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I dunno... I just find the whole metals investing idea a bit funny. The reason is that its almost entirely built on a "What if?" mindset-meaning its not as directly connected to expected future performance versus a belief system- again in a "What If?" mentality.
Most people for some reason refuse to believe that if they simply invest in a 401k and a couple of Mutual funds- in other words plain, boring, everyday stocks that they'll be just fine in a good 30-40 years. Its been tat way for the past 100+ years.
I dunno... I just find the whole metals investing idea a bit funny. The reason is that its almost entirely built on a "What if?" mindset-meaning its not as directly connected to expected future performance versus a belief system- again in a "What If?" mentality.
I dunno. I see it the other way. Investing in stocks and mutual funds is much more "what if". Especially if the company can dilute the value of your position by issuing more shares at any time.
There is a finite amount of silver (or gold or whatever) in the world and the amount only goes down as more is used in industry. Silver has uses beyond the Glen Beck fueled apocalypse scenario that can make it an appealing investment.
Is it a fool proof plan? No, but so few investments are.
Sure- there's chance in any type of investment. I see no problem buying gold and metals. I have a coin collection my Uncle passed onto me. To me it seems a lot of people are investing in gold for all the wrong reasons. Stocks should probably be the most significant portion of anyone's portfolio. Its all about diversification. Large cap, small cap, mid cap, energy, bonds, foreign, commodities, etc etc. If one sector is doing badly the others will probably be doing well. All I know is that I've got a few family members who just invested in plain, boring 401ks and they are retired and living fairly comfortably at the age of 60 or so. None of them invested in metals.
I dunno. I see it the other way. Investing in stocks and mutual funds is much more "what if". Especially if the company can dilute the value of your position by issuing more shares at any time.
There is a finite amount of silver (or gold or whatever) in the world and the amount only goes down as more is used in industry. Silver has uses beyond the Glen Beck fueled apocalypse scenario that can make it an appealing investment.
Is it a fool proof plan? No, but so few investments are.
With stocks, as long as you do your research and aren't just picking random things out of a hat the "what if" scenario can be minimized. It takes a little research and conviction, but history has shown that stocks benefit much more over the long haul than commodities. The problem is that people don't do their homework when they buy or they get emotional and sell when they should be buying more. Dilution shouldn't be a concern if you are buying stock in a company that is well managed and has a track record of success. And even if the winds do change, there are tools to minimze downside risk such as stop losses. Try putting a stop loss on a physical asset like silver.
Yes, I agree. Real estate is a case in point. No one wants anything to do with it right now. Plenty of convincing arguments can be made that it will remain lousy for years. These can often be the signs of an opportunity. Personally, I would avoid the "worst" markets and look at great markets that have been pulled down by the tide.
At this point in my life I am content to participate in solid investments with decent returns, not so much chasing the next big one. Plus, I like highly liquid investments, so I would lean toward something like reits or mutual funds that would benefit from a stabilization in the housing/real estate market. Investing in rentals (via reits) is looking pretty good right now.
I thing PMs/commodities have a place in an investment portfolio, I just think any big run up will likely result in a big correction. As we all know timing is everything!
actually unless your a speculator, timing the markets arent everything, time in the markets is!
with a long term plan even the big corrections are an advantage.
imagine a simple plan of just buying and holding some gold, a total market fund, long term treasuries and cash and only rebalanced back to equal amounts once a year .
if you bought the gold at the worst possible moment when it peaked at near 1,000 back in the 1980's , just by rebalancing and sticking to that plan of rebalaning things each year your gold would have averaged a cagr of over 10% today vs doing the same thing with the s&p 500 and averaging only 9.8% a year.
think about that. you had the worst possible timing in the world and you still came out a winner. thats a powerful concept about long term investing. a strategy and time are your friend.
its not the market drops that are bad, its most dont stick to their own strategy when things go down and never benefit.
most of us who had a plan of rebalancing back in 2008 and 2009 and continued to add to our investments as they dropped broke new highs over and over this year.
others who did nothing or stopped contributing in fear and didnt have a plan for rebalancing are still waiting to make new highs .
those that thought they would bail and run and maybe get back in when the smoke cleared lost a bundle. same with those who tried to time things and didnt believe the early part of the run up was for real.
some are still sitting on the sidelines predicting the big crash so everyone who got ahead falls back to their unsuccessful level and they dont feel foolish.
i miss called the oil bubble back in the early 90's when oil was 10 bucks a barrel . it went to 30 dollars and i said what a bubble. boy was i wrong. i wont even attempt to call silver or gold as a bubble. i just buy it and own it as part of a strategy.
Last edited by mathjak107; 05-04-2011 at 02:45 AM..
There is a finite amount of silver (or gold or whatever) in the world and the amount only goes down as more is used in industry. Silver has uses beyond the Glen Beck fueled apocalypse scenario that can make it an appealing investment.
So mining more silver and gold out of the ground doesn't increase the amount?
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