Anyone hold precious metal
Anyone hold precious metal
Does anyone hold precious metal in their portfolio? If so, do they stick with silver or gold and in physical or paper certificate?
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- topper1296
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Re: Anyone hold precious metal
I bought some silver coins over 20 years ago. I still hold them, but have no desire to buy any more precious metals. I prefer to hold assets that will pay me earnings, dividends and/or interest payments.
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Re: Anyone hold precious metal
I don't hold any. I've considered buying some physical precious metals as currency in apocalypse-type scenarios. But I think for that I'd be better off buying ammo, cigarettes, and whiskey instead.
I've never seen any evidence that precious metals enhance a portfolio. Perhaps someone can direct me to some if such a thing exists.
I've never seen any evidence that precious metals enhance a portfolio. Perhaps someone can direct me to some if such a thing exists.
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Re: Anyone hold precious metal
I hold 5% of my portfolio in gold and silver. I try to keep it at 3% gold 2% silver, but I don't fret too much about the specific %of each.
I hold these in coins. I'm not averse to the etfs, but I like coins. Even if I didn't allocate them to my portfolio, I'd buy them anyways. So the math provides a rough guide on how much to buy every year. I've sold them in the past when God rocketed, to use for other investments, but going forward I'll likely just buy and hold forever.
I hold these in coins. I'm not averse to the etfs, but I like coins. Even if I didn't allocate them to my portfolio, I'd buy them anyways. So the math provides a rough guide on how much to buy every year. I've sold them in the past when God rocketed, to use for other investments, but going forward I'll likely just buy and hold forever.
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Re: Anyone hold precious metal
Its all about how you analyze data if you want to believe something or not. There is one side that believes if you don't want to believe something no matter how much data there is you will always want more. Then there is the side of if you choke/ strangulate the data enough it will tell you whatever you want it to. Don't know what side you are on, but here are some of the arguments for gold in a diversified portfolio:BabylonOrBust wrote:I've never seen any evidence that precious metals enhance a portfolio. Perhaps someone can direct me to some if such a thing exists.
Stock market returns do poorly in negative real return periods and gold does well during those periods. That is why, I think, stocks did poor and gold did well in the late 70's and also in the 2000's. The first period was due to HIGH inflation which led to Volker chasing to compensate with high interest rates leading to negative real rates, i.e. CPI of 14 and interest rates of 10 and the latter period where there was such a lull in economy which FED tried improving by keeping interest rates artificially low despite higher CPI thus leading to negative rates, i.e. CPI of 2 and interest rates of 1. Of course, there is also a belief that gold does well when there is SERIOUSLY high inflation, i.e. CPI over 5-6. That, of course, is hard to come up with a meaningful conclusion as this has happened only once in American history (late 70's)
Then there is an argument if you are a believer in MPT theory and diversification benefit. As Mr. Booth published many years in an excellent paper some time ago diversification benefit is strongest when you have two asset classes with HIGH volatility and LOW correlation. Stock and gold are both volatile (no argument there) and correlation are basically NOT correlated. The article published by Erb and Harvey (never understood why they always seem to publish together), had a paper which in they noted SP500 and gold monthly prices from 1975 (intentionally ignoring the initial effect of being off the gold standard permanently) and it showed when stocks went up 50% of the time gold went up and the other 50% it went down and when stocks went down gold went up 50% and went down the other 50%. I would say that is about as uncorrelated as one can get.
Another use of gold is as a currency hedge against the U.S. dollar. What many folks who even read about the PP of Harry Browne fail to realize is one of the reasons he has NO foreign equities is that he uses gold as his hedge against the falling dollar instead of foreign currency through foreign equity. So gold can and has been used as a hedge against the falling dollar.
As a believer or not of gold one must find some intellectual appreciation of its effects now and only more in the future as it becomes even MORE liquid to trade and federal governments have shown an increasing willingness to manipulate monetary policy as ALL currencies are fiat at this point. This was no more evident then the monetary policy in this last great recession.
Good luck.
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Re: Anyone hold precious metal
I have a some silver, zero gold. I do think silver is better to buy right now then gold because the ratio is like 75-1 right now. Its not part of my AA and not sure when if ever I will get rid of it. I think its a good thing to have around just in case.
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Re: Anyone hold precious metal
Gold and silver bullion coins. More of a hobby, for me. It constitutes 1-2% of my investment assets.Prague wrote:Does anyone hold precious metal in their portfolio? If so, do they stick with silver or gold and in physical or paper certificate?
