Holding Gold as "Doomsday Fund"

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jajlrajrf
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Re: Holding Gold as "Doomsday Fund"

Post by jajlrajrf »

Outer Marker wrote: Tue Apr 28, 2020 4:31 pm I'm not about to go out and dig a bunker, but a modest stash in gold would preserve financial liquidity
It would substantially reduce your liquidity. Completely apart from whether it's a good or bad investment, physical gold is an amazingly illiquid commodity. It's not as illiquid as real estate, but it's far, far from cash. Setting aside the risk of robbery, in order to transact with physical gold in your possession you'll be paying the cost of physical security to transport it and then pay to have it assayed, because nobody is going to buy your gold without having its purity validated. (Gold eagles don't have to be assayed in today's market only because the government guarantees them; if you're hypothesizing apocalypse, that guarantee isn't there any more.)

You can of course keep your gold in a certified depository. That costs money.

By all means you should buy what you want to buy, just don't fool yourself about its liquidity. It's staggeringly inconvenient.
Last edited by jajlrajrf on Tue Apr 28, 2020 11:21 pm, edited 3 times in total.
sergio
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Re: Holding Gold as "Doomsday Fund"

Post by sergio »

I used to think gold was totally worthless but then read about how rich people who fled their countries were often able to take a small amount of wealth with them in the form of expensive jewelry...
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Re: Holding Gold as "Doomsday Fund"

Post by willthrill81 »

stuper1 wrote: Tue Apr 28, 2020 4:25 pm Believe it or not, there's no rule that you can't own gold along with guns, ammo, food, etc.
Correct. It's not an either/or proposition.
stuper1 wrote: Tue Apr 28, 2020 4:25 pm As for what this pandemic shows about gold, I would note that the gold price is up 34% over the last 12 months, and the stock market is down 2%. I'm not saying to own nothing but gold, but it does act as a great diversifier. It's good to hold some of it in an ETF, so you can easily sell some when it's high for rebalancing into stocks/bonds, or buy some when the gold price is low.
FWIW, gold has outperformed both stocks and bonds since the year 2000.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: Holding Gold as "Doomsday Fund"

Post by Outer Marker »

willthrill81 wrote: Tue Apr 28, 2020 11:03 pm FWIW, gold has outperformed both stocks and bonds since the year 2000.
Wow. That is an understatement. I just looked it up on yahoo finance.

In the last 20 years, TSM is up 150%, and Gold is up 450%. I wish I had been on that train!

Apprehensive about reversion to the mean, but I'm now seriously thinking about moving my inflation hedge from 10% TIPS to 10% gold. I'd hold half of it physically in Canadian Maple Leafs, and half of it in a tradable ETF. The Maple Leafs would serve my doomsday fund purpose wereas the ETFs could be used for what appear to be some pretty spectacular rebalancing bonus opportunities.
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Re: Holding Gold as "Doomsday Fund"

Post by jebmke »

sergio wrote: Tue Apr 28, 2020 10:58 pm I used to think gold was totally worthless but then read about how rich people who fled their countries were often able to take a small amount of wealth with them in the form of expensive jewelry...
If I sold my wife's jewelry the only use I'd have for the money is for a divorce attorney.
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Re: Holding Gold as "Doomsday Fund"

Post by Jack FFR1846 »

Way to choose dates to prove your point. Can you go back to 2000 and buy gold? Ok, Doc Brown.

I picked the first charting tool I could find. It doesn't go back 20 years, but does go back 30. The advantage for stocks is that it returned 3X what both gold and silver did using my own cherry picked dates.

https://www.longtermtrends.net/stocks-v ... omparison/

For myself, I was uneducated and bought some silver right around 2014, then in 2015. The actual price today is LESS than what I paid. (I paid $20, today, it's $15, down 25%). Had I bought gold, it's up. ($buy $1212, today $1710, up 41%). Stocks? Up about 50%. (buy $1800, today $2800, up 56%). I also learned that the premium to buy silver and discount to sell is a much higher percentage than that for gold. I bought silver to keep my investment amount smaller and make it easier to sell as any pawn shop or coin dealer and even craigslist buyer will buy silver. Many won't buy gold because the penalty for fake coins or bars is much higher.

Edit to add: Think about it. If things got so bad that money became worthless, what would be useful? Well, we had storms a few weeks ago and the first thing I did was roll the generator out of the garage, fill it up with gas from a gas can in the garage (actually mixed with oil for the chainsaws) and hooked up our 2 refrigerators, the sump pump, the FIOS box and some power strips to our living room. We were able to keep the food cold, the basement safe from water and I was watching cable tv while surfing the internet. I already have the generator, so would want gas and motor oil at the ready. Of course gas goes bad, so a rotating stock of maybe 30 gallons that I'd dump into the cars and replenish. For me, water is easy. I live across the street from a decommissioned reservoir. If it's winter, you need heat. I've currently got 2 cords of firewood split and stacked and a forced hot air wood fired furnace blowing heat. I'd need enough fuel oil in the tank to keep our water heater going and I could tap into that to get fuel for my diesel tractor to move stuff as needed. I expect to keep running the chain saws, so enough premium fuel mixed with 2 cycle oil to go for a while. And bar & chain oil. Of course food. So as much canned food that won't go bad and that we can rotate through. Vegetables, ravioli, soups, whatever. This is the kind of stuff that is useful. Gold is useless in an emergency. Sorry.
Last edited by Jack FFR1846 on Wed Apr 29, 2020 8:32 am, edited 1 time in total.
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smitcat
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Re: Holding Gold as "Doomsday Fund"

Post by smitcat »

Jack FFR1846 wrote: Wed Apr 29, 2020 8:12 am Way to choose dates to prove your point. Can you go back to 2000 and buy gold? Ok, Doc Brown.

