Help with investing in gold bullion
- jjkthunder
- Posts: 151
- Joined: Thu Apr 05, 2007 12:30 am
- Location: Green Bay, Wisconsin
Help with investing in gold bullion
I'm think of investing between 5 or 10% of my IRA portfolio in gold bullion or American Eagle coins. Has anyone ever dealt with "USAGOLD-Centennial Precious Metals, Inc."??
Apparently George Cooper is the person to talk too if interested in investing over $25K in Gold IRA.
Any advice from people that are in the .999 fine gold investing would be appreciated. Maybe a different gold brokerage provider is better????????
If out of my ROTH IRA (age 64 and over 5 years implemented)which I would take a distribution, I presume I could keep this in my own safety deposit box.
Is keeping it within the ROTH and at the brokerage a better option???
If out of my Rollover IRA with a rollover to "USAGOLD-Centennial Precious Metals, Inc", I presume they would be the holders of the gold bars.
Any responses appreciated even if you think I'm using poor judgement in doing this.
My AA as of now is 35/65. The 5 or 10% would be taken out of the 65% fixed income assets.
Apparently George Cooper is the person to talk too if interested in investing over $25K in Gold IRA.
Any advice from people that are in the .999 fine gold investing would be appreciated. Maybe a different gold brokerage provider is better????????
If out of my ROTH IRA (age 64 and over 5 years implemented)which I would take a distribution, I presume I could keep this in my own safety deposit box.
Is keeping it within the ROTH and at the brokerage a better option???
If out of my Rollover IRA with a rollover to "USAGOLD-Centennial Precious Metals, Inc", I presume they would be the holders of the gold bars.
Any responses appreciated even if you think I'm using poor judgement in doing this.
My AA as of now is 35/65. The 5 or 10% would be taken out of the 65% fixed income assets.
GLI...................Jack |
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You can call me anything you want but please don't call me NORMAL
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- jjkthunder
- Posts: 151
- Joined: Thu Apr 05, 2007 12:30 am
- Location: Green Bay, Wisconsin
Chicagobear wrote:
Are you saying if I bought gold at $1000 per troy ounce with monies NOT in an IRA that in five years if I sold that gold at $2000 per troy ounce that the thousand profit on each ounce isn't taxable????I don't see any reason to put bullion in an IRA given that it doesn't generate taxable income.
GLI...................Jack |
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You can call me anything you want but please don't call me NORMAL
Not as income.jjkthunder wrote:Chicagobear wrote:Are you saying if I bought gold at $1000 per troy ounce with monies NOT in an IRA that in five years if I sold that gold at $2000 per troy ounce that the thousand profit on each ounce isn't taxable????I don't see any reason to put bullion in an IRA given that it doesn't generate taxable income.
What!?!mptfan wrote:Not as income.jjkthunder wrote:Chicagobear wrote:Are you saying if I bought gold at $1000 per troy ounce with monies NOT in an IRA that in five years if I sold that gold at $2000 per troy ounce that the thousand profit on each ounce isn't taxable????I don't see any reason to put bullion in an IRA given that it doesn't generate taxable income.
It certainly is taxable income: http://www.irs.gov/publications/p17/ch1 ... k100033321
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A good place to find information on gold dealers and PM investing is goldismoney.info/forums/index.php. The Gold Is Money community is a bit more gloomy than the average investor site with regards to the future of the financial system, but many posters routinely buy gold and in large quantities, they know all the large and medium gold sellers.
I would avoid Perth Mint, during the last metals "crunch", they were unable to meet withdrawal demand even though they are supposedly just storing your gold for you. In reality, either they buy gold derivatives like options and futures, and/or they loan out physical gold. Usually they can acquire enough physical gold to meet withdraw requests, but they really hurt their reputation last time.
I don't know anything about holding gold and silver in an IRA account, but I would advise you to have physical possession of your gold holdings, or at least physical access like with a bank vault. Otherwise there is counterparty risk, the companies that promise to hold your gold for you may do something foolish, like loan out the gold to get interest to an entity that goes bankrupt, or have their gold stolen thanks to lax security. During the last crisis, it was tough to get physical gold, and the vast majority of places who promised delivery of gold on a certain date had to reneg and extend their timeframe.
