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 supermarket
- shroomery veteran-
 
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 Buying Gold Not a Good idea? 
#11882504 - 01/23/10 12:22 AM (3 years, 3 months ago) |
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I have a friend that says its a horrible idea to buy gold. He is an accounting major, and tends to this he knows everything. Can someone tell me there opinion, and explain why?
I get his stance that you wont make profit on gold like all the tv commercials and investors try to convince the american public....but I want to buy gold just to have another form of liquid asset, besides cash, stocks, and money in the bank. Why is this a bad idea?
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 elementswrath
Finger' trippin good
Registered: 08/04/09
Posts: 5,276
Loc: suiciety 
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Re: Buying Gold Not a Good idea? [Re: supermarket]
#11882615 - 01/23/10 12:36 AM (3 years, 3 months ago) |
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gold if you wait long enough will increase in price every year.
but not in a very significant margin and will take a while.
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Zepplin
journeyman
Registered: 12/31/01
Posts: 723
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I bought silver back awhile @ $7.00 an oz. No guarantee that any precious metal will "increase in price every year", It may even go down.
It wouldn't hurt to diversify your investments a little and put some precious metals away, unless you see the economy getting better anytime soon.
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Heffy
BrauMeister
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Re: Buying Gold Not a Good idea? [Re: supermarket]
#11883346 - 01/23/10 03:14 AM (3 years, 3 months ago) |
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If you got into gold several years ago, you could have quadrupled your money.
I don't suppose he explained WHY he thinks it's a horrible idea.
If he says "it's very complicated" please bitch slap him for me.
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meams
Blessed
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Re: Buying Gold Not a Good idea? [Re: supermarket]
#11884034 - 01/23/10 09:16 AM (3 years, 3 months ago) |
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Quote:
supermarket said:
I want to buy gold just to have another form of liquid asset.... Why is this a bad idea?
YOur friend is probably saying those things becuase the price of gold is already high relative to what it's been historically. However, some on here will argue (and there is certainly validity to their claims) that while the price of gold is currently high relative to what it HAS BEEN, it's low relative to where it WILL BE. So, the potential for profit is still there -- if you follow their views.
However, if you believe what your friend does, then yeah - it'd be dumb as shit to buy gold.
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LunarEclipse
Mr. Dogma Free
Registered: 10/31/04
Posts: 10,700
Loc: The Hand
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Re: Buying Gold Not a Good idea? [Re: supermarket]
#11884158 - 01/23/10 10:27 AM (3 years, 3 months ago) |
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Quote:
supermarket said:
I have a friend that says its a horrible idea to buy gold. He is an accounting major, and tends to this he knows everything. Can someone tell me there opinion, and explain why?
I get his stance that you wont make profit on gold like all the tv commercials and investors try to convince the american public....but I want to buy gold just to have another form of liquid asset, besides cash, stocks, and money in the bank. Why is this a bad idea?
It's not a bad idea to buy gold. Or it could be a horrible idea depending on the person and the state of their finances.
Here's a dumb example that some people would actually consider and a few even do. "Gee Gold is so great even though I pay interest at 29.99% on my already outstanding credit cards, I am going to buy an ounce with my VISA. Look it came down from $1200 to $1000 so if I don't buy some now I never will.
While I do think precious metals are a good idea in an investment portfolio, I would suggest silver Canadian maples with a $5 face canadian and one ounce pure silver. Beautiful coins, a hedge against inflation of the US dollar and denominated in a much stronger currency. Hopefully you can pick them up for $2-3 over spot. Historically silver trades at much lower multiples to the price of gold and 50+ times where is it now is quite high meaning silver is currently cheap compated to gold.
Typically, in an investment portfolio precious metals are recommended to be 5-10% of your money.
If you don't have debt paid off and have at least 3 months of emergency cash though why would you consider gold silver or anything other than to get out of that burden and in the clear to take care of the unexpected.
Also consider the fact that if the shit really hits the fan they can and will come and take your gold you bought just like Roosevelt did in 1933 in a state of "grave National Emergency". Google it.
So, while it might be pretty to have when the chips are down wouldn't a bag or two of potato chips and some soup and even a sandwich be nicer? How about some of that 50 lbs. of lentils you bought cheap in bulk? And those glass 6.5 gallon water bottles you have been storing with good filtered water cause if you don't have a good water filter you shouldn't even be thinking about buying 10 ounces of silver. I mean really you can't eat that gold coin even if you can keep it away from those good men that are there to help you. Hide the lentils though...
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Don't submit to dogma.
