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I cashed out my 401k and bought lots of double eagle gold coins back in '05.
Later on I saw many I know watch their 401's turn to dust in the crash of '08.
Most of them haven't recouped their losses.
The entire economic collapse was obviously well orchestrated.
Just like the Great Depression of the 30's.
The only hedge then, and now, is GOLD!
Specifically, gold coins - not bullion - as it is more easily sold
to banks, coin dealers, exchanges, and even jewlers.
IMO the stock market is easily manipulated - especially now.
Not just the penny stocks but everything except the NYSE
(whose stock prices are usually high and profits insignificant).
I wouldn't touch it with a fifty foot pole.
On the hand, gold will always hold it's value in an unsteady market.
When everyone is talking about buying gold and silver, it may be time to go the other direction.
There is a great deal of truth in that idea. For example, when you see a lot of ads on TV selling gold, phone them and ask them, If gold has such a wonderful future, why are they selling theirs? In other words, do what the smart money is doing, not what the smart money is telling you to do.
However, gold, silver and PGMs have been slogging along for the past few years without much significant movement in either direction. For now, you'd have to be in it for the long run.
Myself, I've been buying into and out of Platinum, for short turnarounds. From a broker like kitco.com, you can buy platinum pool for about a 1.0% spread, and on a lot of days, it fluctuates more than that in a 24 hour period. Sometimes I can make 1% in a day, but sometimes I have to hold for a month or two to make that 1%, but then I can wait a few more days for 2 or 3%. I'm now ahead about 15% on the year. You can play the same game with gold, which has only a 0.4% spread on pool shares, but gold is less volatile, and harder to predict times of the day when it rises and falls.
Platinum generally falls about $10 in the morning when there is a lot of trading in NY. Often there are false highs in the early evening US time, when there is thin trading and lots of volatility. But by NY opening, it has usually settled back pretty close to the previous day's close.
For example, if Pt closes at 1550, it may drift up to 1555 on thin trading at about 8 pm. Then it will be back to the realistic 1550 at the NY open in the morning, and more often than not, it falls to maybe 1540 in the morning trading. Both of those events can happen, even if it is going to close again at 1550. So you can buy in the morning at 1540, and sell in the evening at 1555, and you'll beat the spread. Any variation over that makes you money, and you can nickel and dime them to death. If it doesn't happen, you just have to hold and wait a few days until is strengthens.
Ideally, buy when the USD is very strong. The dollar often also fluctuates by 1% in a day or two. So if you don't cover the spread on the platinum alone, it will be only a couple of days before the dollar re-settles and you'll make your spread on that alone.
I never like to see the words investing used when the bet is only on one asset class and one economic outcome..
Thats speculating not investing in my book.
anytime you think you are smarter then the markets and know whats coming next ,or which companies and sectors are going to be hotter then all the others thats a speculation...
you either win big or loose big eventually .
Last edited by mathjak107; 08-20-2010 at 09:22 AM..
For example, today the USD is up about 2% in 48 hours against global currencies, so you can buy a lot of metal for your US dollar. The USD will resettle in a week or so, you can use your gold to buy the dollars back at 2-cents cheaper, and you will have made more than you can get in a year on a CD. Gold is just about the only easy and convenient way to use fluctuations in the USD to your advantage, because everything else you can buy is defined in dollar terms.
Gold is a hedge in many ways. "Experts" say not to put more than 5% of a portfolio into it. Gold is at an all time high Gold Chart History | Silver Chart History When I invested in gold I waited for a large dip, bought in and then sold it when it reached $1,000 oz. This needs to be part of a well thought out investment strategy based on your needs and investment skills, not part of what folks think.
If you like gold and like to wear it, that is a different story since you can enjoy it no matter what the price. Or watch it for a few years and wait for another large dip.
Smart Choice and Good Stock OilDog.
Now just remember to hold on till we get $50 plus silver.
I see Silver in the longer run @ $60 to $80.
SF
Why?
1. Silver and Gold are plentiful minerals. There is a lot of it sitting out there in closets, safe deposit boxes etc etc. and mines sitting inoperative but will go back into production as prices increase.
2. When I see investment places pushing gold and silver....that's often a warning sign that sophisticated investors are trying to pump and dump by dangling "huge recent returns" in front of the masses.
3. Over and over and over throughout history people have gotten burned jumping on the most current hype-wagon. Dot coms? Real Estate? Gold and Silver are next, not sure how high it will get prior to collapse likely depends upon how devalued the US dollar becomes.
Gold is a hedge in many ways. "Experts" say not to put more than 5% of a portfolio into it. Gold is at an all time high Gold Chart History | Silver Chart History When I invested in gold I waited for a large dip, bought in and then sold it when it reached $1,000 oz. This needs to be part of a well thought out investment strategy based on your needs and investment skills, not part of what folks think.
If you like gold and like to wear it, that is a different story since you can enjoy it no matter what the price. Or watch it for a few years and wait for another large dip.
Good post. Also, people tend to *forget* about the transaction costs when buying gold and stating their "profit".
Reminds me of the knitting circle investment club or whatever from the 80's that claimed huge returns and when reviewed turns out they were underperforming the market and had just been too stupid to accurately calculate profits....but I think they already had sold a book to people touting their method.
If you take possesion of your gold depending if the seller has offices in your state THERE may be sales tax.
I bought years ago thru fidelity investments and took possesion of some of the gold eagles and got hit with sales tax on thousands of dollars
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