I like to think of it as a currency/inflation hedge.
Re: Anyone hold precious metal
Nope.
"The two most important days in someone's life are the day that they are born and the day they discover why." -John Maxwell
Re: Anyone hold precious metal
I have about 70 oz. of mostly silver bullion rounds.
Also my U.S. coin collection of Mercury dimes, Franklin and walking Liberty halves, Morgan + Peace dollars.
When silver and gold were at record levels a few years back i sold some silver coins that tripled my 'investment' back.
Also my U.S. coin collection of Mercury dimes, Franklin and walking Liberty halves, Morgan + Peace dollars.
When silver and gold were at record levels a few years back i sold some silver coins that tripled my 'investment' back.
Re: Anyone hold precious metal
Absolutely none. Simplicity is one of the four key tenets of my IPS.
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Re: Anyone hold precious metal
I have some precious metal on my ring finger. I expect to have that in my portfolio until the day I die.
I get the FI part but not the RE part of FIRE.
Re: Anyone hold precious metal
Just in case of what?dirtytough wrote:I think its a good thing to have around just in case.
Re: Anyone hold precious metal
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman
Re: Anyone hold precious metal
Nope, none now.
A few years ago, I did find a Krugerrand in a sock drawer and I sold it. It was among miscellaneous stuff (slide rules, etc.) left me by my father. I look like an investing genius, since I sold near the peak.
I'd be cautious about gold. It's relevance in the economic system has been declining for 40 years. What's left is the speculation.
L.
A few years ago, I did find a Krugerrand in a sock drawer and I sold it. It was among miscellaneous stuff (slide rules, etc.) left me by my father. I look like an investing genius, since I sold near the peak.
I'd be cautious about gold. It's relevance in the economic system has been declining for 40 years. What's left is the speculation.
L.
Last edited by Leeraar on Sat Mar 07, 2015 6:41 pm, edited 1 time in total.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")
Re: Anyone hold precious metal
If you want to go the precious metals route, I think you should read more about it and formulate some convictions about what you think gold (or precious metals) do, how they function in the global economy, and how you intend to access this asset class.
Ben Bernanke has said many times that gold is a relic. Meanwhile, Alan Greenspan has recently suggested that gold is becoming increasingly essential given the Fed's (and the world's central banks') monetary policies.
Ben Bernanke has said many times that gold is a relic. Meanwhile, Alan Greenspan has recently suggested that gold is becoming increasingly essential given the Fed's (and the world's central banks') monetary policies.
Re: Anyone hold precious metal
I have 5% of my portfolio in gold - mostly Eagles and Maple Leafs but also some others for variety - when the market is down I buy from a quality online dealer to rebalance; when the market is up I take some coins out of my portfolio and put aside for the kids.
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Re: Anyone hold precious metal
Not a precious metal, but invested in potash. Its been nothing but a drag on total value of portfolio.
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Re: Anyone hold precious metal
Lead and Brass...
Re: Anyone hold precious metal
How does one know when the market is down? When silver was at 30 people were saying it as down because the previous high was 50....209south wrote:I have 5% of my portfolio in gold - mostly Eagles and Maple Leafs but also some others for variety - when the market is down I buy from a quality online dealer to rebalance; when the market is up I take some coins out of my portfolio and put aside for the kids.
Re: Anyone hold precious metal
Yes, but it amounts to less than 1% of my investment portfolio. I'm actually intellectually opposed to the usual investor sinking much into gold or silver.
On the flip side, It's pretty, it's tangible, relatively portable and easy to change into cash if needed.
Currently I'm using Franklin halves to teach my son to count. He loves putting them in a piggy bank.
On the flip side, It's pretty, it's tangible, relatively portable and easy to change into cash if needed.
Currently I'm using Franklin halves to teach my son to count. He loves putting them in a piggy bank.
Re: Anyone hold precious metal
John3754 by 'down' I merely mean 10% off my target allocation...i.e. if bullion is <4.5% of my portfolio I buy back enough to get to 5.0%...when bullion >5.5% I remove enough to get back to 5.0%...needless to say I've had several rebalancing opportunities over the past few years.
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Re: Anyone hold precious metal
I have struggled with this question for a long time (of whether I should) and still own none. The thing that has kept me from buying is the poor long-term return (especially risk-adjusted) and associated opportunity cost - in addition to high collectibles tax rate.