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ArmFromTheAbyss
Old Hand
Registered: 10/09/02
Posts: 1,351
Loc: Down here in Babylon
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Re: Buying Gold Not a Good idea? [Re: supermarket]
#11884852 - 01/23/10 03:00 PM (3 years, 3 months ago) |
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Quote:
supermarket said:
but I want to buy gold just to have another form of liquid asset, besides cash, stocks, and money in the bank. Why is this a bad idea?
The question is: is gold really a liquid asset? IMO cash is much more liquid.
If you have plenty of cash and enough on the side to speculate with go ahead. Buying gold now because you think you can sell it for a higher price later is nothing more that speculating, not investing. Look what happened with real estate. Don't listen to people who suggest putting all your savings in gold bars buried in the yard.
Here is the problem with gold, few people can really trade it. Not everybody has the wherewithal to trade gold futures. Otherwise you're probably going to pay a retail premium. The other problem is that people are broke. They'll be forced to liquidate their gold stashes when cash it tight and bill are due.
You won't need a high interest savings account, everything will be cheaper next year. If you had 500 grand you could buy half of Detroit, or a stadium. Buy assets cheap from bankrupt fools.
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"The man who knows something knows that he knows nothing at all" -Badu
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meams
Blessed
Registered: 01/11/05
Posts: 17,493
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Quote:
ArmFromTheAbyss said:
Buy assets cheap from bankrupt fools.
Average price for home for sale in detroit right now is something abysmal like $18,000
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Shins
Fun guy
Registered: 09/15/04
Posts: 11,361
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Re: Buying Gold Not a Good idea? [Re: supermarket]
#11886643 - 01/23/10 08:24 PM (3 years, 3 months ago) |
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Quote:
supermarket said:
I have a friend that says its a horrible idea to buy gold. He is an accounting major, and tends to this he knows everything. Can someone tell me there opinion, and explain why?
I get his stance that you wont make profit on gold like all the tv commercials and investors try to convince the american public....but I want to buy gold just to have another form of liquid asset, besides cash, stocks, and money in the bank. Why is this a bad idea?
first consider that your friend is an accountant not an economist.
metals don't pay out a dividend if that's what you mean by "profit." It will however protect you from inflation or a currency crisis.
A lot of people like to buy gold because they see the government going insane with a credit card and don't believe that bernake and his cartel of financial terrorists can fix everything experimenting with their metaphoric chemistry set.
when they fail, and everything blows up, all the paper will burn in the explosion while gold will be left standing.
Gold is a commodity. lots of other commodities will provide the same inflation protection effect as gold while being more useful. some of the benefits of gold are its portability, monetary history, liquidity, and it's difficult to fake.
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Hotnuts
old hand
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Re: Buying Gold Not a Good idea? [Re: Shins]
#11886732 - 01/23/10 08:40 PM (3 years, 3 months ago) |
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I definitely don't disagree about owning hard assets, but do wait to see what the market has in store in the upcoming weeks. You may be able to snag some gold up at a better price, than today's. Much better, actually.
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moon_glue
Orwell's Post9/11 Era
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Re: Buying Gold Not a Good idea? [Re: Hotnuts]
#11890108 - 01/24/10 11:40 AM (3 years, 3 months ago) |
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gold is a great way to long term store cash that earns interest in an invisible way.
but if you plan to access the money any time soon don't bother. it's easy to buy gold. it's hard as shit to sell it off when you actually need cash.
gold is too inconveinent for me. i made some good money off of it in the past. but i can make money much better ways and saveing alot of cash is not good.
my stance is to buy something that holds it's value, or put savings into something, like a mortgage, an efficient car, tools (to make more money with), learning how to do something, ect. invest that money into yourself instead of gold.
save cash. cash becomes worth alot less over time. buy something that hold's it's value has two outcomes. one, you can sell it at a profit later on, and two, if it was something you needed, you got it cheaper (because prices only rise) then if you had waiting while saving.
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Groovy Grant
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Re: Buying Gold Not a Good idea? [Re: moon_glue]
#11890169 - 01/24/10 11:52 AM (3 years, 3 months ago) |
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Quote:
moon_glue said:
my stance is to buy something that holds it's value, or put savings into something.... an efficient car...
A car is the opposite of something that holds value, it's a liability not an asset.
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LayYouIn
Taurus
Registered: 09/28/06
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Re: Buying Gold Not a Good idea? [Re: supermarket]
#11890223 - 01/24/10 12:04 PM (3 years, 3 months ago) |
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Wouldnt a vehicle be an expenditure?
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ArmFromTheAbyss
Old Hand
Registered: 10/09/02
Posts: 1,351
Loc: Down here in Babylon
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Re: Buying Gold Not a Good idea? [Re: moon_glue]
#11890611 - 01/24/10 01:22 PM (3 years, 3 months ago) |
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Quote:
moon_glue said:
save cash. cash becomes worth alot less over time. buy something that hold's it's value has two outcomes. one, you can sell it at a profit later on, and two, if it was something you needed, you got it cheaper (because prices only rise) then if you had waiting while saving.
