Bogle "5% Gold"

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JuniorRob
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Bogle "5% Gold"

Post by JuniorRob » Thu Jan 17, 2019 2:36 pm

I'm sure many have missed this in the one thread. Yes he's talking about an endowment, but I still think it clearly demonstrates that Bogle saw value in gold.

https://youtu.be/3uJbHREmUs4

57 minute mark

Strange that I just saw this the day after his death.

GRP
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Re: Bogle "5% Gold"

Post by GRP » Thu Jan 17, 2019 3:19 pm

This was mentioned briefly in another thread.

My take is this: if it's good enough for Bogle, then it's good enough for me. I hold some gold.

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willthrill81
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Re: Bogle "5% Gold"

Post by willthrill81 » Thu Jan 17, 2019 3:48 pm

Jack said that the 5% allocation to gold would be "a hedge against some kind of catastrophe." 5% seems low for the purposes of doing much good, but OTOH, it's unlikely to do much harm if the catastrophe never manifests itself either. This makes me feel a little better about our physical gold holdings.
“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: Bogle "5% Gold"

Post by azanon » Thu Jan 17, 2019 3:57 pm

willthrill81 wrote:
Thu Jan 17, 2019 3:48 pm
Jack said that the 5% allocation to gold would be "a hedge against some kind of catastrophe." 5% seems low for the purposes of doing much good, but OTOH, it's unlikely to do much harm if the catastrophe never manifests itself either. This makes me feel a little better about our physical gold holdings.
At least in the past, it has been quite a bit better than just for that purpose. I use an ETF over physical gold, because there's no (easy) way I know of to rebalance with physical gold, to say nothing of the hassle of buying and storing it. Commodities can provide a nice return boost to a portfolio along with just diversification, but quite a bit of that return actually happens via the rebalancing.

I figure I'm just as likely to get ripped off somehow by holding IAU rather than physical gold, as I am by somehow messing up trying to hold physical gold (e.g. someone steals it from me).

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Re: Bogle "5% Gold"

Post by willthrill81 » Thu Jan 17, 2019 4:00 pm

azanon wrote:
Thu Jan 17, 2019 3:57 pm
willthrill81 wrote:
Thu Jan 17, 2019 3:48 pm
Jack said that the 5% allocation to gold would be "a hedge against some kind of catastrophe." 5% seems low for the purposes of doing much good, but OTOH, it's unlikely to do much harm if the catastrophe never manifests itself either. This makes me feel a little better about our physical gold holdings.
At least in the past, it has been quite a bit better than just for that purpose. I use an ETF over physical gold, because there's no (easy) way I know of to rebalance with physical gold, to say nothing of the hassle of buying and storing it. Commodities can provide a nice return boost to a portfolio along with just diversification, but quite a bit of that return actually happens via the rebalancing.
The physical gold we hold is just for 'insurance against the unknown'*, as David Stein puts it, not as an investment with a positive expected return. I fully anticipate that the real return will be negative in the long-term, but I'm okay with that in such a small portion of our overall net worth (around 2% currently). We'll probably start bumping that up once we become debt-free in a little over a year.

*Ask a Venezuelan if it is worthwhile to have a little gold.
“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: Bogle "5% Gold"

Post by azanon » Thu Jan 17, 2019 4:01 pm

willthrill81 wrote:
Thu Jan 17, 2019 4:00 pm
azanon wrote:
Thu Jan 17, 2019 3:57 pm
willthrill81 wrote:
Thu Jan 17, 2019 3:48 pm
Jack said that the 5% allocation to gold would be "a hedge against some kind of catastrophe." 5% seems low for the purposes of doing much good, but OTOH, it's unlikely to do much harm if the catastrophe never manifests itself either. This makes me feel a little better about our physical gold holdings.
At least in the past, it has been quite a bit better than just for that purpose. I use an ETF over physical gold, because there's no (easy) way I know of to rebalance with physical gold, to say nothing of the hassle of buying and storing it. Commodities can provide a nice return boost to a portfolio along with just diversification, but quite a bit of that return actually happens via the rebalancing.
The physical gold we hold is just for 'insurance against the unknown'*, as David Stein puts it, not as an investment with a positive expected return. I fully anticipate that the real return will be negative in the long-term, but I'm okay with that in such a small portion of our overall net worth (around 2% currently). We'll probably start bumping that up once we become debt-free in a little over a year.

*Ask a Venezuelan if it is worthwhile to have a little gold.
I'm no gold expert, but I thought the rough approximation for gold's return is 0% real.

