Downsides to precious metals?

[Alexx1401]

A few years ago I picked up 500 Buffalo rounds for a friend's wife at $16/oz. She called this morning and asked how much she paid and I remembered. "Is that all they've gone up??!" No good dead goes unpunished or neglected. Told her I'd buy all them back at $18 no problem if she regrets it and she just may sell them back to me.

Hell I hope she sells them all back to you at that price

 

[Certaindeaf]

One person's downside is another's haha you freaking moron!

 

[WEE]

Opportunity lost.
Back in the early 1970's, I had this plan to buy a 1 oz. gold Krugerrand every paycheck and do so until I retired. Getting 26 paychecks a year, and eventually working 45 years, I would have had 1,170 coins. Unfortunately, other necessities took priority and I never started the plan. Getting married, buying a house and second car, then 2 children, then a bigger house all got first dibs, as well as contributing to a company-sponsored 401K. I have never tried to figure out how much after tax (cash) I would had invested in the coins, but I imagine close to or over $1M. Selling them at $2K per ounce today, that's a decent chuck of cash, but it would have taken 40 years to double the investment.
No regrets, I have loved my wife for 46 years and have 2 wonderful children, now successful adults. I cannot put a price on my family.

 

[Certaindeaf]

Back around 300 years ago if you had bought Manhattan for 3 beads and a tomahawk it would now be worth exactly one sh1thole.

 

[Bacchus]

I think gold can be bought as part of an IRA, but I'm not sure you're allowed to hold it yourself. Also, I'm not sure you could always contribute to an IRA if you had a company pension, but that might be wrong.

According to Kitco, gold was $394.50 on Apr 2, 1984. Today, 40 years later, it's $2164.00. That's five and a half times greater. If you were dollar cost averaging, buying the same dollar amount each year, you would have bought much more gold (in ounces) in the first 20 years when gold was much cheaper, and when the price zoomed up later I think you would have made a pretty ... golden ... penny!

But ... so would I ... and everybody else. But like you, I have no regrets. And, gold dropped to $265 in 2001. If you had to sell at that point, you would have lost almost half of your investment. So who knows?

Kitco gold price from 1940. Click on 'All' below the years on the bottom axis.

 

[WEE]

I think gold can be bought as part of an IRA, but I'm not sure you're allowed to hold it yourself. Also, I'm not sure you could always contribute to an IRA if you had a company pension, but that might be wrong.

According to Kitco, gold was $394.50 on Apr 2, 1984. Today, 40 years later, it's $2164.00. That's five and a half times greater. If you were dollar cost averaging, buying the same dollar amount each year, you would have bought much more gold (in ounces) in the first 20 years when gold was much cheaper, and when the price zoomed up later I think you would have made a pretty ... golden ... penny!

But ... so would I ... and everybody else. But like you, I have no regrets. And, gold dropped to $265 in 2001. If you had to sell at that point, you would have lost almost half of your investment. So who knows?

Kitco gold price from 1940. Click on 'All' below the years on the bottom axis.

When I started at Boeing, employees could qualify for a pension and invest up to 8% of your salary in a company 401K. Boeing also provided a 401K match up to 1/2 of what the employee contributed. I am blessed to have retired with a great pension which Boeing continues to fund every year. Somewhere around the early 2000's, Boeing stopped providing pensions to new employees. Some of the best advice I received was from a man in my work group; he said put as much as is allowed into the 401K, if you can. But always put at least as much as would get the Boeing match. And don't panic when the market tanks, stay in because you're in it for the long run. He said you'll thank me in 40 or 45 years when you retire.

 

[ma96782]

WOW.....

BUT, But, but.....who would REALLY trust Chinese gold and jewelry?

View: https://youtu.be/orOuMH-OWS8?si=Bwdc6oos-LojDboL


Aloha, Mark

 

[Bacchus]

I talked to Costco about their silver coin offer, and they told me it is on hold until they can resolve an issue with too many scratched coins, many customers were complaining. Good luck with that, I think the coins are most likely scratched as part of the minting process, not from shipping. Costco sells it, or was selling it and hopefully will again, in their jewelry department.

