Hard assets as a part of an investment portfolio- do you just buy generic gold/silver, or do you div

TahoeDale · March 3, 2007 3:22AM

For several years(maybe longer), some financial advisors have recommended that a truly diversified portfolio include hard assets, such as gold.

Depending on age of retirement, risk tolerance, amount of assets and all the other specifics needed to offer an opinion, what hard assets should be included?

Only generic gold, silver & platinum coins?

In what other forms? ingots, certified/raw, high grade, rare dates?

Are there any forum members who are Certified Financial Planners who give advice in this area when asked? Any actually own hard assets in their personal portfolios?

Or is everyone here just doing it on their own?

RedneckHB · March 3, 2007 4:42AM

If you want to add gold, silver, ect to your portfolio I would just buy the ETFs. GLD and SLV. You may also want to look at DBC. Do a google search and you can get the prospectus.

They trade like a stock so you dont have to deal with outrageous spreads. You dont need a safe to store them. And you can buy and sell whenever you feel.

bidask · March 3, 2007 5:05AM

<< <i>For several years(maybe longer), some financial advisors have recommended that a truly diversified portfolio include hard assets, such as gold.

Depending on age of retirement, risk tolerance, amount of assets and all the other specifics needed to offer an opinion, what hard assets should be included?

Only generic gold, silver & platinum coins?

In what other forms? ingots, certified/raw, high grade, rare dates?

Are there any forum members who are Certified Financial Planners who give advice in this area when asked? Any actually own hard assets in their personal portfolios?

Or is everyone here just doing it on their own? >>

I have worked in financial services professionally for 25 years and I give advice on asset allocations.

I also have collected coins for 45 years and as I could afford over the years I have increased my allocation to rare coins only because I trust my grading skills. I have a miniscule allocation to bullion.

How can I help you?

roadrunner · March 3, 2007 6:11AM

If you want to add gold, silver, etc to your portfolio I would just buy the ETFs. GLD and SLV

These funds are not without risk considering you do not have physical possession of the metal. For those who don't mind backing up their portfolios with more promises on paper, this is an acceptable and convenient method. A large percentage of the metals advisors do not see safety in ETF's.

I've yet to run into a general financial advisor that knew enough about coins to advise anyone properly. First of all, they need to be to be one of the top graders and value assessors in the market. That eliminates about 99% of the crowd. It's basically a crap shoot.
For this portion I'd recommend dealing with a numismatic professional with a great track record. They not only have to get you in, but they have to get you out in time. There are a few, but not many. Most collectors/investors seem to do it on their own, probably because there are so few advisors available with a track record.

roadrunner

DaveG · March 3, 2007 6:37AM

I think that when the "traditional" financial advisors recommend that an investor allocate a percentage of their portfolio to hard assets they're thinking of gold mutual funds or mining stocks (or now, perhaps the metals ETFs)

On the other hand, if you distrust "paper assets", then you'd want to take physical delivery of the actual metal. You'd probably prefer bullion to rare coins and you'd most likely prefer bags of circulated 90% silver coins. (After all, in the case of "financial collapse", it's a lot easier to buy food with silver dimes than it will be to cut off a piece of a 100 oz. bar.)

On the third hand, if you want to "invest" in coins (for the purposes of this argument, let's say that means you want to acquire expensive "rare" coins), then all the standard advice about collecting high-end coins applies (buy the best at the lowest price you can, most likely through auctions and have the coins examined before purchase by a trusted expert numismatist).

bidask · March 3, 2007 7:19AM

<< <i>If you want to add gold, silver, ect to your portfolio I would just buy the ETFs. GLD and SLV. You may also want to look at DBC. Do a google search and you can get the prospectus.

They trade like a stock so you dont have to deal with outrageous spreads. You dont need a safe to store them. And you can buy and sell whenever you feel. >>

Those are good suggestions.

Nic · March 3, 2007 8:03AM

Dale,
Great replies here from good people. I like possession of the asset however. K

roadrunner · March 3, 2007 8:28AM

Nothing wrong with gold and silver bullion. I also like the play that certified hand picked MS63-64 saints offer. Considering how tough it is to find a real gem MS65 $20 Lib, $10 Lib, or $5 Lib, I think those are good plays as wells, esp the $5 and $20 Lib. And neither has been under promotion yet. Indian gold I'm afraid of due to the constant promotions. Oddly, you can find PQ 64's in the above coins without much problem or much of a premium.