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Re: Anyone hold precious metal
How does this principle work for an EU investor who buys an unhedged euro currency gold ETF and only has EU equities? Is in this case the hedging 'system' for the euro currency broken since gold is in USD? Or am I getting things all mixed up?staythecourse wrote: Another use of gold is as a currency hedge against the U.S. dollar. What many folks who even read about the PP of Harry Browne fail to realize is one of the reasons he has NO foreign equities is that he uses gold as his hedge against the falling dollar instead of foreign currency through foreign equity. So gold can and has been used as a hedge against the falling dollar.
Re: Anyone hold precious metal
Long ago in the Reagan days, I had a big fat silver bar for which I paid $800.
Watched it go up in value to $8000 (thank you, Bunky Hunt!). Then watched it go back down (inside of a week) to $800. Finally sold it for $900.
You like big, scary roller coasters, it's a good way to go. Otherwise, not.
Watched it go up in value to $8000 (thank you, Bunky Hunt!). Then watched it go back down (inside of a week) to $800. Finally sold it for $900.
You like big, scary roller coasters, it's a good way to go. Otherwise, not.
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Re: Anyone hold precious metal
Never held gold in any portfolio, but I hold some in my mouth. My dentist is my broker.
Dave
Dave
Investing in Mutual Funds, ETF's, Forever Stamps and Bittulips.
Re: Anyone hold precious metal
Gold is gold. USD/per ounce gold is just one relative measure of its value, albeit the most commonly quoted one. EUR/ounce gold is another relative measure of gold's value. Likewise USD/EUR is the most common relative value measure of the EUR, but YEN/EUR is another common one. Gold isn't 'in' USD any more than EUR is 'in' USD.MountainTop wrote:How does this principle work for an EU investor who buys an unhedged euro currency gold ETF and only has EU equities? Is in this case the hedging 'system' for the euro currency broken since gold is in USD? Or am I getting things all mixed up?staythecourse wrote: Another use of gold is as a currency hedge against the U.S. dollar. What many folks who even read about the PP of Harry Browne fail to realize is one of the reasons he has NO foreign equities is that he uses gold as his hedge against the falling dollar instead of foreign currency through foreign equity. So gold can and has been used as a hedge against the falling dollar.
Gold is probably a more direct hedge against a drop in a particular currency's value (v most other currencies, or trade weighted basket of currencies, or single major currency, USD, EUR) than equities with different currencies as unit of account. The currency used as unit of account of a particular stock has no informational value in itself in determining how the value of the stock will vary when expressed in terms of another currency. It all depends on how the value of the company's assets and liabilities react to changing currency values and that varies widely by company and also over time for a given company or even a given national stock market. Simply holding foreign currencies is by far the most direct way to hedge against a fall in the value of one particular currency v those foreign currencies. Foreign bonds (without currency hedges) closely approximate that.
Re: Anyone hold precious metal
I think of precious metals as an insurance policy against severe government/currency disruptions. I keep 1 month EF in silver. I realize it is a little ridiculous, but in a hyperinflation scenario (probably unlikely), I will be glad I have it.BabylonOrBust wrote:I don't hold any. I've considered buying some physical precious metals as currency in apocalypse-type scenarios. But I think for that I'd be better off buying ammo, cigarettes, and whiskey instead.
I've never seen any evidence that precious metals enhance a portfolio. Perhaps someone can direct me to some if such a thing exists.
And I agree that for an apocalypse scenario ammo, cigarettes, and whiskey are more useful than gold, but you forgot canned food
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Re: Anyone hold precious metal
Nope.
None.
None.
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Re: Anyone hold precious metal
William Bernstein has written a fair amount on the subject. Here are links to some (rather) old posts of his on the subject matter:BabylonOrBust wrote: I've never seen any evidence that precious metals enhance a portfolio. Perhaps someone can direct me to some if such a thing exists.
http://www.efficientfrontier.com/ef/197/preci197.htm
http://www.efficientfrontier.com/ef/adhoc/gold.htm
I'm not saying it is for everyone or that it is necessary, but it may have a place in a portfolio if you want the type of diversification gold and precious metals have to offer.