I picked the first charting tool I could find. It doesn't go back 20 years, but does go back 30. The advantage for stocks is that it returned 3X what both gold and silver did using my own cherry picked dates.

https://www.longtermtrends.net/stocks-v ... omparison/

For myself, I was uneducated and bought some silver right around 2014, then in 2015. The actual price today is LESS than what I paid. (I paid $20, today, it's $15, down 25%). Had I bought gold, it's up. ($buy $1212, today $1710, up 41%). Stocks? Up about 50%. (buy $1800, today $2800, up 56%). I also learned that the premium to buy silver and discount to sell is a much higher percentage than that for gold. I bought silver to keep my investment amount smaller and make it easier to sell as any pawn shop or coin dealer and even craigslist buyer will buy silver. Many won't buy gold because the penalty for fake coins or bars is much higher.
We do not hold much gold so do not have too much experience there but the premium to buy and sell gold , silver and palladium have been very similar in our case. Perhaps just the timing but not really different enough to make much of a difference in our case.
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Re: Holding Gold as "Doomsday Fund"

Post by Index Fan »

During the Argentine fiscal/currency collapse in the early 2000s, gold and silver came in handy in barter situations. Looking at a small amount of PMs as portfolio insurance makes sense.
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Re: Holding Gold as "Doomsday Fund"

Post by sergio »

I know gold/precious metals is not a boglehead thing, but if one wanted to have, say 1-2% in that asset class and didn't want to own it physically, what would be the best option? AFAIK most of the funds just hold mining/processing companies, VGPMX is no longer a PM fund, etc.
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Re: Holding Gold as "Doomsday Fund"

Post by willthrill81 »

Jack FFR1846 wrote: Wed Apr 29, 2020 8:12 am Way to choose dates to prove your point. Can you go back to 2000 and buy gold? Ok, Doc Brown.

I picked the first charting tool I could find. It doesn't go back 20 years, but does go back 30. The advantage for stocks is that it returned 3X what both gold and silver did using my own cherry picked dates.

https://www.longtermtrends.net/stocks-v ... omparison/

For myself, I was uneducated and bought some silver right around 2014, then in 2015. The actual price today is LESS than what I paid. (I paid $20, today, it's $15, down 25%). Had I bought gold, it's up. ($buy $1212, today $1710, up 41%). Stocks? Up about 50%. (buy $1800, today $2800, up 56%). I also learned that the premium to buy silver and discount to sell is a much higher percentage than that for gold. I bought silver to keep my investment amount smaller and make it easier to sell as any pawn shop or coin dealer and even craigslist buyer will buy silver. Many won't buy gold because the penalty for fake coins or bars is much higher.

Edit to add: Think about it. If things got so bad that money became worthless, what would be useful? Well, we had storms a few weeks ago and the first thing I did was roll the generator out of the garage, fill it up with gas from a gas can in the garage (actually mixed with oil for the chainsaws) and hooked up our 2 refrigerators, the sump pump, the FIOS box and some power strips to our living room. We were able to keep the food cold, the basement safe from water and I was watching cable tv while surfing the internet. I already have the generator, so would want gas and motor oil at the ready. Of course gas goes bad, so a rotating stock of maybe 30 gallons that I'd dump into the cars and replenish. For me, water is easy. I live across the street from a decommissioned reservoir. If it's winter, you need heat. I've currently got 2 cords of firewood split and stacked and a forced hot air wood fired furnace blowing heat. I'd need enough fuel oil in the tank to keep our water heater going and I could tap into that to get fuel for my diesel tractor to move stuff as needed. I expect to keep running the chain saws, so enough premium fuel mixed with 2 cycle oil to go for a while. And bar & chain oil. Of course food. So as much canned food that won't go bad and that we can rotate through. Vegetables, ravioli, soups, whatever. This is the kind of stuff that is useful. Gold is useless in an emergency. Sorry.
Below is a post I wrote in January of 2019 that's pertinent to several of your points.
willthrill81 wrote: Thu Jan 17, 2019 5:59 pm What does buying gold in the event of hard times have to do with prepping? Do you think Jack Bogle was a prepper, since he advocated 5% of a portfolio be devoted to it?

Venezuelans buy food with gold today. They sell their gold for the local currency and then immediately buy the food with the local currency. They don't trade gold for the local currency until they're ready to buy food due to the hyperinflation occurring there now.

And it doesn't even have to get that bad for gold to be useful. It was useful in 1977-1981 when stocks were losing to inflation and bonds were getting decimated. It was useful throughout the financial crisis and has even had a higher real return than TBM since 2007. And for what it's worth, the tangency portfolio (i.e. most efficient portfolio) given TSM, ITT, and gold from 1972-2018 included a 10% allocation to gold.

If you don't want it, fine, but owning gold doesn't make someone a survivalist.
You've lost money from gold since 2014. You know what else has lost money after inflation since 2007? Ex-U.S. stock. Does that mean that all BHs should abandon it? Stocks have trounced bonds since then as well, but I doubt that you're 100% stock. I know that you understand that having a portfolio means that not everything you own will do well all the time.

The above is pertinent for comparatively good times, not 'doomsday scenarios'.

Gold is not an either/or proposition when it comes to being prepared for disasters. You can have gold and chain saws, generators, food, water, medical supplies, etc. I know because we do.

As 'disaster insurance', gold is not intended to be useful in the middle of the disaster. It's intended to be used as a substitute for fiat currency in the reconstruction efforts after the disaster is over. That requires you to have enough other supplies to make it through the disaster.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: Holding Gold as "Doomsday Fund"

Post by smitcat »

Jack FFR1846 wrote: Wed Apr 29, 2020 8:12 am Way to choose dates to prove your point. Can you go back to 2000 and buy gold? Ok, Doc Brown.

I picked the first charting tool I could find. It doesn't go back 20 years, but does go back 30. The advantage for stocks is that it returned 3X what both gold and silver did using my own cherry picked dates.

https://www.longtermtrends.net/stocks-v ... omparison/

For myself, I was uneducated and bought some silver right around 2014, then in 2015. The actual price today is LESS than what I paid. (I paid $20, today, it's $15, down 25%). Had I bought gold, it's up. ($buy $1212, today $1710, up 41%). Stocks? Up about 50%. (buy $1800, today $2800, up 56%). I also learned that the premium to buy silver and discount to sell is a much higher percentage than that for gold. I bought silver to keep my investment amount smaller and make it easier to sell as any pawn shop or coin dealer and even craigslist buyer will buy silver. Many won't buy gold because the penalty for fake coins or bars is much higher.