I couldn't find any reference to it on the Costco web site, but I was on another forum and a member posted the link:

Costco Maple Leafs

A couple folks on the other forums made a point about a use for precious metals that I didn't see mentioned here. They pointed out that if the current medium (dollars) is replaced by something else without adequate compensation, you can use a PM to purchase the new currency from someone flush in the new currency. That assumes that someone with the new currency wants to buy PM, but PMs have been in demand for A. Very. Long. Time.

 

[arakboss]

I think gold can be bought as part of an IRA, but I'm not sure you're allowed to hold it yourself. Also, I'm not sure you could always contribute to an IRA if you had a company pension, but that might be wrong.

According to Kitco, gold was $394.50 on Apr 2, 1984. Today, 40 years later, it's $2164.00. That's five and a half times greater. If you were dollar cost averaging, buying the same dollar amount each year, you would have bought much more gold (in ounces) in the first 20 years when gold was much cheaper, and when the price zoomed up later I think you would have made a pretty ... golden ... penny!

But ... so would I ... and everybody else. But like you, I have no regrets. And, gold dropped to $265 in 2001. If you had to sell at that point, you would have lost almost half of your investment. So who knows?

Kitco gold price from 1940. Click on 'All' below the years on the bottom axis.

seems like a decent gain but you would have been much better off putting that 1984 money in the market.

S&P 500 Returns since 1984

www.officialdata.org

 

[ma96782]

RE : Costco

View: https://youtu.be/NYJIA8cWWk0?si=Y9RhwKmK17nT7HwR

"Trust Me" It's in a sealed plastic/certified case.

View: https://youtu.be/wXOHBK3XBYM?si=VD9OERmGZ_eel7Wv


Aloha, Mark

PS......Then. It might be REAL. But is it, "Conflict Gold"?

EXCLUSIVE: Fake-branded gold bars slip into world markets in emerging laundering tactic - Thomson Reuters Institute

Gold bars fraudulently stamped with logos of major refineries are being moved into the global market in a new tactic to launder illegal or smuggled gold.

www.thomsonreuters.com

 

[Bacchus]

That guy in the first video said a lot of things I disagree with. Some of it makes no sense at all, such as when he says the reason Costco is selling gold is because they need dollars more than gold. By that "logic" they're selling briskets because they need the cash more than meat. They're in the business of selling things at a profit! They didn't have that gold bequeathed to them and now they want to get rid of it, did they? They bought it (gave dollars for gold!) and are now selling it at a profit.

People are buying it for wealth preservation, not as an investment, and he doesn't have an argument against it, so his strategy is 1) he insists that it is for investment and then 2) proceeds to show why it isn't as good as stock as an investment. That's correct, it's not as good an investment as stocks, and that's why it usually isn't bought as such. It's bought for wealth preservation or as an inflation hedge. I wonder what his real agenda is?

And everything he said about gold would not be specific to Costco, even though he seems to have a subagenda to disparage Costco.

The second video features Harry's Coin Shop, in Beaverton. From what I can tell from their videos, they seem to be straight shooters and know what they're talking about. The point of the second video is that coins in plastic cases can be faked. Their example is actually for collector coins, not bullion, where much of the value is collector value, largely based on condition and rarity. The condition is in the eye of the beholder but also from recognized and respected coin grading companies, such as NGC and PCGS. These coins were graded and certified and encased by the grading company, and in these instances someone swapped out the coins in the cases. So evaluating collector coins is a much trickier business than verifying bullion.

So sure, when you buy coins or bullion or rare art you have to be concerned with authenticity. Harry isn't saying don't buy gold, he's saying that when you do buy gold beware encapsulated counterfeits.

But all of this is just my opinion.

 

[Burt Gummer]

I've always leaned toward just 'rounds.' Buffalos, etc. Cheapest and 95% of people don't care about scratches and tarnish. They know Tarnex(?) sucks because it removes a minute amount of silver.

Nothing wrong with Philharmonics, Eagles, Maples but if the price EVER goes to the moon (will be waiting from the grave lol) uneducated buyers will just want SILVER COINS .999 and that is all.

 

[Alexx1401]

I've always leaned toward just 'rounds.' Buffalos, etc. Cheapest and 95% of people don't care about scratches and tarnish. They know Tarnex(?) sucks because it removes a minute amount of silver.

