@FredJRI said:
I don't usually invest in gold.... perhaps a few ounces and less NVDA is in order?
Most of us don't consider gold an "investment"...it's a speculation....doesn't pay interest or dividends.....buy coins or bars you like and you can at least enjoy them if they don't make you money.
Why wouldn't we consider it an investment? Unless you're referring to dental gold we're not buying it to consume or use up. It doesn't deteriorate or go bad or become obsolete. It's an asset that can always be resold and have value. Sounds like an investment to me.
Any purchase you hope/expect to profit from upon resale is an investment. All else is purchased for consumption.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
@ProofCollection said:
Why wouldn't we consider it an investment? Unless you're referring to dental gold we're not buying it to consume or use up. It doesn't deteriorate or go bad or become obsolete. It's an asset that can always be resold and have value. Sounds like an investment to me.
PF, I consider it more of a SPECULATION. An investment to me has the ability to generate real growth in unit value OR pay dividends/interest. PM's like gold can't do that. They're at the mercy of future demand for a commodity product that can't differentiate itself or participate in real GDP growth under all conditions like a stock can.
It's a matter of semantics, I agree PF. But I never called gold an "investment" when dealing with clients because I didn't think that one could count on long-term growth and certainly no dividends/interest. To me it was always disaster insurance.
With coins...at least you can appreciate them like art, even if they don't appreciate.
@GoldFinger1969 said:
An investment to me has the ability to generate real growth in unit value OR pay dividends/interest. PM's like gold can't do that. They're at the mercy of future demand for a commodity product that can't differentiate itself or participate in real GDP growth under all conditions like a stock can.
Do Treasury bonds participate in real GDP growth?
I believe gold does provide real growth in unit value:
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I consider gold to be insurance against an ever-weakening dollar. Check the second line in my sig-line.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
@derryb said:
Do Treasury bonds participate in real GDP growth?
Treasuries marginally so...corporate bonds more so.
If you go back to 1928 and go through 2023 -- but you can pick other starting points or better yet, rolling time periods -- stocks are up 7000-fold.....T-Bills up 20-fold.....T-Bonds up 70-fold....Corp Bonds up 500-fold...Real Estate up 50-fold....Gold Up 100-fold.
Gold looks better than it does because the price was controlled at the starting point and suppressed for many years before rising in the 1970's to the present. Using rolling time periods, it would do very poorly as a long-term investment (better than MMFs but not better than T-Bonds+Corp Bonds in a blended bond fund).
@FredJRI said:
I don't usually invest in gold.... perhaps a few ounces and less NVDA is in order?
Most of us don't consider gold an "investment"...it's a speculation....doesn't pay interest or dividends.....buy coins or bars you like and you can at least enjoy them if they don't make you money.
Why wouldn't we consider it an investment? Unless you're referring to dental gold we're not buying it to consume or use up. It doesn't deteriorate or go bad or become obsolete. It's an asset that can always be resold and have value. Sounds like an investment to me.
Any purchase you hope/expect to profit from upon resale is an investment. All else is purchased for consumption.
Profit? In terms of what, USD? You need to change your paradigm. All you have is long and short positions because they are all relative to each other, even USD. If you have no assets but a big pile of cash, you have a 100% long US Dollar position. You could say you are invested in USD if you want because relative to any asset the value increases or decreases every day. If gold is $1000/oz and you have a $1M long USD position and gold goes down 10% to 900 USD per oz, your USD position gained 11.1% relative to gold even though you have the same number of USD in the bank and did nothing with it. So even holding USD is an investment because presumably by holding cash you are expecting the conversion rate (prices) of other assets to go down. If you don't expect prices to go down, then you should be out of cash and into assets that you expect to gain relative to USD. But unless its food, consumer good, or clothing or something that depreciates with time, it's all a long position when you buy it. Today I went long an 1893-S Morgan dollar.
@cohodk said:
So gold is a speculative insurance investment?
.
There are four basic avenues upon which to deploy the money that isn't used for lifestyle/living expenses.
Which category a specific activity goes into can depend on the original intent.
INVESTING:
This is not buying a stock in the hope that you can sell it for more later on (see next). If you buy a company with the intent of actively restructuring it and/or managing it, that is "investing". If you buy equipment for your business, that is "investing". College expenses could also be considered a form of investing (in yourself), or it could be considered a "lifestyle" thing.