Edit to add: Think about it. If things got so bad that money became worthless, what would be useful? Well, we had storms a few weeks ago and the first thing I did was roll the generator out of the garage, fill it up with gas from a gas can in the garage (actually mixed with oil for the chainsaws) and hooked up our 2 refrigerators, the sump pump, the FIOS box and some power strips to our living room. We were able to keep the food cold, the basement safe from water and I was watching cable tv while surfing the internet. I already have the generator, so would want gas and motor oil at the ready. Of course gas goes bad, so a rotating stock of maybe 30 gallons that I'd dump into the cars and replenish. For me, water is easy. I live across the street from a decommissioned reservoir. If it's winter, you need heat. I've currently got 2 cords of firewood split and stacked and a forced hot air wood fired furnace blowing heat. I'd need enough fuel oil in the tank to keep our water heater going and I could tap into that to get fuel for my diesel tractor to move stuff as needed. I expect to keep running the chain saws, so enough premium fuel mixed with 2 cycle oil to go for a while. And bar & chain oil. Of course food. So as much canned food that won't go bad and that we can rotate through. Vegetables, ravioli, soups, whatever. This is the kind of stuff that is useful. Gold is useless in an emergency. Sorry.
"If things got so bad that money became worthless, what would be useful? Well, we had storms a few weeks ago and the first thing I did was roll the generator out of the garage, fill it up with gas from a gas can in the garage (actually mixed with oil for the chainsaws) and hooked up our 2 refrigerators, the sump pump, the FIOS box and some power strips to our living room. We were able to keep the food cold, the basement safe from water and I was watching cable tv while surfing the internet. I already have the generator, so would want gas and motor oil at the ready. Of course gas goes bad, so a rotating stock of maybe 30 gallons that I'd dump into the cars and replenish. For me, water is easy. I live across the street from a decommissioned reservoir. If it's winter, you need heat. I've currently got 2 cords of firewood split and stacked and a forced hot air wood fired furnace blowing heat. I'd need enough fuel oil in the tank to keep our water heater going and I could tap into that to get fuel for my diesel tractor to move stuff as needed. I expect to keep running the chain saws, so enough premium fuel mixed with 2 cycle oil to go for a while. And bar & chain oil. Of course food. So as much canned food that won't go bad and that we can rotate through. Vegetables, ravioli, soups, whatever. This is the kind of stuff that is useful. Gold is useless in an emergency. Sorry."
Suggest you add plans for medical supplies, training , and the ability to maintain a perimeter.
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arcticpineapplecorp.
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Re: Holding Gold as "Doomsday Fund"

Post by arcticpineapplecorp. »

Outer Marker wrote: Tue Apr 28, 2020 8:31 pm
arcticpineapplecorp. wrote: Tue Apr 28, 2020 8:01 pm check out libertarian summer camp (planet money) then see how easy it is to transact with gold:

https://www.npr.org/sections/money/2017 ... ummer-camp
Ehh. Well, I don't want to stray into forbidden political territory on the board. But although my Dad was a libertarian, he was one shrewd old dude. Smarter than me, Mesna society, and PhD from one of the best MidWestern Universities. I don't think I need a "bunker" but at the same time, I don't think that a safe reserve in precious metals is unreasonable.
no, provided your other resources (i.e., stocks, bonds) will provide for you through your lifetime.
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
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Re: Holding Gold as "Doomsday Fund"

Post by Dottie57 »

If we truly hit a doomsday scenario, I will want food, water, shelter and appropriate clothing. Gold won’t do too much good.
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Re: Holding Gold as "Doomsday Fund"

Post by tetractys »

Outer Marker wrote: Tue Apr 28, 2020 3:55 pm...Which has me thinking . . . I'm considering buying $100,000 in physical gold and $10,000 in silver coins. I wouldn't consider it as part of my portfolio, but an insurance policy against "the worst." I know gold as an investment has generally been a stinker. It doesn't do anything productive; it doesn't turn a profit; it just exists. But, gold has been used as currency since at least 700BC, and will almost certainly never be worthless. If I have a stash in a safety deposit box, I can probably get to it before total pandamonium breaks loose. And, if I have such a stash, I'll be comparatively very wealthy to those who don't. . .
For total pandemonium you may only want what you can carry secretly while running and swimming really fast. I would think maybe one or two pounds of the smallest coins in a very sturdy pouch may be helpful, or it may just get you killed.
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Re: Holding Gold as "Doomsday Fund"

Post by Swivelguy »

Index Fan wrote: Wed Apr 29, 2020 9:11 am During the Argentine fiscal/currency collapse in the early 2000s, gold and silver came in handy in barter situations. Looking at a small amount of PMs as portfolio insurance makes sense.
I'm very curious in the specifics of this. Do you have any articles or firsthand accounts of in what way PMs were used?
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Re: Holding Gold as "Doomsday Fund"

Post by halfnine »

My thoughts:

10 oz of physical gold per person has gotten people out of countries.

10% allocation to gold has reduced left tail risk across countries in the developed world.

In a crisis that is significant enough for gold to be of tremendous value it would be more viable to have it for when the world recovers than to try to use it and have it taken away from you.

In a really major crisis guns, ammo, farmland, food storage, etc isn't going to save you. Not unless you have a compound and a mini army. And even then you would probably still go the way of the Branch Davidians. Having a valuable skill, connections, street smarts, entrepreneurial spirit, etc is what would be necessary to get through the lean years.

Those younger than 5 and older than 65 are unlikely to see the other side of a major crisis where gold goes exponential.
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Re: Holding Gold as "Doomsday Fund"

Post by willthrill81 »

Swivelguy wrote: Wed Apr 29, 2020 3:27 pm
Index Fan wrote: Wed Apr 29, 2020 9:11 am During the Argentine fiscal/currency collapse in the early 2000s, gold and silver came in handy in barter situations. Looking at a small amount of PMs as portfolio insurance makes sense.
I'm very curious in the specifics of this. Do you have any articles or firsthand accounts of in what way PMs were used?
It happened in Venezuela not long ago when they experienced hyper inflation. You can find articles about it via Google. Those who had gold and silver would sell it at pawn shops for the local currency and then immediately buy food and supplies with it. Those who had enough of it used it to get out of the country altogether.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
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Re: Holding Gold as "Doomsday Fund"

Post by wassabi »

The problem I see with these gold threads is that people treat gold as a trade-off for food, water, shelter, clothing, and even guns/ammo. Gold does not prevent someone from owning and being well-stocked in all those things. Just because someone wants to own gold for an unlikely SHTF scenario does not mean that person is neglecting to think about the other basic needs.
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Re: Holding Gold as "Doomsday Fund"

Post by Outer Marker »

So, wow. I had a rather eye opening conversation with an extremely successful relative who is a true "gold bug." Based on the sale of his U.S. businesses, I'd estimate his net worth in the $30-50m range. I assumed gold was a diversified share of his portfolio, but its the lion's share. He owns not a single conventional stock or mutual fund. Other investments are all in individual, privately held, businesses in the US and Latin America. His rate of return from the 1970s exceeds Buffet's.

