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Is Bullion a good investment???????
StampCoinGuy777
Posts: 51 ✭✭
Hi Collectors,
I have a question, is bullion a good investment or is getting rare US coins a better investment? Gold and silver is always all over the place in price. My question is, if i would save my gold and silver, would it go up in value in the future? I know getting rare us coins is a good investment but I don't know about bullion. Thanks Noah
I LOVE old coins.
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Well, depends.......
Thats about all I know...!
All the folks here who know the answer to that have left, and are on their yachts in the Bahamas.
Here's a warning parable for coin collectors...
No, no, and no.
"Seu cabra da peste,
"Sou Mangueira......."
Neither is a good investment IMO for different reasons. If you’re looking for a good investment look into real estate or stocks etc. which is income producing as opposed to Coins or bullion.
Check the 5 year chart on Silver. that may answer your question
Bob
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one viewpoint
https://advantagegold.com/resources/gold-vs-the-sp-500-1984-2016/
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@BobSav Also check the 40 year chart!!! lol
Yep your right hindsight makes everybody an expert.
Do you have any current investment that you started 40 years ago. ?
Bob
Lordmarcovan, WTCG, YogiBerraFan, Phoenin21, LindeDad, Coll3ctor, blue594, robkoll, Mike Dixon, BloodMan, Flakthat and others.
Your not specific about your investment type? If it's for retirement-no
If for speculation and a rainy day fund in about 10-20 years go for it.
And I would do AGE's.
I think the better question is which would be a better investment? Bullion or rare US coins. I would definitely like to know dollar for dollar which will grow at a higher percentage over the next 30-40 years (assuming both go up). As much as I'm enjoying sourcing and purchasing collectable coins, who knows what the market will look like 30 years from now. I'm in my early 30s and everyone I know who is my age could care less about coins and likely never will. Less demand = lower price.
Bullion can be a good investment at times, but you have to ask yourself
“ Relative to what?”
It is possible to monitor the relative strength of multiple asset classes. Whether comparing investments or football teams, something is almost always stronger than the rest. You just have to understand how to compare them. Then invest accordingly based on that and your time horizon and risk tolerance.
Bullion is not an investment. To make a long story short, it is a store of value and can be used as a speculation, that's it.
Sure, if you think silver is rising to $47 again.
Are you maxed out on your 401 contribution?
Do you have a well diversified portfolio?
Do you have six months of living expenses in a rainy day fund?
Do you pay your credit card balances monthly?
If the answer to all of the above is yes, then you might consider buying bullion.
If the bullion you buy comprises more than 10% of your otherwise diversified portfolio, then you are speculating.
My Dad's 40 year investment in silver coin did five times compared to what he paid for it. That was right in line with how our paper currency depreciated, in real purchasing power terms, over those same forty years.
Hold physical gold and silver bullion and junk silver as long-term "savings" or as a "insurance" hedge against our paper money going to crap, not as a short or medium term "investment". Don't expect to hit a real home run in real purchasing power terms by buying physical. If you do get way ahead, times are likely to be hectic or chaotic (or there may even be a "hot" War) and you will be faced with the very difficult decision whether or not to go back to paper when times are quite uncertain.
Short term speculation can be done on paper without the need to hold the physical metal.
Put 10% of your portfolio in precious metals and pray like crazy that they go down, down, down. PMs tend to do well when everything else is tanking.
I intend no offense with the rest of my comments...... When it comes to rare coins, the people who are likely to make money are not the type of people who are asking these questions. These types have acquired a lifetime of knowledge and experience at a real price. Novices are babes in the woods in comparison. The vast majority of those who play with rare coins pay for the opportunity to do so.
Yikes! That's 4.6% annualized.
Yes it’s beating numismatic coins as fewer collectors having dampening effect on many numismatic issues - these will continue slide in my view.
Do you have a crystal ball or perhaps a time machine ....????
Have I made money playing with bullion ?
Absolutely !
Have I ever lost money playing with bullion ?
Of course......
I've been very fortunate however, that my outcome has usually been the former......
Check the 5 year chart on silver
Yes, check the 40 and 60 year charts for gold and silver, and on the same graphs, compare the charts for % returns on stocks, bonds, coastal, inland, residential and commercial real estate, and other asset classes such as cars, collectibles, art, antiques, etc.
Best argument for diversification and periodic rebalancing there is, IMO
Liberty: Parent of Science & Industry
To me it's speculation not investing. I can't explain it.