Any honest gem gold coin seems a bargain these days as 60-90% of what is out there is not quite all there. When you run across them priced reasonably, one should buy them. Honestly grade 65 and 66 saints are a good buy imo as well. They are getting harder to find.

I recall working with one CFP with coins during the 1988-89 market.
He was putting some real swill into client's packages. But he would sometimes get an undergraded and I was more than happy to pick those pieces out.

roadrunner

SkyMan · March 3, 2007 8:53AM

<< <i> On the other hand, if you distrust "paper assets", then you'd want to take physical delivery of the actual metal. You'd probably prefer bullion to rare coins and you'd most likely prefer bags of circulated 90% silver coins. (After all, in the case of "financial collapse", it's a lot easier to buy food with silver dimes than it will be to cut off a piece of a 100 oz. bar.) >>

For those that are planning and/or worrying about a financial collapse, one little piece of history. During The Depression (the closest thing to a financial collapse we are ever likely to see) gold held it's value, while silver declined in value. So if you are the worrying kind don't buy silver, buy gold instead. Personally, I'm not one of "the end is nigh" kind of people. I've got maybe 2-3% of my assets tied up in coins/bullion/mining stocks.

Bear · March 3, 2007 9:16AM

Have all you teeth capped in gold. Then you can carry

your wealth with you.

BigRed · March 3, 2007 1:18PM

If anyone wants to deversify then deversify. Buy some of everything,gold bullion,generic gold, rare date gold,ETF's,same with silver and platinum.

Animalkeeper · March 3, 2007 1:27PM

I bought into the advice to have "no more than 5% of my assets in bullion." in the late 1990s and early 2000s. Crapola. Wish I had had more, particularly platinum when it was down in the $300-400 range.

I now think it is prudent to keep several thousand dollars (tens if your're solvent) regardless of percentage in bullion. It's easy to turn into cash and it holds its value.

My grandma told me a story about her childhood (1920s) and how an ounce of gold would buy a good suit. Today, an ounce of gold will still buy you a good suit. There's a lesson there for those that are listening.

MrEureka · March 3, 2007 2:24PM

I have no bullion and probably never will. I think it's sufficient to own other real assets, e.g., real estate, equities, collectibles, automobiles, etc. Bullion is really only a must-have if you want to protect yourself against a true societal meltdown. And if that's the goal, guns and ammo and canned foods and bottled water are all higher priorities than gold and silver bullion. To buy bullion without the rest seems naive, at best.

RedTiger · March 3, 2007 2:39PM

<< <i>I have no bullion and probably never will. I think it's sufficient to own other real assets, e.g., real estate, equities, collectibles, automobiles, etc. Bullion is really only a must-have if you want to protect yourself against a true societal meltdown. And if that's the goal, guns and ammo and canned foods and bottled water are all higher priorities than gold and silver bullion. To buy bullion without the rest seems naive, at best. >>

Like I wrote on another thread, most Americans assume that the rule of law will hold, that their government will stand, and that they will be able to live close to where they are living now. Food, ammo and other collectibles may be of some value if a person can stay where they are. If a person has to leave, bullion is one of the few portable ways to transport wealth. Of course every family needs to have emergency food and water supplies in case of natural disasters. In my mind, a pinch of gold is a similar common sense precaution against unthinkable or unlikely events.

When governments fall, when wars are lost, all paper assets such as stocks, bonds, deeds to real estate may be seized, frozen, or worthless. Americans have enjoyed the high luxury of never having that happen to them (except in very isolated incidents). Most Americans assume it can't happen here, and that is a false assumption. Almost every other country has seen events like this and almost certainly America's turn will come.

It is my opinion that a little gold (3%) will do everyone some good, it is an insurance policy against the unthinkable. If folks want more than 3% best to do some independent research and due diligence before buying. For average folks, like the vast majority on this board, that know nothing about the markets 3% is enough. For the average person, physical gold coins are what I suggest. Collectible coins require grading expertise and knowledge of the hobby that is beyond that of the average person.

Hard assets as a part of an investment portfolio- do you just buy generic gold/silver, or do you div

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