He pointed out that the value of the USD from 1917 to present declined by 97%. Major banks and Goldman Sacs are increasing their gold holdings.

My plan is to buy my "doomsday fund" in gold coins, and, in addition, DCA my 10% inflation hedge from TIPS into physical gold ETFs over the next six months.
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Re: Holding Gold as "Doomsday Fund"

Post by Irenaeus »

Patzer wrote: Tue Apr 28, 2020 6:50 pm Right now 5% of my portfolio is in gold as a hedge, but it's in an ETF, not physical. I held physical gold from 2008-2010 and it was expensive to trade in and out of. I also have a few hundred dollars in silver coins, just as a hobby.

I think an idea of a doomsday hedge is okay, but what will you be trading your gold and silver for?
Food, water, medicine, tools, ammo, alcohol, toilet paper (apparently)?
I think investing in having a surplus of those items would be more cost efficient.
After that, how much physical gold and silver do you really need? If the disaster was regional 25K could probably get you out of there and with a little bit of money to start over. If it's global, I am not so sure about trading with gold. It might make you stand out as rich and that probably would not be good in a world that has really gone down the drain. Whereas you could easily trade from a supply of 100 bottles of whiskey, without much notice and far less chance of getting robbed.

I used to play pool in a biker bar, and I quickly learned not to play for money, because some people would get real salty even at $5 bucks a game if they lost a few in a row.
Funny thing was, if I played for 1 beer/game, I could drink for free all week and no one ever complained about losing.

It's perfectly acceptable to "pay" your friends to do $300 in hard labor helping you move, with a 6 pack of beer and a $10 pizza.

While your plan to hold gold sounds very rational, it is probably good to consider that people are not entirely rational on a good day, and would be even less so during a major crisis. Bartering in that world would probably be more likely to instill a sense of goodwill and camaraderie than paying for stuff with gold.

Also, if the crisis is short-term you might make a few friends by having extra supplies around. I happen to have several months supply of paper products and have endeared myself to a few neighbors with free rolls of toilet paper.
In what type of account do you hold your gold ETF? Thank you.
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Re: Holding Gold as "Doomsday Fund"

Post by Silence Dogood »

Jack FFR1846 wrote: Wed Apr 29, 2020 8:12 am Think about it. If things got so bad that money became worthless, what would be useful?
Social capital.
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Re: Holding Gold as "Doomsday Fund"

Post by stuper1 »

Outer Marker wrote: Wed Apr 29, 2020 5:03 pm So, wow. I had a rather eye opening conversation with an extremely successful relative who is a true "gold bug." Based on the sale of his U.S. businesses, I'd estimate his net worth in the $30-50m range. I assumed gold was a diversified share of his portfolio, but its the lion's share. He owns not a single conventional stock or mutual fund. Other investments are all in individual, privately held, businesses in the US and Latin America. His rate of return from the 1970s exceeds Buffet's.

He pointed out that the value of the USD from 1917 to present declined by 97%. Major banks and Goldman Sacs are increasing their gold holdings.

My plan is to buy my "doomsday fund" in gold coins, and, in addition, DCA my 10% inflation hedge from TIPS into physical gold ETFs over the next six months.
If I did the math right, that gives you about 13% gold in your portfolio. To me that is a very reasonable allocation. I think the key though is to rebalance to your target percentage when necessary (either on a set schedule like once or twice a year, or at whatever bands you choose). That makes you automatically, unemotionally sell high (whatever asset class has gone up in value) and buy low (whatever asset class has gone down). You probably know all this already, but I just wanted to make sure.
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Re: Holding Gold as "Doomsday Fund"

Post by Silence Dogood »

wassabi wrote: Wed Apr 29, 2020 4:09 pm The problem I see with these gold threads is that people treat gold as a trade-off for food, water, shelter, clothing, and even guns/ammo. Gold does not prevent someone from owning and being well-stocked in all those things. Just because someone wants to own gold for an unlikely SHTF scenario does not mean that person is neglecting to think about the other basic needs.
For most people, it is a trade-off.
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Re: Holding Gold as "Doomsday Fund"

Post by Outer Marker »

stuper1 wrote: Wed Apr 29, 2020 5:16 pm If I did the math right, that gives you about 13% gold in your portfolio. To me that is a very reasonable allocation. I think the key though is to rebalance to your target percentage when necessary (either on a set schedule like once or twice a year, or at whatever bands you choose). That makes you automatically, unemotionally sell high (whatever asset class has gone up in value) and buy low (whatever asset class has gone down). You probably know all this already, but I just wanted to make sure.
Thank you, but not quite. I was first planning to just buy the $100K in gold coins and burry them in the back yard, so to speak, and not count them as part of my portfolio. I'm now thinking to buy the $100K in physical gold coins include them in the portfolio, and dump TIPS in favor of gold ETFs to bring total gold holdings to 10% of portfolio.

Which would mean:

70% stocks
20% bonds
10% gold
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Re: Holding Gold as "Doomsday Fund"

Post by JBTX »

I'm not a big gold fan but I don't deny there could be portfolio diversification benefits. But for those that advocate a large stash of physical gold, I'd like to understand the specifics of the scenario where it is better to hold physical gold. If the working financial markets just stop working, how would you turn physical gold bars or 1 ounce coins into food, water, ammo, etc? One ounce now buys approx 3 months of groceries.

I could theoretically see some utility in small pieces of gold jewelry or silver coins.
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Re: Holding Gold as "Doomsday Fund"

Post by Jack FFR1846 »

willthrill81 wrote: ↑Thu Jan 17, 2019 5:59 pm

1: Venezuelans buy food with gold today. They sell their gold for the local currency and then immediately buy the food with the local currency. They don't trade gold for the local currency until they're ready to buy food due to the hyperinflation occurring there now.

2: And it doesn't even have to get that bad for gold to be useful. It was useful in 1977-1981 when stocks were losing to inflation and bonds were getting decimated.

3: It was useful throughout the financial crisis and has even had a higher real return than TBM since 2007. And for what it's worth, the tangency portfolio (i.e. most efficient portfolio) given TSM, ITT, and gold from 1972-2018 included a 10% allocation to gold.
Quoting part of your quote. I added numbers to your quote.

1: I have been to Aruba, where I could see Venezuela from the beach. I don't live in Venezuela, so this doesn't apply to me.

