon. Its best if you start young in your early 20s and stay with it for the long haul through the ups and downs, taking advantage of the compounding. If you wait until your 50s, 60s, 70s, you sort of missed your opportunity to really make a lot of money.

Well said!! There are two kinds of people , savers and investors. I started at 22 and compound interest is your best friend. I have one IRA that I used as an example for the kids and their friends to entice them into investing. I put 2500 dollars in it at 22 and never touched it again. It's worth about 70 thousand today.

 

[68BabyBlue]

My wife has a younger brother who is the polar opposite of a buy and hold type. He had the mixed blessing of being born with extremely high analytical intelligence, but no common sense. Was accepted to Harvard, but walked away after doing a summer internship and not liking the culture. He's worked his entire career as an accountant, earning big bucks from the corporate world, including a stint with his own firm. He needs action, and likes to think he can time markets. He went bankrupt in the 90s, under ideal economic conditions. He is in his late 50s, and has a net worth that barely exceeds his annual income. He is fortunate to have high earning capability. Until he doesn't.