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willthrill81
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Re: Bogle "5% Gold"

Post by willthrill81 » Thu Jan 17, 2019 4:05 pm

azanon wrote:
Thu Jan 17, 2019 4:01 pm
willthrill81 wrote:
Thu Jan 17, 2019 4:00 pm
azanon wrote:
Thu Jan 17, 2019 3:57 pm
willthrill81 wrote:
Thu Jan 17, 2019 3:48 pm
Jack said that the 5% allocation to gold would be "a hedge against some kind of catastrophe." 5% seems low for the purposes of doing much good, but OTOH, it's unlikely to do much harm if the catastrophe never manifests itself either. This makes me feel a little better about our physical gold holdings.
At least in the past, it has been quite a bit better than just for that purpose. I use an ETF over physical gold, because there's no (easy) way I know of to rebalance with physical gold, to say nothing of the hassle of buying and storing it. Commodities can provide a nice return boost to a portfolio along with just diversification, but quite a bit of that return actually happens via the rebalancing.
The physical gold we hold is just for 'insurance against the unknown'*, as David Stein puts it, not as an investment with a positive expected return. I fully anticipate that the real return will be negative in the long-term, but I'm okay with that in such a small portion of our overall net worth (around 2% currently). We'll probably start bumping that up once we become debt-free in a little over a year.

*Ask a Venezuelan if it is worthwhile to have a little gold.
I'm no gold expert, but I thought the rough approximation for gold's return is 0% real.
Theoretically, yes, but practically the results can vary, as is often the case. Since 1980 (returns from 1972-1980 seem unlikely to occur again in 'normal' times for various reasons), the real return of gold as an asset class, apart from transaction costs, has been -.84% annualized.
“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: Bogle "5% Gold"

Post by JoMoney » Thu Jan 17, 2019 4:09 pm

azanon wrote:
Thu Jan 17, 2019 4:01 pm
...
I'm no gold expert, but I thought the rough approximation for gold's return is 0% real.
Less than when you look at the transaction expenses to buy/sell/hold and potential sales taxes and capital gains taxes on the nominal dollar value.

On the other hand, if you get some psychological benefit from owning jewelry, coin collection, decorative objects, or conceptually viewing it as a form of "insurance" against something, then maybe there is a form of psychological imputed "dividends".
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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Re: Bogle "5% Gold"

Post by azanon » Thu Jan 17, 2019 4:20 pm

Oh yeah right, I didn't mentally adjust for physical gold = definitely not tax sheltered. My portfolio (IAU included) is all tax sheltered, and transactions are even free now too (thanks Vanguard) not counting (extremely small) spreads (typically one cent on bid vs. ask of IAU).

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Re: Bogle "5% Gold"

Post by willthrill81 » Thu Jan 17, 2019 4:21 pm

JoMoney wrote:
Thu Jan 17, 2019 4:09 pm
On the other hand, if you get some psychological benefit from owning jewelry, coin collection, decorative objects, or conceptually viewing it as a form of "insurance" against something, then maybe there is a form of psychological imputed "dividends".
I don't have homeowner's insurance because the expected value is positive because it isn't. I own it as a hedge against damage to our property. I hold a little gold for the same reason.
“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: Bogle "5% Gold"

Post by willthrill81 » Thu Jan 17, 2019 4:23 pm

azanon wrote:
Thu Jan 17, 2019 4:20 pm
Oh yeah right, I didn't mentally adjust for physical gold = definitely not tax sheltered.
Actually, you can own gold and silver coins minted by the Treasury in an IRA. The Taxpayer Relief Act of 1997 made this possible: "Your IRA can invest in one, one-half, one-quarter, or one-tenth ounce U.S. gold coins, or one-ounce silver coins minted by the Treasury Department."
“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: Bogle "5% Gold"

Post by Cycle » Thu Jan 17, 2019 5:02 pm

If you ever need gold due to a catastrophe, that gold better be at home.

The workers at the bank will loot the safety deposit boxes. Gold held by a fund will not be worth anything as you'll have no way to get to the fund holding location to make a withdrawal, and it will likely have been seized by the government in whatever country it is located.

It's not worth holding gold/silver at home as there's too much risk it will be stolen or lost in a disaster.

1oz Gold coins are too large of a denomination to do anything with, better off holding silver for a doomsday scenario. Imagine trying to buy some rice with a 1oz gold coin worth 150k in today's dollars.

I think the more practical thing for doomsdayers is to just own a couple rental properties outright and to own parts of companies in many countries thru index funds.

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Re: Bogle "5% Gold"

Post by willthrill81 » Thu Jan 17, 2019 5:12 pm

Cycle wrote:
Thu Jan 17, 2019 5:02 pm
It's not worth holding gold/silver at home as there's too much risk it will be stolen or lost in a disaster.
There are some very secure means of storing gold at a home or business. Floor safes are one of them. Without a cutting torch and/or a jackhammer and time, the contents will not be stolen except by a professional safe cracker, and they aren't coming to anything resembling a typical residential home. And unless a tornado or flood rips up a concrete foundation, natural disasters aren't an issue either.
Cycle wrote:
Thu Jan 17, 2019 5:02 pm
1oz Gold coins are too large of a denomination to do anything with, better off holding silver for a doomsday scenario. Imagine trying to buy some rice with a 1oz gold coin worth 150k in today's dollars.
There are many other ways to buy gold than one ounce coins. The Treasury mints 1/10th oz. gold coins, but you can also buy gold bars in quantities as small as 1 gram.
Last edited by willthrill81 on Thu Jan 17, 2019 5:16 pm, edited 2 times in total.
“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: Bogle "5% Gold"

