gold or silver? for 3 year investment
ERRORBOY
Posts: 66
Im young and am looking to buy either silver or gold. im just not sure which is the better buy? im planning to hold on to it for 3 years at least. (then ill be going to college) or maybe even longer. so my question is with prices how they are what would you consider the better buy if you where to be holding on to it for at least 3 years?
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Comments
If you make small purchases on a regular basis, it adds up over a 3-year window. Ideally you'd make your purchases all of the same item, i.e., all 90% dimes, or all Silver Eagles, or all 1 oz silver bars. The reason is that when you sell, it will be better to sell a batch of uniform units all together in one lump, and it might enhance your selling position. That may not be practical, but that's just a suggestion.
If I were in your position, I'd favor silver because it would be easier to make smaller buys on a regular basis.
I knew it would happen.
roadrunner
A more compelling answer, for sure!
I knew it would happen.
The history is there for a repeat, weve moved from the 71 to 1 to the most recent weeks 30-44 to 1 range on its way to the teens again.
<< <i>History suggests the gold to silver ratio could once again retest the 16-25 level or lower. That favors silver over gold by 2-1 to 3-1.
A more compelling answer, for sure!
If you want to bet on the ratio wouldn't it make more sense to buy silver and short gold?
That's essentially the same bet, except that shorting gold implies going out on a margin limb. No need for that.
In my own case, I'm intent on adding some platinum and buying some more the the Mint's instant rarities when they become more obvious. I don't really track the gold/platinum ratio history, but I have a feeling it favors platinum somewhat at the moment.
I knew it would happen.
<< <i>
<< <i>History suggests the gold to silver ratio could once again retest the 16-25 level or lower. That favors silver over gold by 2-1 to 3-1.
A more compelling answer, for sure!
If you want to bet on the ratio wouldn't it make more sense to buy silver and short gold? >>
Shorting gold would certainly bite into those silver gains. And if the monetary system should suffer a massive jolt, gold could easily blow away silver in a short term
deleveraging event that could crush that gold short. The safest bet is holding the metal or metals.
roadrunner
Save all purchase receipts, be aware that profit on PMs is taxed at 28%. If your purchases are to be used for college tuition look into a Coverdell education account and it's tax advantages. If this is the case then you can purchase silver ETFs, mining stocks with a Coverdell brokerage account and enjoy tax breaks. Check IRS website for account information.
Premiums (upcharge on spot price) will vary based on what type of silver you buy. Premiums are higher on items in higher demand (better resell). I prefer silver eagles. Buying in bulk from a reputable dealer like tulving.com will reduce your costs.
Storage is a concern, any quantity of silver is too bulky to justify the expense of safe deposit boxes. Look into a good gun safe. Do not brag or advertise to friends that you are storing silver. When it come to storage expense gold wins out because a lot of dollars in gold can be stored in a small safe deposit box.
You have to stay up to date on events that affect the value of your investment and you have to learn not to panic on price drops. To be able to buy on the "dips" you need to be able to recognize them, knowledge is everything when it comes to investing.
the long term outlook for silver is great and will remain that way because of the added industrial demand and shrinking supply. Be aware that PMs prices are being driven by bad economic outlook, so study the economy. Avoid mainstream television business shows to do this.
Read, read, read and then read more. The PM forum is a good source of info and opinion, but be prepared for discussion outside the topic of any question you might ask.
start reading here
"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>Im young and am looking to buy either silver or gold. im just not sure which is the better buy? im planning to hold on to it for 3 years at least. (then ill be going to college) or maybe even longer. so my question is with prices how they are what would you consider the better buy if you where to be holding on to it for at least 3 years? >>
When I was about your age I bought 2 100 oz silver bars. I should have bought MSFT instead.
Knowledge is the enemy of fear
There's probably some 25 yr old's today that were saying the same thing about Enron stock back in 1999, that they wished they had bought Enron instead of dumb silver.
The 1980's and 1990's wasn't kind to silver. Since then a totally different story. Does our current business environment offer the same opportunities across the board as
the 1982-1985 era did when MS flourished? If that environment exists today it's probably on a different continent. 3 yr time line for silver from here should have the
opportunity to do very well.
When I was boy in my pre-teens and teens I owned stock in Pennzoil and Aetna (late 60's). I should have bought silver! I saw those stocks do nothing from 1966 to 1982
and essentially nothing from 1966-1987. Certainly the time period one is raised in makes a huge difference in how they look at different asset classes for the rest of their
lives.
roadrunner
I knew it would happen.
<< <i>
<< <i>Im young and am looking to buy either silver or gold. im just not sure which is the better buy? im planning to hold on to it for 3 years at least. (then ill be going to college) or maybe even longer. so my question is with prices how they are what would you consider the better buy if you where to be holding on to it for at least 3 years? >>
When I was about your age I bought 2 100 oz silver bars. I should have bought MSFT instead. >>
Hey at least the silver eventually went up. With my instincts, I would have bought Commodore (makers of the C64 computer) or Coleco (makers of the Adam), both went belly up. I worked with a young guy that did go "all-in" on Coleco. He bought on margin and when the margin call came, he borrowed money from his mom to meet the margin call. Eventually, he lost all his margin account, and still owed money to mom. He had to scrimp and save and never go out for a couple of years before he could pay back his mom.