Nothing wrong with Philharmonics, Eagles, Maples but if the price EVER goes to the moon (will be waiting from the grave lol) uneducated buyers will just want SILVER COINS .999 and that is all.

I too have never been interested in "collectable". Every time I buy more metal I am just looking for the best price. Place I have always used has different stuff on sale all the time. Until recently I had no idea some would pay more for them kept looking "nice". So figure what the hell, will keep them in the sleeves they come in. Not like they are going to get played with anyway. While back when I wanted more they had some 1oz rounds with the UK King on them. Had no idea until after I bought them that they are actually legal tender there. Worth 2 Pounds each. Which silver would have to REALLY slide for them to be worth spending as money

 

[WEE]

Worth 2 Pounds each. Which silver would have to REALLY slide for them to be worth spending as money

Just like the 1 oz. American Silver Eagle, worth $1 legal tender. Or the 1 oz. American Gold Eagle, worth $50 legal tender.

 

[Jay Walk]

Gold value is measured in dollars, those dollars are US currency which keeps falling. 30% since 2019.
Gold would need to go up much faster than it has to be a thing.

 

[WEE]

Gold value is measured in dollars, those dollars are US currency which keeps falling. 30% since 2019.
Gold would need to go up much faster than it has to be a thing.

The average price of gold in March 2019 was $1,290. Last Friday's price was $2,162. That's a 55% increase. Similarly, silver has increased 47% over that same time period. According to the BLS, the value of the dollar declined 21% over that period. Gold and silver look pretty good to me.

 

[Burt Gummer]

Yeah, pretty much the dollar is doomed (by aggressive plotting) and just about any alternative is better at this point.

 

[gmerkt]

Unfortunately, other necessities took priority and I never started the plan.

This is the fate of many savings plans as originally envisioned. But we can count our blessings. 150 years ago, the vast majority of Americans never had any extra money.

And, gold dropped to $265 in 2001.

This was about where I started buying, the second time around. I think it was under $300. My dad died in 1984, but they lived 1,200 miles away so I didn't get around to cleaning out my mom's garage until late 1990's. He'd squirreled away a lot of collectible car parts, so I made a deal with my mom. I'd clean up and sell the stuff and we'd split the money. Which we did. I decided to put this newly-found cash into gold, as I knew it had been seriously more valuable about 20 years previously and stood a good chance of going up again. Which it has, but I've paid more than $300 an ounce since then on additional purchases.

I'll never forget the comments one of my co-workers made when this came up in conversation. He said, "I'm surprised you're stupid enough to buy gold. It doesn't pay any interest." Verbatim.

It's completely true the gold doesn't pay out interest. And there may be times when it doesn't even hold its own against other asset appreciations. Yet over millennia, it has never given up its role as an emergency store of value.

My first gold buying thing was in the 1970's, when we were first allowed to buy gold bullion again. When gold hit the ceiling in 1980, I cashed it out.

BUT, But, but.....who would REALLY trust Chinese gold and jewelry?

Chinese Panda gold coins, I've been told, are the most commonly faked gold pieces out there. If you're contemplating buying one, make sure it goes under a dealer's xrf scanner first. I've asked a dealer to scan stuff for me that I've considered in private trades. I always offer to pay them, but they just do it for free. But I've bought stuff at this place and that helps.

I sometimes cruise ebay, looking at precious metals offerings. Some are so horrible they just scream out bogus. Yet ebay won't do anything about them. Because to do so would cut into their fee revenue. Fees that are generated by transactions where the buyers get rooked. I have made a few minor purchases of silver on ebay over the years, but only from major, established dealers. I wouldn't think of buying PM from a minor seller on ebay, who if they weren't a crook, might have a fake that they weren't even aware of.

Gold would need to go up much faster than it has to be a thing.

Lately, momentum buying of digital currency has syphoned money away from gold purchases, I believe. BUT: Central banks around the world are still concentrating on gold purchases.

 

[Bacchus]

Another thought on gold as an investment. It doesn't have to make as good a return as stocks, neither do bonds. The point is diversification.

 

[Camelfilter]

Another thought on gold as an investment. It doesn't have to make as good a return as stocks, neither do bonds. The point is diversification.

Yup.

Just another basket.

The value may go up. The value may go down.

However, it still has value. Value which is more difficult for "them" to track.