2: Choosing time periods to prove a point only shows that there exist time periods that prove a point. From 2014 to today, silver actually lost me money. Had I gone back to 1970, I'd have done better.

3: In the US, it was not legal to own gold in 1972. You'd have had to wait until the beginning of 1975 to own it in the US. The biggest rise was after it became legal to own. Now, in 1972, something that I actually did was look through the coins in the cash register at Burger Chef, where I worked in high school. I'd pull silver out of circulation. I remember at the time, it was worth about 3X face. Certainly worth trading new coins for and sticking in a box. I cashed them all in during the early 80's as I was paying my own way through college.

If you want to hold gold, that's absolutely fine. I get it. I still have some silver coins. Down to only dollars and halves with some random orphan junk. They're cool to take out and look at.

Stepping way back, the fact that you have extra money to buy gold or generators or stocks means you're doing it right. Saving money. Spending less than you earn. For that, I have no arguments about.

Should we talk about BMW 2002's and square tail lights vs round?
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Re: Holding Gold as "Doomsday Fund"

Post by Outer Marker »

JBTX wrote: Wed Apr 29, 2020 5:32 pm I'm not a big gold fan but I don't deny there could be portfolio diversification benefits. But for those that advocate a large stash of physical gold, I'd like to understand the specifics of the scenario where it is better to hold physical gold. If the working financial markets just stop working, how would you turn physical gold bars or 1 ounce coins into food, water, ammo, etc? One ounce now buys approx 3 months of groceries.

I could theoretically see some utility in small pieces of gold jewelry or silver coins.
1. If you hold physical gold you will always have it. If the banks shut down, it will still be available and "burried in your backyard."

2. Gold has been currency since at least 700 BC. It is never going to be worthless.

3. The post collapse market (if it happens) will sort out what the right price is for gold. It will be worth more than bankrupt gov't issued paper.

4. I want to hold gold coins issued by a reputable government, vs. stamped bars that could be counterfiet. Canadian Golden Maple leafs seem to have the lowest cost per ounce relative to the spot price. I think someone would be willing to trade me a month's groceries for one of those.
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Re: Holding Gold as "Doomsday Fund"

Post by stuper1 »

Outer Marker wrote: Wed Apr 29, 2020 5:25 pm Which would mean:

70% stocks
20% bonds
10% gold
That is likely to be much more resilient than a 70/30 portfolio.
JBTX
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Re: Holding Gold as "Doomsday Fund"

Post by JBTX »

Outer Marker wrote: Wed Apr 29, 2020 5:43 pm
JBTX wrote: Wed Apr 29, 2020 5:32 pm I'm not a big gold fan but I don't deny there could be portfolio diversification benefits. But for those that advocate a large stash of physical gold, I'd like to understand the specifics of the scenario where it is better to hold physical gold. If the working financial markets just stop working, how would you turn physical gold bars or 1 ounce coins into food, water, ammo, etc? One ounce now buys approx 3 months of groceries.

I could theoretically see some utility in small pieces of gold jewelry or silver coins.
1. If you hold physical gold you will always have it. If the banks shut down, it will still be available and "burried in your backyard."

2. Gold has been currency since at least 700 BC. It is never going to be worthless.

3. The post collapse market (if it happens) will sort out what the right price is for gold. It will be worth more than bankrupt gov't issued paper.

4. I want to hold gold coins issued by a reputable government, vs. stamped bars that could be counterfiet. Canadian Golden Maple leafs seem to have the lowest cost per ounce relative to the spot price. I think someone would be willing to trade me a month's groceries for one of those.
Thanks for the response but you didn’t really answer my question.
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wassabi
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Re: Holding Gold as "Doomsday Fund"

Post by wassabi »

Silence Dogood wrote: Wed Apr 29, 2020 5:19 pm
wassabi wrote: Wed Apr 29, 2020 4:09 pm The problem I see with these gold threads is that people treat gold as a trade-off for food, water, shelter, clothing, and even guns/ammo. Gold does not prevent someone from owning and being well-stocked in all those things. Just because someone wants to own gold for an unlikely SHTF scenario does not mean that person is neglecting to think about the other basic needs.
For most people, it is a trade-off.
I don't get that impression. However, the OP gave the impression the money he would use to purchase gold was not from his core portfolio holdings. I'm not sure why this thread gets so deep into the philosophical debate between water/food vs. gold when OP does not have to make that decision (he said he is already stocked up in those other categories).
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Re: Holding Gold as "Doomsday Fund"

Post by willthrill81 »

stuper1 wrote: Wed Apr 29, 2020 5:47 pm
Outer Marker wrote: Wed Apr 29, 2020 5:25 pm Which would mean:

70% stocks
20% bonds
10% gold
That is likely to be much more resilient than a 70/30 portfolio.
Over the last ~50 years, it would have supported a higher withdrawal rate and had significantly less start-date sensitivity than a 70/30 AA.

Over that same time frame, I literally cannot find any drawback to a 10% allocation to gold for a long-term investor using any of the standard metrics.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
Willmunny
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Re: Holding Gold as "Doomsday Fund"

Post by Willmunny »

I think there is a distinction in the type of "doomsday" people are thinking about in this thread. If it is a global doomsday (e.g., global nuclear war), then gold may very well not be something that gives a person purchasing power or the ability to barter effectively.

If the doomsday is a localized one (e.g., a currency crisis, local terrorism or violence, government instability, etc.), then gold may turn out to be valuable both within the localized doomsday scenario and certainly outside of it. The thought is people could transport it along with themselves to other countries that are not experiencing such a localized doomsday scenario and trade it for the currency of the other country that still has purchasing power. In this scenario, it is not as if it will be directly used for barter day to day.
Johnnyone
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Re: Holding Gold as "Doomsday Fund"

Post by Johnnyone »

Jack thought 5 percent was okay, watch the perfect portfolio at 56:10.

https://m.youtube.com/watch?v=3uJbHREmUs4
stuper1
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Re: Holding Gold as "Doomsday Fund"

Post by stuper1 »

willthrill81 wrote: Wed Apr 29, 2020 8:08 pm
stuper1 wrote: Wed Apr 29, 2020 5:47 pm
Outer Marker wrote: Wed Apr 29, 2020 5:25 pm Which would mean:

70% stocks
20% bonds
10% gold
That is likely to be much more resilient than a 70/30 portfolio.
Over the last ~50 years, it would have supported a higher withdrawal rate and had significantly less start-date sensitivity than a 70/30 AA.