If you are buying gold as insurance, then no reason to expose yourself to counterparty risk and have that risk destroy your insurance hedge. If things go to hell, then I would expect that whatever gold you had contracted to be stored or purchased on your behalf will never ever reach your hands. If rule of law breaks down, then contracts become worthless and unenforceable. Unlikely, but why negate that part of your insurance?
Transaction costs can be high, around $30-$50 per ounce of gold, of course large volumes will get a discount. Under a scenario where gold demand rises substantially for whatever reason, you might face delays or have problems with anything other than physically held gold. Derivatives might become detached from the underlying asset. If you are going to be trading gold or silver, I strongly suggest against it. The market is just too volatile and small enough that large players can move the prices at will. Manipulation or not, you certainly have no advantage, and play on a level field only in the best case scenario. That's why I would rather pay higher transaction costs to gain physically possession because I won't be transaction very often, and physical possession has many advantages. Just my thoughts.
I would avoid Perth Mint, during the last metals "crunch", they were unable to meet withdrawal demand even though they are supposedly just storing your gold for you. In reality, either they buy gold derivatives like options and futures, and/or they loan out physical gold. Usually they can acquire enough physical gold to meet withdraw requests, but they really hurt their reputation last time.
I don't know anything about holding gold and silver in an IRA account, but I would advise you to have physical possession of your gold holdings, or at least physical access like with a bank vault. Otherwise there is counterparty risk, the companies that promise to hold your gold for you may do something foolish, like loan out the gold to get interest to an entity that goes bankrupt, or have their gold stolen thanks to lax security. During the last crisis, it was tough to get physical gold, and the vast majority of places who promised delivery of gold on a certain date had to reneg and extend their timeframe.
If you are buying gold as insurance, then no reason to expose yourself to counterparty risk and have that risk destroy your insurance hedge. If things go to hell, then I would expect that whatever gold you had contracted to be stored or purchased on your behalf will never ever reach your hands. If rule of law breaks down, then contracts become worthless and unenforceable. Unlikely, but why negate that part of your insurance?
Transaction costs can be high, around $30-$50 per ounce of gold, of course large volumes will get a discount. Under a scenario where gold demand rises substantially for whatever reason, you might face delays or have problems with anything other than physically held gold. Derivatives might become detached from the underlying asset. If you are going to be trading gold or silver, I strongly suggest against it. The market is just too volatile and small enough that large players can move the prices at will. Manipulation or not, you certainly have no advantage, and play on a level field only in the best case scenario. That's why I would rather pay higher transaction costs to gain physically possession because I won't be transaction very often, and physical possession has many advantages. Just my thoughts.
Jkkthunder,
I'm a Wisconsonite too. Listen. I've dealt with usagold in the past. They are good people and their website is second to none. But I have found another dealer that sells at a much more competitive rate. I have switched to them. The are CNI out of california. There website is http://www.golddealer.com/bullionpage.html Very competitive. Their buy/sell spread is less than 3.5%. Being a true Boglehead you should always consider cost.
Check them out. If you want to keep it simple, just buy American 1 oz. Eagles. The bars do not have the same resale value.
Stick with the 1 oz. bullion coins. The Eagle is the best, but you can make it interesting and buy a few Canadian Mapleleafs, Austrian Philharmonics, Chinese 1 oz.ers, Austalian Kangaroos, and 1 oz. Kruggarands. The one ouncers will be the most recognizable and tradable.
As far as selling them, you need to pay a 28% collectible tax rate on their increase in value. It is like a capital gains tax. That is true. But I would not recommend putting them in an IRA. Take possession of them. Put half in a safety deposit box at the bank and half in a hidden floor safe. Or all of it in one or the other depending upon how much you purchase.
Put in your IRA first bonds, then actively managed stock mutual funds, then index stock funds, and only after that would you put gold in an IRA.
And 10% is a very reasonable allocation of your net worth of financial resources. Swiss banks recommend to their wealthy clients 10-20%. Harry Browne recommended 25%. The most would be 30% according to Usagold's Michael Kosares.
Hope that helps.
I'm a Wisconsonite too. Listen. I've dealt with usagold in the past. They are good people and their website is second to none. But I have found another dealer that sells at a much more competitive rate. I have switched to them. The are CNI out of california. There website is http://www.golddealer.com/bullionpage.html Very competitive. Their buy/sell spread is less than 3.5%. Being a true Boglehead you should always consider cost.