SPECULATING:
Buying a commodity, physical object, or anything for the sole purpose of (hopefully) selling it for more in the future, is pure speculation. Precious metals could be considered a "speculation", but also a hedge (see below).
FINANCE:
Loaning money for the purpose of earning interest, including buying bonds, money market deposits, etc. Stocks that reliably pay dividends can also fit this category in addition to those above.
HEDGING:
To offset or neutralize your position in a market, and/or to lock in current prices for future production. A mining company might sell future production to lock in the price (which allows for accurate and easier financial planning). Or suppose you need silver to make batteries next year. You could buy now (at the current market price) and take delivery in the future without having to pay the full cost up front. Buying physical gold can also be considered a "hedge" or "insurance" against an economic failure or catastrophe of some sort.
Comments
Any purchase you hope/expect to profit from upon resale is an investment. All else is purchased for consumption.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Most of us don't consider gold an "investment".
You certainly don't speak for me.
Comsidering an investment between a stock and gold is fool's gold (no pun intended).
They shouldn't even be a consideration in your asset allocation decision.
That is your opinion................and nothing more.
I knew it would happen.
PF, I consider it more of a SPECULATION. An investment to me has the ability to generate real growth in unit value OR pay dividends/interest. PM's like gold can't do that. They're at the mercy of future demand for a commodity product that can't differentiate itself or participate in real GDP growth under all conditions like a stock can.
It's a matter of semantics, I agree PF. But I never called gold an "investment" when dealing with clients because I didn't think that one could count on long-term growth and certainly no dividends/interest. To me it was always disaster insurance.
With coins...at least you can appreciate them like art, even if they don't appreciate.
Do Treasury bonds participate in real GDP growth?
I believe gold does provide real growth in unit value:
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I consider gold to be insurance against an ever-weakening dollar. Check the second line in my sig-line.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
Treasuries marginally so...corporate bonds more so.
If you go back to 1928 and go through 2023 -- but you can pick other starting points or better yet, rolling time periods -- stocks are up 7000-fold.....T-Bills up 20-fold.....T-Bonds up 70-fold....Corp Bonds up 500-fold...Real Estate up 50-fold....Gold Up 100-fold.
Gold looks better than it does because the price was controlled at the starting point and suppressed for many years before rising in the 1970's to the present. Using rolling time periods, it would do very poorly as a long-term investment (better than MMFs but not better than T-Bonds+Corp Bonds in a blended bond fund).
Profit? In terms of what, USD? You need to change your paradigm. All you have is long and short positions because they are all relative to each other, even USD. If you have no assets but a big pile of cash, you have a 100% long US Dollar position. You could say you are invested in USD if you want because relative to any asset the value increases or decreases every day. If gold is $1000/oz and you have a $1M long USD position and gold goes down 10% to 900 USD per oz, your USD position gained 11.1% relative to gold even though you have the same number of USD in the bank and did nothing with it. So even holding USD is an investment because presumably by holding cash you are expecting the conversion rate (prices) of other assets to go down. If you don't expect prices to go down, then you should be out of cash and into assets that you expect to gain relative to USD. But unless its food, consumer good, or clothing or something that depreciates with time, it's all a long position when you buy it. Today I went long an 1893-S Morgan dollar.
So gold is a speculative insurance investment?
Knowledge is the enemy of fear
.
There are four basic avenues upon which to deploy the money that isn't used for lifestyle/living expenses.
Which category a specific activity goes into can depend on the original intent.
INVESTING:
This is not buying a stock in the hope that you can sell it for more later on (see next). If you buy a company with the intent of actively restructuring it and/or managing it, that is "investing". If you buy equipment for your business, that is "investing". College expenses could also be considered a form of investing (in yourself), or it could be considered a "lifestyle" thing.
SPECULATING:
Buying a commodity, physical object, or anything for the sole purpose of (hopefully) selling it for more in the future, is pure speculation. Precious metals could be considered a "speculation", but also a hedge (see below).
FINANCE:
Loaning money for the purpose of earning interest, including buying bonds, money market deposits, etc. Stocks that reliably pay dividends can also fit this category in addition to those above.
HEDGING:
To offset or neutralize your position in a market, and/or to lock in current prices for future production. A mining company might sell future production to lock in the price (which allows for accurate and easier financial planning). Or suppose you need silver to make batteries next year. You could buy now (at the current market price) and take delivery in the future without having to pay the full cost up front. Buying physical gold can also be considered a "hedge" or "insurance" against an economic failure or catastrophe of some sort.
.