Over that same time frame, I literally cannot find any drawback to a 10% allocation to gold for a long-term investor using any of the standard metrics.
That's what I have concluded also after looking at the data carefully. And that's not even factoring in the doomsday insurance aspect, which is completely separate.
UpperNwGuy
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Re: Holding Gold as "Doomsday Fund"

Post by UpperNwGuy »

Outer Marker wrote: Tue Apr 28, 2020 3:55 pm Having a doomsday fund in gold seems a good use for this money . . .
Gold is pretty useless. But if you want to throw your money away, go for it. Just don't expect us to cheer you on. We're not doing it.
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Re: Holding Gold as "Doomsday Fund"

Post by BH+ »

Outer Marker wrote: Tue Apr 28, 2020 3:55 pm Which has me thinking . . . I'm considering buying $100,000 in physical gold and $10,000 in silver coins. I wouldn't consider it as part of my portfolio, but an insurance policy against "the worst." I know gold as an investment has generally been a stinker. It doesn't do anything productive; it doesn't turn a profit; it just exists. But, gold has been used as currency since at least 700BC, and will almost certainly never be worthless. If I have a stash in a safety deposit box, I can probably get to it before total pandamonium breaks loose. And, if I have such a stash, I'll be comparatively very wealthy to those who don't.
I think it is sound idea. I would prefer gold over silver for this purpose. Many investors would allocate 5-10% of their portfolio or assets to gold if the purpose is insurance against hyperinflation or financial collapse. Some go higher (15-25%) and do rebalancing if they believe in gold as an asset class (such as in the permanent portfolio).
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Re: Holding Gold as "Doomsday Fund"

Post by Patzer »

Irenaeus wrote: Wed Apr 29, 2020 5:08 pm
Patzer wrote: Tue Apr 28, 2020 6:50 pm Right now 5% of my portfolio is in gold as a hedge, but it's in an ETF, not physical. I held physical gold from 2008-2010 and it was expensive to trade in and out of. I also have a few hundred dollars in silver coins, just as a hobby.

I think an idea of a doomsday hedge is okay, but what will you be trading your gold and silver for?
Food, water, medicine, tools, ammo, alcohol, toilet paper (apparently)?
I think investing in having a surplus of those items would be more cost efficient.
After that, how much physical gold and silver do you really need? If the disaster was regional 25K could probably get you out of there and with a little bit of money to start over. If it's global, I am not so sure about trading with gold. It might make you stand out as rich and that probably would not be good in a world that has really gone down the drain. Whereas you could easily trade from a supply of 100 bottles of whiskey, without much notice and far less chance of getting robbed.

I used to play pool in a biker bar, and I quickly learned not to play for money, because some people would get real salty even at $5 bucks a game if they lost a few in a row.
Funny thing was, if I played for 1 beer/game, I could drink for free all week and no one ever complained about losing.

It's perfectly acceptable to "pay" your friends to do $300 in hard labor helping you move, with a 6 pack of beer and a $10 pizza.

While your plan to hold gold sounds very rational, it is probably good to consider that people are not entirely rational on a good day, and would be even less so during a major crisis. Bartering in that world would probably be more likely to instill a sense of goodwill and camaraderie than paying for stuff with gold.

Also, if the crisis is short-term you might make a few friends by having extra supplies around. I happen to have several months supply of paper products and have endeared myself to a few neighbors with free rolls of toilet paper.
In what type of account do you hold your gold ETF? Thank you.
It's in my brokerage. Since it doesn't produce a dividend, interest, etc.
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Re: Holding Gold as "Doomsday Fund"

Post by Patzer »

thermalfama wrote: Tue Apr 28, 2020 10:47 pm
Patzer wrote: Tue Apr 28, 2020 6:50 pm Right now 5% of my portfolio is in gold as a hedge, but it's in an ETF, not physical. I held physical gold from 2008-2010 and it was expensive to trade in and out of.
Unless you want to trade in and out of gold ETFs and have the proceeds immediately available to deploy in day trading non-gold ETFs (which I assume you don't), or unless you want to own only a couple of grand in gold ETFs, I don't know why a gold ETF could ever be superior to something like BullionVault for long term investment in precious metals. With BV you pay 0.12% per year for storage and insurance, while GLD has a TER of 0.40%. With BV you are the direct owner of physical property that you cannot lose to creditors in case the company goes belly up, because it's not theirs to begin with. With gold ETFs you have a mess of counterparty liabilities. Plus, bid-ask spreads for trading in BV are generally minuscule during week days (order board), even now that markets are very volatile, and trading commissions start at 0.5% and fairly quickly drop to 0.1%. Finally, go read their terms and conditions. It's one of those rare companies that actually inspire confidence when you read their fine print. Instead of the fine print being designed to give them the right to screw you over in a million potential ways, it's designed to give you peace of mind at every turn. Then go read a gold ETF's prospectus and see if you notice a different vibe. And no, I don't have any financial interest in BullionVault, just a happy long time customer.
The one thing that can be a pain about BV is their requirement that you keep only one bank account linked to it at any time and that all withdrawals and deposits go to and come from the same bank account.
BullionVault does look cool, thanks for the tip.
Won't be switching to them for my current gold allocation, since I am already up 11% and the taxes outweigh any cost savings, but will consider them for future gold purchases.
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Re: Holding Gold as "Doomsday Fund"

Post by JBTX »

Outer Marker wrote: Wed Apr 29, 2020 5:43 pm
JBTX wrote: Wed Apr 29, 2020 5:32 pm I'm not a big gold fan but I don't deny there could be portfolio diversification benefits. But for those that advocate a large stash of physical gold, I'd like to understand the specifics of the scenario where it is better to hold physical gold. If the working financial markets just stop working, how would you turn physical gold bars or 1 ounce coins into food, water, ammo, etc? One ounce now buys approx 3 months of groceries.

I could theoretically see some utility in small pieces of gold jewelry or silver coins.
1. If you hold physical gold you will always have it. If the banks shut down, it will still be available and "burried in your backyard."

2. Gold has been currency since at least 700 BC. It is never going to be worthless.

3. The post collapse market (if it happens) will sort out what the right price is for gold. It will be worth more than bankrupt gov't issued paper.