Check them out. If you want to keep it simple, just buy American 1 oz. Eagles. The bars do not have the same resale value.
Stick with the 1 oz. bullion coins. The Eagle is the best, but you can make it interesting and buy a few Canadian Mapleleafs, Austrian Philharmonics, Chinese 1 oz.ers, Austalian Kangaroos, and 1 oz. Kruggarands. The one ouncers will be the most recognizable and tradable.
As far as selling them, you need to pay a 28% collectible tax rate on their increase in value. It is like a capital gains tax. That is true. But I would not recommend putting them in an IRA. Take possession of them. Put half in a safety deposit box at the bank and half in a hidden floor safe. Or all of it in one or the other depending upon how much you purchase.
Put in your IRA first bonds, then actively managed stock mutual funds, then index stock funds, and only after that would you put gold in an IRA.
And 10% is a very reasonable allocation of your net worth of financial resources. Swiss banks recommend to their wealthy clients 10-20%. Harry Browne recommended 25%. The most would be 30% according to Usagold's Michael Kosares.
Hope that helps.
I'm not a gold bug by any means, but it seems to me that the resale value on the underlying asset (the mass of the gold) would be more stable than the resale value of the underlying asset with a numismatic premium tacked on top. Or did you mean that the bars depreciate as soon as you buy them because there's a higher premium when you purchase them?mathu1968 wrote:Check them out. If you want to keep it simple, just buy American 1 oz. Eagles. The bars do not have the same resale value.
Some distinctions
I think I may have been confusing in what I wrote. Remember that the one ounce bullion coins are bullion, not collectible coins. So the bullion coins have no numismatic value.linuxizer wrote:I'm not a gold bug by any means, but it seems to me that the resale value on the underlying asset (the mass of the gold) would be more stable than the resale value of the underlying asset with a numismatic premium tacked on top. Or did you mean that the bars depreciate as soon as you buy them because there's a higher premium when you purchase them?mathu1968 wrote:Check them out. If you want to keep it simple, just buy American 1 oz. Eagles. The bars do not have the same resale value.
Now bullion comes in two forms, coin and bars. In what I have read, bullion coins are preferable because they are harder to counterfeit or to shave without it being notices. For example, the rough edge of the coin would be damaged or gone. Or the image on the bullion coin would be marred. Thus the coin would have to trade at a discount or be melted down. Bars are easier to shave. Also, one ounce coins are easy to valuate because spot prices are the price of one ounce of gold. Using other types of weights makes the coin less liquid at least in some markets. So for simplicity sake, I recommended 1 ounce bullion coins.
Now numismatic coins are a different animal altogether. They are first of all collectibles, secondarily a gold investment. Think of them as art that happen to be made out of gold. (Now the lower grades like MS 60-62 trade rather closely to the bullion price, so some like to invest in gold this way for reasons I won't go into.)
At times the numismatic market and the gold market will move in the same direction often with the gold numismatic coins being a leveraged play in gold. But it doesn't always work that way. Sometimes the numismatic market can go in the other direction to some extent. One needs to keep this in mind when investing in numismatic coins. There is nothing wrong with investing in this area, but one needs to ask what they are trying to achieve for their portfolio when they do this.
This is my understanding, I hope it is helpful, but I am not a professional, just an avid reader. I recommend Michael Kosares book, ABCs of gold investing, which you can find at www.usagold.com as a good place to find much of this.
- jjkthunder
- Posts: 151
- Joined: Thu Apr 05, 2007 12:30 am
- Location: Green Bay, Wisconsin
GOLD
Thanks on the info "mathu1968". I just ordered the book online thru USAGold.
Appreciate all the advice from you Bogleheads. I'll go with the American Eagle coins seeing the 1 ounce bars aren't as sellable. I thought it would have been the opposite seeing the bars are .9999 fine???
Another question?? Does the broker send into IRS when I buy these coins?
Sure hope the Packers beat the Vikings tonight but alsol hope Brett Favre has a good game. Just want to see about 3 interceptions out of Woodson & Harris. :lol:
Appreciate all the advice from you Bogleheads. I'll go with the American Eagle coins seeing the 1 ounce bars aren't as sellable. I thought it would have been the opposite seeing the bars are .9999 fine???
