Do People still buy Gold/Silver as an investment?

braddick

I know Gold, and to a lesser extent, silver, was a hot commodity back in the late seventies, early eighties.
Do people still buy it as in investment?
Or, is it mostly now just used as a hedge against inflation?

Higashiyama

Braddick --

That is an interesting and valid distinction -- ie, buy as a hedge against inflation versus as an investment.

I think some people are still buying gold as an investment, although I think investors generally feel there is more leverage in buying gold stocks.

In Japan, there has been a major increase in purchases of gold, definitely not as an inflation hedge -- we are in a deflationary situation here -- but as a hedge against disaster -- bank failures, etc. In that sense, Japanese purchases are a kind of alternative investment purchased by people frustrated with options for yen bases investments.

wingedliberty

At under $5 /oz, silver is a bargain. I have alot of silver bars. I prefer the 10 oz bars.
Silver has tremendous demand is all sectors of the economy including seminconductors and dental.
Also the worldwide supply of silver is small compared to demand.

Brian.

Russ

I keep a small % of my investments in silver in the form of, you guessed it, rolls of '64 Kennedy halves.

Russ, NCNE

dan1ecu

Braddick – I personally buy gold coins as part of a type set, but I also consider my coin collection as part of my asset allocation (i.e., x% stocks, x% bonds, x% rare coins/gold). I think it’s good to spread money around because nobody knows what’s going to perform best over time. I wouldn’t have too much of my total wealth invested in gold because historically, gold has not been a good investment compared to stocks and bonds. Gold doesn’t pay dividends. It costs money to store it safely. There’s also no guarantee that someone will offer you a good price when you go to sell. I guess I consider my gold purchases a hobby first, investment second.

Dan

michael

most/lots and lots buy gold and silver as an investment

roadrunner

With the current downturn in paper financial instruments expect gold to be a player again. It's been 22 years since the last time it did this. People are shifting some of their savings into gold and commodities. Everything is a speculation though from Disney stock to beany babies. Investment should be replaced by the word "speculation."

roadrunner

numobri

It seem to me that investing(speculating) in GOLD,is like betting that the economy is going to crash.If you think the crash is comming soon,BUY.Silver,seems like a good buy, because of demand.Yes,I think some people think the crash is comming.

RNCHSN

I buy gold and silver coins because I like them. I buy gold and silver bars when I get the occaisional good deal on them, or someone wants one of my coins and has silver/gold to trade for them.

Ron

joemon2

I view gold/silver ownership as an insurance policy. Really don't think it is a good investment.

copperhead

I personally do coins for the joy of collecting and I just plain enjoy the hobby. However I do feel coins, both silver and gold are a good investment if you buy wisely.
AL

IrishMike

In 1981 I sold krugerrands, maple leafs and Mexican pesos to clients at the bank. They sold primarily in the $300-$330 range, therefore you could have purchased all 3 for around a grand. If you had instead put the money in CD's the value of the investment today would be around 4 grand, you can still buy all three gold coins for a grand. If instead you invested it in a mutual fund or blue chips, the value would even be greater today. People were scared into gold and other metals by the inflation cycles of the 70's. The only value I see is to hide cash. Silver reacted the same way, plus the Hunt brothers fiasco.

Coinmonger

Buying physical gold and silver is not an investment as much as it is an alternative store of value. I view it as kind of an insurance policy against a financial or currency meltdown.

Gold has historically held its value - through thick and thin.

Russ

<< <i>Gold has historically held its value - through thick and thin. >>



I think you need to re-read IrishMike's post. On an inflation adjusted basis, gold has been a terrible investment over the last two decades. In other words, it has not held it's value where it really counts - purchasing power. The gold bugs always seem to ignore a few key economic factors that are vitally important when building a long-term portfolio.

As you mentioned, metals are an insurance policy, nothing more. As a percentage of our expenses, how much do we spend on insurance? Not much.

Russ, NCNE

lathmach

<< <i>It seem to me that investing(speculating) in GOLD,is like betting that the economy is going to crash.If you think the crash is comming soon,BUY.Silver,seems like a good buy, because of demand.Yes,I think some people think the crash is comming. >>



Just what planet do you live on?
The economy has crashed.
We have been in full blown recession for more than a year and a half, with manufacturing in economic depression. ( I own a machine shop. I'm down from 36 employees to "0" employees. Only myself amd son and daughter now working in the shop.)

Ray

coynclecter

A year or so ago I bought gold bullion coins at 268 per ounce. I also bought MS64 Indian eagles and MS63 Indian half eagles. I just sold off some at Long Beach. I made $50 per ounce on the bullion and lost 10% on the PCGS graded Indians. For one, the sheet on the generic gold went down while bullion prices were rising, for two the margin on gold was about 3-5% and the buy /sell hit on the eagles was closer to 15%.

Long term theres good arguement why gold should skyrocket and good argument why its no longer a viable investment. I still keep some but wouldn't gamble the entire retirement fund on it.

keets

to answer the question as posed, i think people DO still buy gold/silver as an investment. piggy-backed on that and what most have directed there responses to is the wisdom in doing that.

russ seems to have summed up my feeling that unless you can buy really low and sell really high in a short period of time, you'll get killed in the long haul by inflation. i think that world government has an advantage in keeping the price of gold at a relatively constant level. i really don't get too wrapped up in all the economic B/S, but from that standpoint it seems we ought to just go back to the old gold standard where the store of value was in the actual coinage that countries produced. today the value of anything seems to be in worthless paper and constantly shifting wire transfers. it seems that eventually the house of cards will fall.

al h.

Coinmonger

Russ

I did read Irishmikes post. He didn't tell me anything I didn't already know.



As I stated - I said it was a solid store of value (And it is).

A terrible investment? Yes - Long term. But still better value than the SM over the past two years.

It would be prudent for anyone to have a modest amount Physical Gold and/or Silver in their portfolio.

roadrunner

Gold was a poor investment from '82 on because the feds and the central banks decided to keep it that way.
The economics weren't there for a bull market in gold. The times are changing now that the house of cards is beginning to tumble. Gold works in times of uncertainty as a hedge or insurance policy against currencies.
Once this economy rights itself and stocks offer good value again, the reason to own gold will have past.
But for right now, gold is looking much better than anything else for JQ Public.

roadrunner

littlewicher

I buy gold and silver bars whenever I get a good deal on them. I don't buy them for investment purposes, but rather as an insurance policy like many other members here. In case the coin market went to crap, I would always still have the bullion that should retain its value.

wallstreetman

Anyone who says GOLD doesnt have the purchasing power it had in the past is a FOOL(Dont compare the spikes to be fair)!

Higashiyama

WSM -- please elaborate.

IrishMike

I guess I rush in where others dare not. I am a FOOL. WSM please elaborate how you came up with your lastest and greatest contribution to these boards?

Coinmonger

Argentine Peso VS Gold

I wonder if the Argentinians think Gold is not a good store of value...