I also have a MSFT story. I worked with several people that went to work there during the salad days. The first was hired in 1987 and made big money, tens of millions on his stock options and is one of the richest people I ever met personally, probably worth $30m to $50m. The second went later and was bored by his job. After a few years, he sent out an email, telling everyone at work that he hated his job and was going to quit to become a stand-up comedian. He had about $250k in MSFT stock at the time, and cashed out. Had he waited two more years, MSFT would go up more than ten fold and he would have been set for life had he just waited for two more years.
As for silver and gold, I'm not too keen on them at this stage of the market. Both are likely to go higher, but the ride is going to be bumpy. A lot of the late comers will not get out, many are going to ride it all the way down when the worm turns. TV personalities Suzy Orman, and Jim Cramer are recommending gold, so gold is getting to be a very popular place to be.
In a similar vein to your MSFT story, my ex-wife's cousin was a co-founder of MSTR (Microstrategy). He had 1 million shares when I met him at a wedding in 2000. He was about 3 years older than I and "worth" about a 1/3rd of a BILLION at the time. I was in awe. Last I knew he had left the company to travel the world and cashed out about 1% of his holdings--$20 milllion or so. 18 months after I met him, his remaining 990,000 shares were worth less than the 10,000 he had sold. I have no idea what he is doing now.
I think the common theme expressed to the OP in various comments, is that every investment class goes through cycles. All can be dogs for decades while offering stellar performance other times. Even the Japanese stockmarket while falling from 39,000 to 9,000 over the last 20 years has had more than 5 rallies of approx. 50%, including a 140% rally, over the last 15 years.
To answer Roadrunner, it is not important what current conditions are, but rather future. The 2 questions that need to be answered are A.--Will conditions stay the same or get better/worse, and B.-- Do current prices reflect conditions remaining the same or changing for better or worse?
Knowledge is the enemy of fear
The next 3 yrs should offer a very challenging business environment unlike the "easier" conditions we've seen for the past 3 yrs. Just sayin'.
The PM trade is certainly more crowded than it was a few years ago but the public is just starting to catch on. The mania stage has not yet showed its head.
I finally unloaded my shares of Pennzoil and Aetna in January 1988 following the Oct 1987 crash. I had seen enough in 20 yrs of poor performance to last a lifetime.
Fortunately, the coin market was just about ready to take off in 1987.
roadrunner
I think Silver still has some room in the next 3 years
Steve
I would own about 1,400 ounces of silver now
Looking back, there was never a time I couldn't have forgotten the cost of an ounce of silver in a week
Of course, most of that time, silver was inexpensive compared to today, in a hours worked to ounce cost comparison (some quick recolections shows me it has varied from less than a 1/3rd of an hour to about an hour)
But still ...
something to ponder
“We are only their care-takers,” he posed, “if we take good care of them, then centuries from now they may still be here … ”
Todd - BHNC #242
Neither. WAY too long to hold either when both are near record highs.
Gold & Silver = AMAP!
<< <i>So you REALLY think the mess the world in gonna be solved in 3 years?
Gold & Silver = AMAP! >>
As things get worse so will their efforts to discourage running to metals. As more people see the real value of what they want you investing in (Wall St.) "their" only recourse is to hammer the value of the alternatives.
"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>In 3 years, we will be well into a new Presidency imo. Why can't things get better in that time when they've gotten so worse in that timeframe? It aint the end of the world folks. >>
Same puppetmasters, different puppet. It's a matter of who is pulling the strings, not what is dangling at the other end.
"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
From 1980 to 2000 was an awful time to own Gold and/or silver and was a great time to own stocks.
From 2000 to (probably) 2020 is a great time to own Precious metals and a terrible time to own stocks.
As far as picking out whether or not to buy silver or gold, it really doesn't matter. Just buy some!!
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
Long term fixes is what I want to see
another solid truth derryb
“We are only their care-takers,” he posed, “if we take good care of them, then centuries from now they may still be here … ”
Todd - BHNC #242
If silver happens to hit $100-$135 in the next 12 months, one certainly has the choice to cash out early and move into something else.
Intermediate, long, and very long term economic cycles (6, 10, 30, 60, 120 yr) are all bottoming in unison over the next 3 yrs. Once this
fall rolls on buy there won't really even be short term cycles remaining to help boost markets again like they have the past few years.
This is where PM's should be really worth their "mettle."
roadrunner
So the question is which is more likely?
Experience the World through Numismatics...it's more than you can imagine.
<< <i>Just remember percentage gains- if silver goes from where it is today... just under $43 to 100, that would be a huge percentage gain and gold would have to go over $4000 to match that.
So the question is which is more likely? >>
I don't think either are likely. As for the long haul, I think they both will appreciate at about the same percentage rate.
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
You can buy it in small amounts over time and get out of it in small amounts over time.
My Adolph A. Weinman signature