Another question?? Does the broker send into IRS when I buy these coins?
Sure hope the Packers beat the Vikings tonight but alsol hope Brett Favre has a good game. Just want to see about 3 interceptions out of Woodson & Harris. :lol:
GLI...................Jack |
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You can call me anything you want but please don't call me NORMAL
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- Joined: Mon Dec 08, 2008 9:30 am
- Location: Tulsa, Oklahoma
investing in gold bullion
I don't see the sense in buying bullion since when you sell, you have to pay an assay fee to verify. I buy either eagles or kruggerands since they have a ready identification for immediate cash exchange. I also don't see the sense in buying from some company that dosen't deal in cash. There is a plethora of gold dealers where you deal directly, pay cash for the going market, and hold the gold yourself, and when you get a comfortable gain, you sell for CASH. It isn't an investment; it a hedge based upon viscerale vicissitudes. My hedge is that our stupid gov't is putting too much money in circulation to avoid inflation. It is safety. In the past 6 mos. my return has been 13%--not bad in this market. It has a comfort factor knowing that if things got real bad, there is the yellow stuff to fall back on. Not really food for investors, but really a response to those things that keep one up late at night.
You do not understand the difference between taxable income and capital gains. Here is a quote from the IRS publication: "Investment property is a capital asset. Any gain or loss from its sale or trade is generally a capital gain or loss." Notice the absence of the word income.billern wrote:What!?!mptfan wrote:Not as income.jjkthunder wrote:Chicagobear wrote:Are you saying if I bought gold at $1000 per troy ounce with monies NOT in an IRA that in five years if I sold that gold at $2000 per troy ounce that the thousand profit on each ounce isn't taxable????I don't see any reason to put bullion in an IRA given that it doesn't generate taxable income.
It certainly is taxable income: http://www.irs.gov/publications/p17/ch1 ... k100033321
If you want to learn from the great wealth of financial knowledge on this board, then you should be more open minded and accept the fact that others are more knowledgeable on this subject than you are. You just might learn something.
Re: GOLD
Both gold bars and coins are fine gold. The American Eagles are actually 1.0909 ounces a piece. They contain one ounce of gold and the rest is a little silver and copper to make the coin tougher. So yes it is a 22 karat coin rather than 24 karat like most one ounce gold bars, but you have the same amount of gold. Both 22 and 24 karat is considered fine gold.jjkthunder wrote:Thanks on the info "mathu1968". I just ordered the book online thru USAGold.
Appreciate all the advice from you Bogleheads. I'll go with the American Eagle coins seeing the 1 ounce bars aren't as sellable. I thought it would have been the opposite seeing the bars are .9999 fine???
Another question?? Does the broker send into IRS when I buy these coins?
Sure hope the Packers beat the Vikings tonight but alsol hope Brett Favre has a good game. Just want to see about 3 interceptions out of Woodson & Harris. :lol:
And no the broker does not send info to the IRS. We have the responsibilty to report any profits upon sale. That is the only time one is taxed.
And yes, I hope the Packers win. I couldn't deal with Brett Favre beating the Packers. That just....doesn't sound right!
Last edited by mathu1968 on Mon Oct 05, 2009 2:13 pm, edited 1 time in total.
Re: investing in gold bullion
Kruggerands and Eagles are bullion. Since this gold is coined we don't have to do an assay on it. I didn't mean to imply a difference between these bullion adn bullion coins.Larry Johnson wrote:I don't see the sense in buying bullion since when you sell, you have to pay an assay fee to verify. I buy either eagles or kruggerands since they have a ready identification for immediate cash exchange. I also don't see the sense in buying from some company that dosen't deal in cash. There is a plethora of gold dealers where you deal directly, pay cash for the going market, and hold the gold yourself, and when you get a comfortable gain, you sell for CASH. It isn't an investment; it a hedge based upon viscerale vicissitudes. My hedge is that our stupid gov't is putting too much money in circulation to avoid inflation. It is safety. In the past 6 mos. my return has been 13%--not bad in this market. It has a comfort factor knowing that if things got real bad, there is the yellow stuff to fall back on. Not really food for investors, but really a response to those things that keep one up late at night.