I like to think of collecting as a hobby. It defiantly is not an investment.
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Buy low Sell High
Only if it goes up
mark
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
...and the ones that didn't are circling the Bermuda Triangle.
Which often ends up being, "buy high, sell higher."
Are you saving for retirement or stockpiling for the apocalypse?
It all depends on your goals and purposes.
I suspect that neither is a good idea as the cornerstone of a retirement plan, but each has its place. If you want a hobby to spend your mad money on, quality coins are better than a lot of things that don't hold their value as well. If you want some pretty things to look at that will also be useful if North Korea launches some nukes, stack some bullion.
JMHO, not meant as investment advice.
I've dabbled in bullion and coin collecting (not rare coins), and have never realized a profit. Its a fun habit or hobby. Stocks and real estate have paid off quite well (so far).
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rare coins and bullion are like anything---some people have made fortunes, other lost fortunes and everywhere in between. Same can be said for stocks. I think purely as an investment, stocks are "easier" in that you can pick an index fund and generally do pretty well without much study. However, there are some very savy coin collectors who have done extremely well but I dare so they put a lot of time, effort, dedication and self discipline into it.
You ask what seems to be a short, simple question. But, it's neither.
Investments are things that grow or improve in value of which stocks (a piece of a business), bonds (lending money to an entity that will pay you back with interest), and real estate (income producing) are examples. All have risks involved (companies fail, interest rates fluctuate, property burns down etc, which all have an effect on the return of your investment). However, the idea is that you are obtaining something that grows your wealth.
Speculation comes into play for things where you are betting someone will pay more for it later. Futures contracts. Bullion price swings. Bitcoin. Tulip bulbs. Collectibles might even fit this category. You pay your money and speculate that things will be worth more when it's time to sell.
Some speculation can fit as part of overall money management or portfolio, but know the difference. All investments are a bit of a risk--anything can fail, but look at what underlies the generation of price increase. Is it a growing company, a cash flow positive duplex, or is it a guess on a price swing?
Savings vehicles are things that store wealth. Sadly, the problem here is inflation and the fiat nature of cash. Short term cash reserves do function as a way to manipulate your funds and store your work as a medium of exchange, but long term the value is eroded. Bullion can act as a store of wealth as there is generally some relative value of it compared to 'real goods', however there is enough fluctuation that it is not a perfect store either. There are thousands of years of human history and billions of people in the world today that give bullion 'value', but it's a moving target at times.
That said, and as pointed out above, bullion does have a role in an overall investment portfolio as it does represent a store of value that can fluctuate out of step to the performance of your savings, or the value of some of your investments. As part of an overall wealth management strategy bullion can have a role.
Collectibles happen to be a luxury item where one can speculate on future price increases. You write that you know getting rare us coins is a good investment. But is it?
The reason they have value is that they are desirable to people who have discretionary income. If the collector base dies off, loses interest, or loses its ability to pay (middle class on up depending on your perspective), well you might see that those lofty prices slump.
Sure collectibles can go up in value but so do GI Joes, comic books, sports cards, Beanie Babies etc. How's the stamp market going these days? Flintstone toys? Nothing is guaranteed to stay popular or always increase in value. At least with art you can decorate your house and with wine you can drink your collection.
So, if you want to collect something do so, but try not to think of it as an 'investment'. Maybe you are less likely to lose money (??? depending on what you choose to collect) than if you 'invest' in a car, a diamond ring, new furniture etc. Anyone who tries to sell you something by calling it an investment should make you do a due diligence check on what their motive is. Any of those are fine to buy and can improve you quality of life, but they are not investments. Perhaps part of your net worth, but not an investment.
Buy bullion because either you like it, it fits with your overall money management strategy, or it makes you feel better. Buy collectibles because you get enjoyment from owning them. Buy a duplex or a well diversified stock mutual fund for your IRA if you want to invest.
Gold bullion, purchased many years ago, has proven to be a good investment. Silver to a lessor extent. Real estate, in the right areas, can be a great investment. Stocks, well, certainly they can make money... and lose money.....A diversified portfolio is the best bet, started while one is young. That being said, life is a strange journey, and portfolios are subject to the effects of both personal and national events. A divorce can wipe out finances, just as a major stock crash due to many possible events. There is good, solid advice above.... read carefully, proceed with caution. Do not look at life as a continuous, straight path - there will be problems, plan ahead. Cheers, RickO
I retired at 53 without a pension by NOT investing in Bullion.
eliminating personal debt (except a mortgage) should be one's first investment. Gold should be part of a diversified portfolio. Size of the gold position should reflect one's expectations of what direction the overall economy is headed. In times of economic turmoil, gold tends to outperform.
