What do I need to know about buying gold? (sell, interest, tax)

[mathjak107]

I don’t buy physical gold ….I did decades ago and won’t do it again .much to difficult and costly to deal with .

In fact I got hammered for sales tax back then as ny at the time had sales tax on gold .

I had some stored and insured at the bank of Delaware back in the 1980s which was not cheap as well

I use GLD OR IAU only.. it is strictly a trading vehicle like my equities and bonds …I am not looking at it in preparation for a zombie attack

[mathjak107]

Look at what history for gold ?.

Since it has been a main stream investment the last 20 years and easily bought like a stock it has done fine compared to cash and bonds

[mathjak107]

if you want to see history , here you go

we have a total market fund , gold etf , long tresury bond etf and short term treasury fund returns

remember gold is the competitor to bonds and cash , not stocks .

even though gold has outperformed a total stock market fund the last 20 years it shouldnt have but did . that is not a common thing .

however a 60/40 of equities and gold has consistently beat equities and bonds over most time frames since we have had gold etfs accessible

[mathjak107]

for 2020 we had

total market 20.75%

gold 23.86%

long term treasuries 17.92

short term treas. 3.00
---------------------------------------------------------------------------
2021

total market 25.64

gold minus 4%

long term treas. minus 4.76%

short term treas . minus .73

[mojo101]

thats why I said gold is not a currency,in order to use gold to buy goods,you need to convert gold into currency first,unless the retailer has way to test your gold and accept your gold ,give you the item and change in currency,in these cases,you usually get less for your gold.
These days elderly who have gold are selling them to buy food and medicine,their gold is probably bought long ago at much lower price.

[mathjak107]

Most small investors are not part of the prepper group .

They buy gold through etfs .

Gold has been part of lazy portfolios for quite a while now via etfs.

It is getting harder to harder to even get a safe deposit box here ..there are waits of years …banks don’t want them .

Banks like chase forbid the storage of gold unless a collectible or jewelry ….

Plus safe deposit boxes are not insured …so no way do I want possession …..

When our sister building next door had a fire many apartment safes were broken in to ….

[artillery77]

Originally Posted by mathjak107

In the mean time a 60/40 portfolio of equites and gold has beaten 60/40 equities and bonds over almost all time frames the last two decades , despite it being a bull market for bonds .

So I will never rule out gold at any time.

Gold is not to be compared with equities but it’s competitor is bonds and cash in a diversified portfolio

Agreed, just an add for the OP. So many people think about selling everything and buying x.



Gold is and will be a component in any truly diversified portfolio, as your subsequent postings illustrate quite well. Certainly the performance since her release from the gold standard at ~$40/ounce to today's pricing even makes the genius of Wall Street indexes wondering how they were bested by a rock.



Also approving the bond replacement approach. If 60/40 was the starting point, 60/20/20 or 50/25/25 is likely a better place to have been.



Tough to know though. If inflation stays in 7% land, interest rates will likely follow it there. That makes fixed income look decent.

[mojo101]

The Vietnamese boat people managed to leave Vietnam and arrived here with their gold.

[mathjak107]

We don’t know how many had it stolen from them by their own

[mojo101]

I remember leading all the way to 1987 crash,no one cares about gold,as 30 years T Bond was yielding plenty.
After the 1987 crash,gold did nothing .
now as the Fed talks about raising rate,gold keeps rising,there is another factor involved,more than inflation as back then in the 1980s,there is inflation.
so what is the other factor??