At local gold firms in my state in state people have to pay sales tax. So to walk in and buy doesn't pay. the cost becomes prohibitive IMO. So I buy out of state where the state sales tax is waved, and even the shipping at CNI of California.
Finally, to pay cash and sell for cash without reporting is illegal. I don't want to deal with that.
Last edited by mathu1968 on Mon Oct 05, 2009 2:11 pm, edited 1 time in total.
Re: Ha Ha
Oh, now you want to get serious. Great. Let me keep it simple. Gold is a financial asset. If you believe in diversification, then diversify. If all you have is stocks, bonds and cash, you are missing one of the "special teams" of investing. But you keep coming here and treating gold like a joke. You are not doing honor to the boglehead tradition and misleading people IMO. So why not rethink things before you mislead people here into being improperly diversified.stratton wrote:You don't know just how much you made my point.mathu1968 wrote:You won't be joking for long.stratton wrote:I use lead bars and gold spray paint. :lol:
Paul
Thank you!
As I've said before, if the central banks of the world traditionally have held 10-15% of their reserves in gold, perhaps its time for you to throw away your Keynesian economic colored glasses.
Re: Ha Ha
mathu1968:
Thank you for the clarification about buillion coins vs. numismatic coins. I learned a lot reading your post.
Thank you for the clarification about buillion coins vs. numismatic coins. I learned a lot reading your post.
I take issue with your ire, however. Bogle himself is not a believer in infinite diversification into all possible asset classes. Quite the contrary, he has come out quite firmly against gold and commodities. This forum tends to entertain things consistent with the logic of the philosophy but not necessarily espoused by Bogle himself (>20% foreign stocks comes to mind, as does S-V tilting), and even has a healthy debate from time to time about the merits of gold, commodities/CCFs, and the Permanent Portfolio. That doesn't mean that someone who is skeptical of gold's value in a portfolio is automatically un-Bogleish. Quite the contrary, in fact. Spouting conspiracy theories about Keynesian glasses and making dire predictions about the future doesn't help your case any.mathu1968 wrote:But you keep coming here and treating gold like a joke. You are not doing honor to the boglehead tradition and misleading people IMO.
point well taken
You're right to take issue with my ire. I'm not a patient man. Point well taken.linuxizer wrote:mathu1968:
Thank you for the clarification about buillion coins vs. numismatic coins. I learned a lot reading your post.
I take issue with your ire, however. Bogle himself is not a believer in infinite diversification into all possible asset classes. Quite the contrary, he has come out quite firmly against gold and commodities. This forum tends to entertain things consistent with the logic of the philosophy but not necessarily espoused by Bogle himself (>20% foreign stocks comes to mind, as does S-V tilting), and even has a healthy debate from time to time about the merits of gold, commodities/CCFs, and the Permanent Portfolio. That doesn't mean that someone who is skeptical of gold's value in a portfolio is automatically un-Bogleish. Quite the contrary, in fact. Spouting conspiracy theories about Keynesian glasses and making dire predictions about the future doesn't help your case any.mathu1968 wrote:But you keep coming here and treating gold like a joke. You are not doing honor to the boglehead tradition and misleading people IMO.
I do think John Bogle makes a mistake not recognizing gold as a very unique asset class. I guess I fall in the Harry Browne paradigm, where I see stocks, bonds, cash and gold as the four major asset classes. All the finessing of all the other distinctions of the different types of stocks, and bonds etc. will not make up for leaving gold out of the equation.
So I see myself as falling broadly speaking into the Bogle tradition, but challenging it to be "consistent" in a certain sense.
My precious metals investment is Central Fund of Canada (symbol CEF), a closed-end investment company that holds gold and silver bullion in a Canadian bank. There is a gold-only version of this called Central Gold Fund (symbol GTU), also holding bullion in a Canadian bank. I have seen articles suggesting these funds are safer than the ETFs GLD and SLV.
If I had the cash to invest in physical precious metal, I would want at least some pre-1965 silver dimes and quarters. These coins aren't as controversial as gold and seem to me less likely to be subject to a hypothetical new law that prohibits citizens owning (hoarding?) precious metals. If it ever came to buying food or trading with a neighbor, silver dimes and quarters would be a lot handier than a piece of gold worth thousands of dollars, whatever "dollar" might come to represent.
