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What I like about bonds is well, if your buying 3 months one or short term ones, you are still earning money. People want to say well inflation is 1%, if I get 7% off bonds in a year like this, is that bad? OOoooh I only made 6% real income poor me. Vs the gold guys who been loosing it. Yeah right
Thats the paper price of gold being sold, good luck trying to buy physical gold at these low prices!
What about when it comes time to sell it? Dealers are not going to take market value, especially if the spot price is declining; after all, they are a business. If you are lucky enough to eke out a gain after commission and storage fees, you're still going to end up paying a 28% capital gains tax. That seems like a lot of racket for an asset who price is based on market volatility and not creation of value.
Since '08 you always read about people buying and hording physical gold at every drop, but you never hear about them trying to sell it. I know people who bought physical silver at the top when it was $49 and they have kept buying it as the price has slid, but none have attempted to sell. The hyperinflation fears have not panned out. The economy is slowly on the mend and precious metals could be in for a very long period of decline and stagnant growth. The time to buy precious metals was in the late 1990s, not today.
My god we have some really uninformed rookie investors.
gold will be the best investment over the next 5-10 yrs as will commodities. stop looking at the short term and get with the long term trend.
stocks are in a bear market. 10 yrs ago stocks were about the same price they are today. Sure there are some select companies that are great investments, and of course I own some stocks, but the big trend is for gold to continue to go up, stocks to continue to go down and sideways, and bonds will soon get hit.
I am not a timing expert, but the decline in gold will be short lived. the fundamentals didn't change. relax, cost average in when you think a bottom is hit, and march forward.
I am a buyer soon of silver and will cost average in. physical bullion. You don't get wealthy by chasing things. As you can see, I am probably in the minority here buying physical metals.
This is still a bear market for stocks long term. I wouldn't get your hopes up.
in terms of gold. gold has never been this cheap ever in relation to the money supply. It also is cheap against homes still, and cheap against the dow. Bonds are in a complete and utter bubble. When the bubbles in stocks/homes/bonds materialize, where will that money go?
What moves these ratio's is money changing from one asset class to another. gold and gold investments...hardly anyone owns them. at every top 20-30% of the invesment money was in them.
our debt is done for our US dollar. you could eliminate the entire government and military..everything and the tax revenue cannot cover our medicaire/medicaid/interest on debt/etc.
that was from the government publshed in 2012 tax year.
I am going to stick with the most private, untaxable invesment I can, physicall bullion. which is underpriced, and a great value which these investment opportunities only come once in a lifetime. Where do you think people will hide when they wake up to the massive debt problem around the world?
I was watching the gold market last night, 1 am pacific, lol. Couldn't believe it was down $90.
-I'm still a bull on gold and commodities long term, another 5-10 years. I've been thinking about some gold mining stocks. They've been absolutely battered. Some down 7-8% today.
Are they all going to go bankrupt? Probably not. I think some of the calls might be interesting if you're a short term trader. The risk/reward is interesting. Say Oct 13, or Jan 14 or 15.
-Logically speaking, with gold. There's production cost. I can't see bullion collapsing to $600 or $700 and staying there long term. Wouldn't low prices for a long time reduce supply?
I've read that India has increased its gold import tax to reduce its current account deficit. I don't think that's going to go on forever. There is still enormous demand in China and Asia for gold. If China is growing at 5-7% a year, and housewives keep buying.....doesn't that put some kind of floor under the metal?
I think it got into a bubble from $1,300 to $1,900, but it doesn't mean the fundamentals underneath are worthless.
What I like about bonds is well, if your buying 3 months one or short term ones, you are still earning money. People want to say well inflation is 1%, if I get 7% off bonds in a year like this, is that bad? OOoooh I only made 6% real income poor me. Vs the gold guys who been loosing it. Yeah right
not sure where you are getting 7% but almost every type bond is at a loss ytd.
long term treasuries are down almost 7%, high grade corporates down over 3% and international down around 6%.
that is after figuring in the interest,.
it has been horrible this year in the bond markets.
not as bad as gold. i just looked at fidelity select gold and it is down 49% ytd. that is like the 2008-2009 crash in equities.
what is scarey is bond investors today have never been in a bond bear market before. bonds have been in a bull market for more than 30 years.
conservative investors thought they were being safe and low risk in bond funds. just because they had never seen a bear market in them.
just wait until they see their next statements and lets hope we don't start to see panic selling there too.
Last edited by mathjak107; 06-21-2013 at 04:34 AM..
not sure where you are getting 7% but almost every type bond is at a loss ytd.
long term treasuries are down almost 7%, high grade corporates down over 3% and international down around 6%.
that is after figuring in the interest,.
it has been horrible this year in the bond markets.
not as bad as gold. i just looked at fidelity select gold and it is down 49% ytd. that is like the 2008-2009 crash in equities.
what is scarey is bond investors today have never been in a bond bear market before. bonds have been in a bull market for more than 30 years.
conservative investors thought they were being safe and low risk in bond funds. just because they had never seen a bear market in them.
just wait until they see their next statements and lets hope we don't start to see panic selling there too.
7% refers to yield on some speculative grade bonds and bond funds, business loans and bank loan funds, not total return. If one holds to maturity, or even long-term in a fund, then yield is the main measure, nay the only measure, provided there is no default.
Problem can arise, of course, if one needs to raise cash from the principal "prematurely", but that would mean asset/liability mismanagement on the part of the investor or simply bad luck due to unforeseen events.
For many, the purpose of bonds is to use the periodic cash flow from the interest payments for periodic consumption needs and, if there are any surplus proceeds from the periodic payments, reinvest them, even at higher interest rates during a rising interest rate environment. Or perhaps to make a defined lump-sum principal payment due at a future date, generating some interest in the meantime (or using a zero-coupon bond).
Pursuit of "total return" is not appropriate for all parts of a portfolio during every phase of one's life, at every aspect of asset/liability management, and you know that better than I.
We have a complex and flexible financial system because we have a complex and flexible economy, and millions and millions of needs and desires among economic participants and the entire population that meet at multiple cross-roads seeking satisfaction through the market mechanism (among others).
Anyway, I agree that metals and other commodities will one day again enjoy a few days in the sun in the coming years, and very obviously people still desire gold as part of that and the money supply mix.
Good Luck!
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