4. I want to hold gold coins issued by a reputable government, vs. stamped bars that could be counterfiet. Canadian Golden Maple leafs seem to have the lowest cost per ounce relative to the spot price. I think someone would be willing to trade me a month's groceries for one of those.
To follow up and be more specific, how would you conduct transactions with it? How would you trade it in for food or other necessities? Wouldn't it be like walking into a 7/11 with a $1000 bill? You are assuming that electronic markets have collapsed, but there is still enough law and order and economic structure such that you can as can safely transact with a comparatively high value object. Perhaps but I just don't see it.
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Re: Holding Gold as "Doomsday Fund"

Post by patrick »

willthrill81 wrote: Wed Apr 29, 2020 8:08 pm
stuper1 wrote: Wed Apr 29, 2020 5:47 pm
Outer Marker wrote: Wed Apr 29, 2020 5:25 pm Which would mean:

70% stocks
20% bonds
10% gold
That is likely to be much more resilient than a 70/30 portfolio.
Over the last ~50 years, it would have supported a higher withdrawal rate and had significantly less start-date sensitivity than a 70/30 AA.

Over that same time frame, I literally cannot find any drawback to a 10% allocation to gold for a long-term investor using any of the standard metrics.
The drawbacks are very easy to find if you look back more than 50 years.
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Re: Holding Gold as "Doomsday Fund"

Post by jrbdmb »

Nummerkins wrote: Tue Apr 28, 2020 4:08 pm I would not. If "the worst" were to happen, what exactly does gold do for you? You can't eat it. It doesn't grow anything. Who would want it?
In addition, even if you are able to barter your gold for other necessities, do you really want to be known during a "Doomsday scenario" as that guy who has a lot of gold stashed in his house?
Last edited by jrbdmb on Thu Apr 30, 2020 9:59 am, edited 1 time in total.
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Re: Holding Gold as "Doomsday Fund"

Post by Outer Marker »

JBTX wrote: Thu Apr 30, 2020 7:40 am To follow up and be more specific, how would you conduct transactions with it? How would you trade it in for food or other necessities? Wouldn't it be like walking into a 7/11 with a $1000 bill? You are assuming that electronic markets have collapsed, but there is still enough law and order and economic structure such that you can as can safely transact with a comparatively high value object. Perhaps but I just don't see it.
No, not for everyday transactions. Rather, to preserve a chunk of investable wealth to rebuild in the future. The economy collapsed for a time in post-war Germany; some people lost nearly everything when the Argentine stock market crashed. But, it wasn't anarchy. Those that held gold were a lot better off than those that held worthless paper or stock certificates. As mentioned, it is not inconceivable that the U.S. stock market could go to zero in a pandemic that wiped out a few billion people. But, I think the U.S. Gov't would survive.

I don't think the world will slip into a "mad max" kind of situation, but even if it did, I'd be willing to bet that gold would still be tradable currency. In that scenario, for small things, in addition to barterable goods like ammo, a mix of silver dollars, quarters, dimes could be useful.
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Re: Holding Gold as "Doomsday Fund"

Post by bovineplane »

I don't hold gold as part of our retirement savings but I do have a few ounces in American Eagle coins, both graded and ungraded coins. We also hold a few thousand dollars in Silver Eagles, both graded and ungraded. We accumulated these over the years. The Silver coins I have had accumulated 2004-2006 and bought when coin companies offer those ridiculous offers for free/cheap coins for listening to a hard sales pitch. Other times Ill buy from ebay when a random coupon or discount applies to uncirculated coins. In total all these fit in a shoebox area size. Our kids refer to this as our pirate treasure.

We have a small, very heavy, professional quality safe about 2-3 cu feet bolted to concrete in the house which we keep the coins in addition to a few other things of value. Bought the safe from a shop that refurbishes used and if I recall paid <$200 for it 8 years ago when we moved. Same model new is $1200-1500 depending on the lock mechanism (mechanical vs digital vs fingerprint). It has a digital keypad which allows me to change the combo. The digital pad is removable from the safe preventing opening without tools. I installed it by drilling/bolting to the concrete. It weighs ~300 pounds and quite unruly to move with one person when not bolted down.

All that said - for our $10-15k ish holdings I am comfortable with this set-up at the house. Annualized the storage cost decrease each year and the only maintenance is new batteries (4 AA) annually. I know it can be stolen/broker into for someone with the motivation. If I were to consider 100k of Gold, I would not be as comfortable. How would you plan to keep it "buried in the backyard".
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Re: Holding Gold as "Doomsday Fund"

Post by jabberwockOG »

JBTX wrote: Thu Apr 30, 2020 7:40 am
Outer Marker wrote: Wed Apr 29, 2020 5:43 pm
JBTX wrote: Wed Apr 29, 2020 5:32 pm I'm not a big gold fan but I don't deny there could be portfolio diversification benefits. But for those that advocate a large stash of physical gold, I'd like to understand the specifics of the scenario where it is better to hold physical gold. If the working financial markets just stop working, how would you turn physical gold bars or 1 ounce coins into food, water, ammo, etc? One ounce now buys approx 3 months of groceries.

I could theoretically see some utility in small pieces of gold jewelry or silver coins.
1. If you hold physical gold you will always have it. If the banks shut down, it will still be available and "burried in your backyard."

2. Gold has been currency since at least 700 BC. It is never going to be worthless.

3. The post collapse market (if it happens) will sort out what the right price is for gold. It will be worth more than bankrupt gov't issued paper.

4. I want to hold gold coins issued by a reputable government, vs. stamped bars that could be counterfiet. Canadian Golden Maple leafs seem to have the lowest cost per ounce relative to the spot price. I think someone would be willing to trade me a month's groceries for one of those.
To follow up and be more specific, how would you conduct transactions with it? How would you trade it in for food or other necessities? Wouldn't it be like walking into a 7/11 with a $1000 bill? You are assuming that electronic markets have collapsed, but there is still enough law and order and economic structure such that you can as can safely transact with a comparatively high value object. Perhaps but I just don't see it.
Most certainly correct. In the case of total economic collapse and all that goes along with it, a gold hoarder's first transaction would likely be their last transaction.
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Re: Holding Gold as "Doomsday Fund"

Post by balbrec2 »

Nummerkins wrote: Tue Apr 28, 2020 4:08 pm I would not. If "the worst" were to happen, what exactly does gold do for you? You can't eat it. It doesn't grow anything. Who would want it?
doomsday as far as preserving your portfolio (good luck)or doomsday as in having something of value
for survival spending? I don't think anything will suffice in the former except maybe some inflation protected
gov't securities. For a survival fund you can actually have personal
possession of, I would prefer a stash of silver coins and cash. You can never know what lies on the
other side of doomsday if anything. usable items in quantity are helpful.
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Re: Holding Gold as "Doomsday Fund"