I'm guessing a worst-case scenario for precious metals would be peace and prosperity, when other investments would do much better.
John
If I had the cash to invest in physical precious metal, I would want at least some pre-1965 silver dimes and quarters. These coins aren't as controversial as gold and seem to me less likely to be subject to a hypothetical new law that prohibits citizens owning (hoarding?) precious metals. If it ever came to buying food or trading with a neighbor, silver dimes and quarters would be a lot handier than a piece of gold worth thousands of dollars, whatever "dollar" might come to represent.
I'm guessing a worst-case scenario for precious metals would be peace and prosperity, when other investments would do much better.
John
Many wealthy people are little more than janitors of their possessions. |
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Frank Lloyd Wright, architect (1867-1959)
Re: point well taken
As I understand Browne (which is to say, only the little I've read on this forum), the PP is designed to preserve wealth, not create it. Gold is an asset with an expected real return of 0. Cash is an asset with an expected return that's possibly negative in real terms. So there's nothing inconsistent about ignoring those asset classes from that perspective.mathu1968 wrote:I do think John Bogle makes a mistake not recognizing gold as a very unique asset class. I guess I fall in the Harry Browne paradigm, where I see stocks, bonds, cash and gold as the four major asset classes. All the finessing of all the other distinctions of the different types of stocks, and bonds etc. will not make up for leaving gold out of the equation.
So I see myself as falling broadly speaking into the Bogle tradition, but challenging it to be "consistent" in a certain sense.
Now, I do think Larry (on the one hand) makes a compelling point that in the context of an overall portfolio certain volatile assets can be a net improvement to the portfolio if added in small amounts. But that's still a far cry from 25% gold. Gold appears to my uneducated eye to be a wild ride, and I don't hear advocates of gold saying now is the time to sell and lock in the gains that it brought about as part of a diversified portfolio. Rather I see just the opposite, which worries me. Proclaiming gold has risen x% in the last few years does nothing if you never sell when it's up, and I see no compelling reason why gold should not go down from here (or up, for that matter, or any rational way to determine the price of gold other than this is what it's been in the past).
Again, take this not as me being combatative but rather as the queries of someone who might add a little gold to the portfolio in the future but would have to have many questions addressed before then. And thanks for being civil in your last post .
Re: point well taken
I've studies Browne's portfolio a bit and follow it. It actually is designed to both preserve and grow wealth and has done a good job of both. It has had around a 9-10% nominal return since the early 1970s.linuxizer wrote:As I understand Browne (which is to say, only the little I've read on this forum), the PP is designed to preserve wealth, not create it. Gold is an asset with an expected real return of 0. Cash is an asset with an expected return that's possibly negative in real terms. So there's nothing inconsistent about ignoring those asset classes from that perspective.mathu1968 wrote:I do think John Bogle makes a mistake not recognizing gold as a very unique asset class. I guess I fall in the Harry Browne paradigm, where I see stocks, bonds, cash and gold as the four major asset classes. All the finessing of all the other distinctions of the different types of stocks, and bonds etc. will not make up for leaving gold out of the equation.
So I see myself as falling broadly speaking into the Bogle tradition, but challenging it to be "consistent" in a certain sense.
Now, I do think Larry (on the one hand) makes a compelling point that in the context of an overall portfolio certain volatile assets can be a net improvement to the portfolio if added in small amounts. But that's still a far cry from 25% gold. Gold appears to my uneducated eye to be a wild ride, and I don't hear advocates of gold saying now is the time to sell and lock in the gains that it brought about as part of a diversified portfolio. Rather I see just the opposite, which worries me. Proclaiming gold has risen x% in the last few years does nothing if you never sell when it's up, and I see no compelling reason why gold should not go down from here (or up, for that matter, or any rational way to determine the price of gold other than this is what it's been in the past).
Again, take this not as me being combatative but rather as the queries of someone who might add a little gold to the portfolio in the future but would have to have many questions addressed before then. And thanks for being civil in your last post .
I disagree with many who own gold that it will have a long term return of 0% long term. I use to believe that but now I think it could average 3-4% real return over the long run. I think that has been the case since the advent of the industrial revolution. Backtesting its real return to 1802 which is common I think is misleading IMHO.