Today's investment decisions rely less on market fundamentals and more on the massive liquidity (money!) that the Federal Reserve bank has provided to the market makers. Markets are extremely distorted and a good forecast of future FED action and its results could prove profitable.
Rampant currency debasement will be the most important investment trend of this decade, and it will devastate most people.
- Nick Giambruno Buy dollar insurance now, because the policy will cost more as the dollar becomes worth less.
I've seen silver close to $50 twice in my life, I've also seen it <$4...I collect, I don't invest. If it goes back to $4, while all the wailing and gnashing of teeth is occurring, I would try to stack 10,000 ounces, else I'll buy 3 SAEs per year to keep my date sets going and stick to coin collecting.
@au58 said:
'Are you maxed out on your 401 contribution?
Do you have a well diversified portfolio?
Do you have six months of living expenses in a rainy day fund?
Do you pay your credit card balances monthly?
If the answer to all of the above is yes, then you might consider buying bullion.
If the bullion you buy comprises more than 10% of your otherwise diversified portfolio, then you are speculating.'
That really sums it up...bullion purchases should be far down the list of planned financial moves.
K
I have a friend who saves his change. Silver change. His $22k face value in change is worth a quarter mil, now . Can’t say this about the clad coins he sticks in jars. Investments go to work for you. It (bullion) could play a major role in hedging, but investing ? I’m no counselor .
Nothing is always a good investment. You have to look for windows of opportunity.
I remember when gold was $810/oz in 1981 and $280 in 2001. Not a good track record. If you are insistent on gold buy unc $20 in 64 or better that move up and down with the spot price of gold. You may make money on the numismatic portion but most of your profit or loss is toes to the spot price.
I prefer quality stocks as the historical record is hard to beat. The Dow was 1.300 in 1982 and trying to break 25.000. All investments can move either direction but a long term track record is about as good as you will get to make your decision.
Just my opinion and experience,
Who holds gold controls his future.
Several disagree, but keep a sizable position for my own peace of mind.
And do not care if it goes up or down. It is mine and that's all I care.
Don't do it if you need a return. Do do it if you study history and doubt the mainstream information.
I will never regret holding it. But I have the other conventional assets and say to hell with "investment" considerations.
When did you retire? Gold went up every year from 2001 to 2012. It would've been kind of difficult to lose money in that environment if you just held.
ABSOLUTELY!
Provided you can buy it cheap enough and sell it high enough.
I would NOT consider either to be a "good investment". They are both speculations. The S&P 500 has gone up approximately 10% per year for 125 years. Government bonds have averaged 5-7% for 200 years. For coins to be an "investment", they need to appreciate at about 7% per year. They might, but theymight not.
And how did gold do relative to the S&P 500 or even bonds between 2001 and 2018.
And, you are cherry-picking your data. If you want to look at "Retirement investing", you need at least a 30 year window, want to look at 1981 to 2011? 1971 to 2011?
THIS! THIS! THIS!
I don't mean to be condescending but your question(s) probably need to be reworked.
Of course we want anything we invest in to go up in value. But what is the purpose of the holding?
Something to be considered:
An opportunity for profits can be made with rare coins simply by learning as much as you can about them and using that knowledge to spot a potentially underappreciated (priced low) example sitting in the marketplace. Cherrypicking is a commonly used term. It could also be categorized as arbitrage. So you get the benefit of enjoying a hobby along with the potential for good returns. This dynamic is not really present with bullion.
It Is wrong to say an investment needs to appreciate at a steady 7% to be considered as such, but in context it looks like you meant “good” investment, which is fine. An investment is literally defined as (check Merriam Webster) an asset designed to produce income or appreciate. Reading more it states “anything that investor believes will produce income or be worth more”.
Coins and bullion clearly fall into that category no matter how many people on this board say they do not. What those people really mean is “I don’t collect coins to make money” or “coins are not a good investment”, both of which are reasonable positions. Now, the answer to your original question is an unequivocal “maybe”. In the case of coins, a great deal of your return can be enhanced by knowledge. With bullion, much less so - that market is pretty efficient.
@REALGATOR
Agree with everything there. Cherry picking is information arbitrage.
bitcoin was a good investment last year