Post by Outer Marker »

patrick wrote: Thu Apr 30, 2020 9:36 am The drawbacks are very easy to find if you look back more than 50 years.
There have been some wild swings, to be sure, but over 100 years the trend line is definately up. https://www.macrotrends.net/1441/gold-to-silver-ratio Further, gold tends to zig when stocks zag, so there are some compelling rebalancing opportunities. I have long rejected gold as a credible asset class, but the more I dig into it, the more merit I see. If I do pull the trigger on this, I think I would commit to not rebalancing into gold from stocks and bonds if gold prices tanked, but only to add to it with "new money", and use it to buy stocks when they go down and gold spikes up.
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Re: Holding Gold as "Doomsday Fund"

Post by smitcat »

jabberwockOG wrote: Thu Apr 30, 2020 10:04 am
JBTX wrote: Thu Apr 30, 2020 7:40 am
Outer Marker wrote: Wed Apr 29, 2020 5:43 pm
JBTX wrote: Wed Apr 29, 2020 5:32 pm I'm not a big gold fan but I don't deny there could be portfolio diversification benefits. But for those that advocate a large stash of physical gold, I'd like to understand the specifics of the scenario where it is better to hold physical gold. If the working financial markets just stop working, how would you turn physical gold bars or 1 ounce coins into food, water, ammo, etc? One ounce now buys approx 3 months of groceries.

I could theoretically see some utility in small pieces of gold jewelry or silver coins.
1. If you hold physical gold you will always have it. If the banks shut down, it will still be available and "burried in your backyard."

2. Gold has been currency since at least 700 BC. It is never going to be worthless.

3. The post collapse market (if it happens) will sort out what the right price is for gold. It will be worth more than bankrupt gov't issued paper.

4. I want to hold gold coins issued by a reputable government, vs. stamped bars that could be counterfiet. Canadian Golden Maple leafs seem to have the lowest cost per ounce relative to the spot price. I think someone would be willing to trade me a month's groceries for one of those.
To follow up and be more specific, how would you conduct transactions with it? How would you trade it in for food or other necessities? Wouldn't it be like walking into a 7/11 with a $1000 bill? You are assuming that electronic markets have collapsed, but there is still enough law and order and economic structure such that you can as can safely transact with a comparatively high value object. Perhaps but I just don't see it.
Most certainly correct. In the case of total economic collapse and all that goes along with it, a gold hoarder's first transaction would likely be their last transaction.
"Most certainly correct. In the case of total economic collapse and all that goes along with it, a gold hoarder's first transaction would likely be their last transaction."

I do not expect or plan for 'total economic collapse' but if that happened any transaction for any item deemed valuable will have similar consequences - likely those items viewed with immediate value (food, shelter, etc) would generate the most severe reactions.
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Re: Holding Gold as "Doomsday Fund"

Post by willthrill81 »

patrick wrote: Thu Apr 30, 2020 9:36 am
willthrill81 wrote: Wed Apr 29, 2020 8:08 pm
stuper1 wrote: Wed Apr 29, 2020 5:47 pm
Outer Marker wrote: Wed Apr 29, 2020 5:25 pm Which would mean:

70% stocks
20% bonds
10% gold
That is likely to be much more resilient than a 70/30 portfolio.
Over the last ~50 years, it would have supported a higher withdrawal rate and had significantly less start-date sensitivity than a 70/30 AA.

Over that same time frame, I literally cannot find any drawback to a 10% allocation to gold for a long-term investor using any of the standard metrics.
The drawbacks are very easy to find if you look back more than 50 years.
It was completely different when gold was tied to the dollar. Consequently, I couldn't care less what gold's performance was from an investment standpoint back then.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
stuper1
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Re: Holding Gold as "Doomsday Fund"

Post by stuper1 »

I think someone above asked about good gold ETFs. Here are a few with reasonable expense ratios: IAU, GLDM, SGOL, AAAU, BAR.
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Re: Holding Gold as "Doomsday Fund"

Post by jabberwockOG »

smitcat wrote: Thu Apr 30, 2020 10:09 am
jabberwockOG wrote: Thu Apr 30, 2020 10:04 am
JBTX wrote: Thu Apr 30, 2020 7:40 am
Outer Marker wrote: Wed Apr 29, 2020 5:43 pm
JBTX wrote: Wed Apr 29, 2020 5:32 pm I'm not a big gold fan but I don't deny there could be portfolio diversification benefits. But for those that advocate a large stash of physical gold, I'd like to understand the specifics of the scenario where it is better to hold physical gold. If the working financial markets just stop working, how would you turn physical gold bars or 1 ounce coins into food, water, ammo, etc? One ounce now buys approx 3 months of groceries.

I could theoretically see some utility in small pieces of gold jewelry or silver coins.
1. If you hold physical gold you will always have it. If the banks shut down, it will still be available and "burried in your backyard."

2. Gold has been currency since at least 700 BC. It is never going to be worthless.

3. The post collapse market (if it happens) will sort out what the right price is for gold. It will be worth more than bankrupt gov't issued paper.

4. I want to hold gold coins issued by a reputable government, vs. stamped bars that could be counterfiet. Canadian Golden Maple leafs seem to have the lowest cost per ounce relative to the spot price. I think someone would be willing to trade me a month's groceries for one of those.
To follow up and be more specific, how would you conduct transactions with it? How would you trade it in for food or other necessities? Wouldn't it be like walking into a 7/11 with a $1000 bill? You are assuming that electronic markets have collapsed, but there is still enough law and order and economic structure such that you can as can safely transact with a comparatively high value object. Perhaps but I just don't see it.
Most certainly correct. In the case of total economic collapse and all that goes along with it, a gold hoarder's first transaction would likely be their last transaction.
"Most certainly correct. In the case of total economic collapse and all that goes along with it, a gold hoarder's first transaction would likely be their last transaction."

I do not expect or plan for 'total economic collapse' but if that happened any transaction for any item deemed valuable will have similar consequences - likely those items viewed with immediate value (food, shelter, etc) would generate the most severe reactions.

I prefer to have a few firearms in my safe along with an adequate supply of ammo rather than gold for any kind of apocalyptic scenario. Gold might be a useful hedge against high inflation or a run on US currency but given world conditions I personally don't see that coming anytime soon.
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