Re: Anyone hold precious metal
Check out "permanent portfolio".Hunky-dory wrote:William Bernstein has written a fair amount on the subject. Here are links to some (rather) old posts of his on the subject matter:BabylonOrBust wrote: I've never seen any evidence that precious metals enhance a portfolio. Perhaps someone can direct me to some if such a thing exists.
http://www.efficientfrontier.com/ef/197/preci197.htm
http://www.efficientfrontier.com/ef/adhoc/gold.htm
I'm not saying it is for everyone or that it is necessary, but it may have a place in a portfolio if you want the type of diversification gold and precious metals have to offer.
L.
You can get what you want, or you can just get old. (Billy Joel, "Vienna")
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Re: Anyone hold precious metal
Great question and maybe a little confused on the question. Gold even though is priced (like all commodities sold) in USD it is its own currency. I would venture to guess (just that as I have not looked at it closely) gold would work just fine in this situation as well. EVERY country in the world has large banks storing gold so they must agree as well as a currency held.MountainTop wrote:How does this principle work for an EU investor who buys an unhedged euro currency gold ETF and only has EU equities? Is in this case the hedging 'system' for the euro currency broken since gold is in USD? Or am I getting things all mixed up?staythecourse wrote: Another use of gold is as a currency hedge against the U.S. dollar. What many folks who even read about the PP of Harry Browne fail to realize is one of the reasons he has NO foreign equities is that he uses gold as his hedge against the falling dollar instead of foreign currency through foreign equity. So gold can and has been used as a hedge against the falling dollar.
The best way to find out is go to one of the sites where you can plug in your currency (euros) and gold as far back as you can go (should not be difficult as the euro is not that old) and see what the correlation coefficient is.
Good luck.
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Re: Anyone hold precious metal
Crimsontide wrote:Lead and Brass...
Me too.
Been thinking about selling some M855 though since it at record highs right now.
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Re: Anyone hold precious metal
You forgot medical supplies. As long as they have decent shelf lives. They are precisely the sorts of things that get hard to get when distribution and finance systems start to fall apart. Eg Soviet Union at the end.mjb wrote:I think of precious metals as an insurance policy against severe government/currency disruptions. I keep 1 month EF in silver. I realize it is a little ridiculous, but in a hyperinflation scenario (probably unlikely), I will be glad I have it.BabylonOrBust wrote:I don't hold any. I've considered buying some physical precious metals as currency in apocalypse-type scenarios. But I think for that I'd be better off buying ammo, cigarettes, and whiskey instead.
I've never seen any evidence that precious metals enhance a portfolio. Perhaps someone can direct me to some if such a thing exists.
And I agree that for an apocalypse scenario ammo, cigarettes, and whiskey are more useful than gold, but you forgot canned food
Ability to collect and can preservatives etc. That, too, was key in the end of the USSR-- that's how people in the Baltic republics survived.
Things like razor blades and batteries which are essential, small, portable, valuable.
Cigarettes have functioned as an alternative currency (they do in prisons for example). But maybe coffee as well?
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Re: Anyone hold precious metal
It's the old problem you are buying an asset with a zero or negative return (negative if you hold the physical stuff, after storage costs) but periodically the world will hit the fan and it will be useful.Hunky-dory wrote:William Bernstein has written a fair amount on the subject. Here are links to some (rather) old posts of his on the subject matter:BabylonOrBust wrote: I've never seen any evidence that precious metals enhance a portfolio. Perhaps someone can direct me to some if such a thing exists.
http://www.efficientfrontier.com/ef/197/preci197.htm
http://www.efficientfrontier.com/ef/adhoc/gold.htm
I'm not saying it is for everyone or that it is necessary, but it may have a place in a portfolio if you want the type of diversification gold and precious metals have to offer.
Around here it's got a stink, because we get lots of threads about owning gold *after* the price has gone up-- trend following. There are some very patient investors here who hold gold and PM and Bernstein says you have to be patient.
Transactions costs are another significant issue.
Silver at least you can carve it up into spendable sizes. With a Maple Leaf or a Krugerrand you are going to have to cash that in, and in a hyperinflationary economy you then have to spend it almost before you get it.
PM Equities are perhaps a better route, but you lose a lot of the diversification value. When gold was going up, the PME were not, and looking at Barrick's actual results and problems, perhaps this is not surprising.
Re: Anyone hold precious metal
Wait till actual ban to unload. In the mean time, pre-replace them with Wolf or Tula, where have similar precious metal in the tip.Crow Hunter wrote:Crimsontide wrote:Lead and Brass...