I agree that some people could start jumping in and buying just because it is in a boom phase. They do it at times in regard to stocks and gold will be misused in the same manner.
I hope they come across the Bogle message of diversification and buying and holding. Puting 10-30% of ones portfolio in gold bullion is the portfolio recommendation that seems most respected by those who advocate gold ownership.
I have found craigr's posts to be the best on gold in general, and I recommend the book by Michael Kosares, The ABCs of Gold Investing, as a good place to go if you or anybody here is interested in possibly investing in gold. Can be found at usagold.com. The cheapest place to buy that I have found is at CNI of california. But I wouldn't want anybody here to buy something they aren't comfortable with and believe in, less the sell low and buy high.
My two cents for tonight.
Re: Ha Ha
I have to admit that up until this past year, I have scoffed at the Gold Bugs and their preparation for anarchy, but maybe you guys are smarter than I originally gave you credit for. This quote is from an article on Bloombergs:mathu1968 wrote:Oh, now you want to get serious. Great. Let me keep it simple. Gold is a financial asset. If you believe in diversification, then diversify. If all you have is stocks, bonds and cash, you are missing one of the "special teams" of investing. But you keep coming here and treating gold like a joke. You are not doing honor to the boglehead tradition and misleading people IMO. So why not rethink things before you mislead people here into being improperly diversified.stratton wrote:You don't know just how much you made my point.mathu1968 wrote:You won't be joking for long.stratton wrote:I use lead bars and gold spray paint. :lol:
Paul
Thank you!
As I've said before, if the central banks of the world traditionally have held 10-15% of their reserves in gold, perhaps its time for you to throw away your Keynesian economic colored glasses.
I would definitely want to have the gold somewhere that I could have it immediately in my possession - I strongly doubt a bank in a foreign country could be depended upon for delivery if the above scenario did occur.Oct. 7 (Bloomberg) -- A year ago today, Royal Bank of Scotland Group Plc and HBOS Plc were close to collapse, causing a chain reaction that could have ended with riots in U.K. cities, security analysts and economists said.
Bank failures would have forced the government to cancel police leave and deploy troops as the breakdown of the financial payments system threatened the ability of utilities to provide essential services, said David Livingstone, a fellow at the Royal Institute for International Affairs in London, a former adviser to the government’s Cobra crisis response committee.
“You are talking about a situation with mass disorder and panic,” the former Royal Navy officer said in an interview. There would be “riots, pandemonium, everyone fending for themselves.”
On the other hand, if the local banks closed, one couldn't get access to his safe deposit box either.
Wayne
" Successful investing involves doing just a few things right, and avoiding serious mistakes." - J. Bogle
Uh, have you looked at your Form 1040 lately. Line 13 is capital gain or loss. Line 22 is the sum of total income and includes capital gains from line 13. Included in total income:mptfan wrote:You do not understand the difference between taxable income and capital gains. Here is a quote from the IRS publication: "Investment property is a capital asset. Any gain or loss from its sale or trade is generally a capital gain or loss." Notice the absence of the word income.billern wrote:What!?!mptfan wrote:Not as income.jjkthunder wrote:Chicagobear wrote:Are you saying if I bought gold at $1000 per troy ounce with monies NOT in an IRA that in five years if I sold that gold at $2000 per troy ounce that the thousand profit on each ounce isn't taxable????I don't see any reason to put bullion in an IRA given that it doesn't generate taxable income.
It certainly is taxable income: http://www.irs.gov/publications/p17/ch1 ... k100033321
If you want to learn from the great wealth of financial knowledge on this board, then you should be more open minded and accept the fact that others are more knowledgeable on this subject than you are. You just might learn something.
All of these are taxable income. Some types of income have different tax rates than others, but they are all taxable income. Perhaps you intended to distinguish between what is called ordinary income and capital gains income, but both are taxable as billern pointed out.Wages
Dividends
Alimony
Pensions
Unemployment compensation
Capital gains
Capital gains are also included in the Adjusted Gross Income which is important for determining such things as whether you are eligible to deduct an IRA, how much of social security is taxable, and the phase out of exemptions. So, yes, capital gains are an important component of taxable income.