Prices only rise? Like real estate, right? I suggest reading about the 1930's or the 1890's. You're forgetting productivity.
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"The man who knows something knows that he knows nothing at all" -Badu
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supermarket
- shroomery veteran-
Registered: 02/20/02
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Yea, a car is a liability, not an asset. It doesnt even MAINTAIN its value.
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Hotnuts
old hand
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Re: Buying Gold Not a Good idea? [Re: moon_glue]
#11892043 - 01/24/10 05:41 PM (3 years, 3 months ago) |
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Quote:
moon_glue said:
but if you plan to access the money any time soon don't bother. it's easy to buy gold. it's hard as shit to sell it off when you actually need cash
That's why I prefer, derivatives.
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geokills
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 Re: Buying Gold Not a Good idea? [Re: supermarket]
#11894823 - 01/24/10 11:45 PM (3 years, 3 months ago) |
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Here's some related comments picked up on another forum I frequent. They are made with respect to the SPDR Gold Trust (ticker symbol: GLD), an exchange traded fund that invests in the hard asset itself. In fact, the SPDR Gold Trust has been the world's largest purchaser of gold for some time now. You may want to buy the physical gold and that's fine... this analysis of GLD is still valid, as its value moves in lockstep with the physical commodity's spot price:
Quote:
GLD
If it reverses on news Bernacke stays/Fed rates unchanged/extended period of time (after the election), Gold strength back above 1100 might be extremely bullish here for equities on an inflation-asset allocation basis.
Perhaps a retest of the high... but do we got enough gas to get us much futher? Elliot Wave work suggests that we gottah go lower before making a gonzo move above 2009's high.
Yah never know...nothin' goes straight up and we're in a weird place between inflation/deflation and fear is stronger than greed when it comes to the shiny metal...its love, LOve, LOVE...Engaged!...HATE..DUMP!
I expect more of these interest rate shocks to wreak havoc with inflationary equities and metals bulls.
Maybe there's someone who can really make the case that the gold market is just resting in an uptrend without being vulnerable. If we drop below 1060 without some serious buyers...I'm worried.
no position in gold.
Long Yen
Quote:
Re: GLD
A fair number of people continue to bail on GLD, as the expected bounce isn't bouncing and profits are eroding/losses are mounting. I'm not long at the moment, and I'm still hoping for a test of 105 before I load up again. With the VIX significantly higher, I would have expected GLD to be doing better already. If the VIX declines Mon-Tue on the back of AAPL earning, soothing words from policymakers, and so on, and GLD stops falling or, even better, starts to move higher, that too would be an indication that the selling is getting close to an end. The vertical bar pattern did look more constructive on Friday.
The other key to success for long GLD positions, of course, would be a renewed decline of the Dollar, At the moment, we have a fairly static situation, with weakness everywhere offsetting weakness everywhere else. You might want to sell Dollars, but it is tough to buy Euros when the woes of the PIGS are on the front page of the FT every morning. Yen can see some seasonal strength, but interest rates at basically zero are unattractive, and the political situation is a mess. Long AUD and CAD have been no-brainer trades for quite a while, but those are crowded now and subject to correction whenever global growth and thus demand for commodities is in question. Neither currency is easy to exit in times of stress.
In short, I'm just waiting to see if 105 is reached, and if so, how GLD reacts. I'm hoping to use that level to define risk, and start wading back in again.
Hope it helps; all the best.
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AlmostAsCoolAs
Registered: 11/15/09
Posts: 5,514
Loc: California
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Re: Buying Gold Not a Good idea? [Re: supermarket]
#11895722 - 01/25/10 01:55 AM (3 years, 3 months ago) |
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It's not a bad idea to buy gold if you're well off, just don't expect to profit from it for a long time.
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Zepplin
journeyman
Registered: 12/31/01
Posts: 723
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Guns are a good investments as far as something that holds it's value +.
Cars???..Not really, even if you keep the minimal insurance on it and it holds it's value, you loose.
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Shins
Fun guy
Registered: 09/15/04
Posts: 11,361
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Re: Buying Gold Not a Good idea? [Re: Zepplin]
#11909456 - 01/27/10 02:28 AM (3 years, 3 months ago) |
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Its funny how cars and property both have similar areas of maintenance costs (repairs, insurance, taxes, general upkeep) yet houses are always expected to rise.
guess the land makes the difference...
If cars were sold with permanent owned exclusive parking spaces would that make cars a good investment?
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