Me too.
Been thinking about selling some M855 though since it at record highs right now.
Re: Anyone hold precious metal
Yes, my wife's jewelry and a very small coin collection that is cool to look at. I don't invest in precious metals at all though.
Max out your tax sheltered retirement accounts with inexpensive, well diversified, index funds and you will beat 90% of all investors.
Re: Anyone hold precious metal
Thank you all for your opinions and sound advice. After careful consideration, I loaded up on Tula and Wolf in .308 and .45 ACP. in addition, I also stocked up on discontinued ZQI, which is cheaper than Tula here. Money is tight around here these days ever since we are in the 25% tax bracket. It just seem like we loose more money in taxes than any increase in income from longer hours.
Re: Anyone hold precious metal
As South Florida resident who has been through a more than enough hurricanes agree that water, canned foods and whisky (not necessarily in that order) are on my list. But that is a survival list, not an investment list.mjb wrote:BabylonOrBust wrote:
And I agree that for an apocalypse scenario ammo, cigarettes, and whiskey are more useful than gold, but you forgot canned food
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Re: Anyone hold precious metal
I've always wanted a Canada maple leaf, but it's just more money than I want to spend, so thought about silver, but I'd want to handle the coins and that drops the value of a nice coin. Copper is far cheaper but the price of wheat cents has been constant since the 80s. I decided that security is of paramount importance to me, so wanted something even more difficult than wheat cents to steal, so I got in on coal. It's out of favor now but China is buying like crazy still and like land, there's only so much. I bought 4 train cars full and worked out a special deal where I only have to store half of it in my yard.
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Re: Anyone hold precious metal
I've been waiting a while for the gold crash to occur so that I can get in on the game. I have an arbitrary target of $1000 an oz. Probably many people are like me, and that is why the price continues to not fall. Every time it goes down, it gets bought back up again.
I like the idea that I could hold four rolls of 1 oz. gold coins in my hand that would be worth about two hundred thousand dollars. Makes me think of "passing down the family jewels".
I like the idea that I could hold four rolls of 1 oz. gold coins in my hand that would be worth about two hundred thousand dollars. Makes me think of "passing down the family jewels".
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Re: Anyone hold precious metal
Many years ago and sold out. No interest outside of total market index funds.
John C. Bogle: “Simplicity is the master key to financial success."
Re: Anyone hold precious metal
Can you give further explanation as I am very curious about coal investment? I have wood lands that is worth close to $600k in lumber rights but I am waiting for another cycle of housing build boom, which is probably at least 20 years away when folks of my generation retire and demand new housing that we saved 30-50 years for, to sale. Briefly looking at coal stocks, it seems like they have been through several blood baths. As coal and energy sources are always needed, this may be interesting.Jack FFR1846 wrote:I've always wanted a Canada maple leaf, but it's just more money than I want to spend, so thought about silver, but I'd want to handle the coins and that drops the value of a nice coin. Copper is far cheaper but the price of wheat cents has been constant since the 80s. I decided that security is of paramount importance to me, so wanted something even more difficult than wheat cents to steal, so I got in on coal. It's out of favor now but China is buying like crazy still and like land, there's only so much. I bought 4 train cars full and worked out a special deal where I only have to store half of it in my yard.
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Re: Anyone hold precious metal
James River Coal - JRCC I believe - was one of the worst stocks we ever owned.Prague wrote:Can you give further explanation as I am very curious about coal investment? I have wood lands that is worth close to $600k in lumber rights but I am waiting for another cycle of housing build boom, which is probably at least 20 years away when folks of my generation retire and demand new housing that we saved 30-50 years for, to sale. Briefly looking at coal stocks, it seems like they have been through several blood baths. As coal and energy sources are always needed, this may be interesting.Jack FFR1846 wrote:I've always wanted a Canada maple leaf, but it's just more money than I want to spend, so thought about silver, but I'd want to handle the coins and that drops the value of a nice coin. Copper is far cheaper but the price of wheat cents has been constant since the 80s. I decided that security is of paramount importance to me, so wanted something even more difficult than wheat cents to steal, so I got in on coal. It's out of favor now but China is buying like crazy still and like land, there's only so much. I bought 4 train cars full and worked out a special deal where I only have to store half of it in my yard.
John C. Bogle: “Simplicity is the master key to financial success."