Post by JoMoney » Thu Jan 17, 2019 5:13 pm

willthrill81 wrote:
Thu Jan 17, 2019 4:23 pm
azanon wrote:
Thu Jan 17, 2019 4:20 pm
Oh yeah right, I didn't mentally adjust for physical gold = definitely not tax sheltered.
Actually, you can own gold and silver coins minted by the Treasury in an IRA. The Taxpayer Relief Act of 1997 made this possible: "Your IRA can invest in one, one-half, one-quarter, or one-tenth ounce U.S. gold coins, or one-ounce silver coins minted by the Treasury Department."
Huh.. WillThrill = Will Devane? :D
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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Re: Bogle "5% Gold"

Post by willthrill81 » Thu Jan 17, 2019 5:15 pm

JoMoney wrote:
Thu Jan 17, 2019 5:13 pm
willthrill81 wrote:
Thu Jan 17, 2019 4:23 pm
azanon wrote:
Thu Jan 17, 2019 4:20 pm
Oh yeah right, I didn't mentally adjust for physical gold = definitely not tax sheltered.
Actually, you can own gold and silver coins minted by the Treasury in an IRA. The Taxpayer Relief Act of 1997 made this possible: "Your IRA can invest in one, one-half, one-quarter, or one-tenth ounce U.S. gold coins, or one-ounce silver coins minted by the Treasury Department."
Huh.. WillThrill = Will Devane? :D
You never know... :wink:
“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: Bogle "5% Gold"

Post by Hyperborea » Thu Jan 17, 2019 5:48 pm

willthrill81 wrote:
Thu Jan 17, 2019 5:12 pm
Cycle wrote:
Thu Jan 17, 2019 5:02 pm
It's not worth holding gold/silver at home as there's too much risk it will be stolen or lost in a disaster.
There are some very secure means of storing gold at a home or business. Floor safes are one of them. Without a cutting torch and/or a jackhammer and time, the contents will not be stolen except by a professional safe cracker, and they aren't coming to anything resembling a typical residential home. And unless a tornado or flood rips up a concrete foundation, natural disasters aren't an issue either.
A pair of wire cutters can open most of those safes. After you or your loved one has lost their pinky somebody will open it for them.

willthrill81 wrote:
Thu Jan 17, 2019 5:12 pm
Cycle wrote:
Thu Jan 17, 2019 5:02 pm
1oz Gold coins are too large of a denomination to do anything with, better off holding silver for a doomsday scenario. Imagine trying to buy some rice with a 1oz gold coin worth 150k in today's dollars.
There are many other ways to buy gold than one ounce coins. The Treasury mints 1/10th oz. gold coins, but you can also buy gold bars in quantities as small as 1 gram.
If it's really prepping your doing in the disguise of investing then storing dried beans and rice under the bed is probably of more value. The exchange rate on gold for food in any such scenario is going to be incredibly bad. Imagine going down to your local farmer's market this weekend and trying to give them a shiny bit of metal or perhaps a coin with a denomination on it that is far lower than it's face value. If you're keeping the gold at home it's for paying to leave and go elsewhere.
"Plans are worthless, but planning is everything." - Dwight D. Eisenhower

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Re: Bogle "5% Gold"

Post by willthrill81 » Thu Jan 17, 2019 5:59 pm

Hyperborea wrote:
Thu Jan 17, 2019 5:48 pm
willthrill81 wrote:
Thu Jan 17, 2019 5:12 pm
Cycle wrote:
Thu Jan 17, 2019 5:02 pm
It's not worth holding gold/silver at home as there's too much risk it will be stolen or lost in a disaster.
There are some very secure means of storing gold at a home or business. Floor safes are one of them. Without a cutting torch and/or a jackhammer and time, the contents will not be stolen except by a professional safe cracker, and they aren't coming to anything resembling a typical residential home. And unless a tornado or flood rips up a concrete foundation, natural disasters aren't an issue either.
A pair of wire cutters can open most of those safes.
A quality floor safe has at least 1/2" thick steel and nothing that a wire cutter can even think about touching. And that's assuming that it can even be found. They can be hidden under almost anything.
Hyperborea wrote:
Thu Jan 17, 2019 5:48 pm
After you or your loved one has lost their pinky somebody will open it for them.
That requires that the person who wants it knows that it's there.
Hyperborea wrote:
Thu Jan 17, 2019 5:48 pm
willthrill81 wrote:
Thu Jan 17, 2019 5:12 pm
Cycle wrote:
Thu Jan 17, 2019 5:02 pm
1oz Gold coins are too large of a denomination to do anything with, better off holding silver for a doomsday scenario. Imagine trying to buy some rice with a 1oz gold coin worth 150k in today's dollars.
There are many other ways to buy gold than one ounce coins. The Treasury mints 1/10th oz. gold coins, but you can also buy gold bars in quantities as small as 1 gram.
If it's really prepping your doing in the disguise of investing then storing dried beans and rice under the bed is probably of more value. The exchange rate on gold for food in any such scenario is going to be incredibly bad. Imagine going down to your local farmer's market this weekend and trying to give them a shiny bit of metal or perhaps a coin with a denomination on it that is far lower than it's face value. If you're keeping the gold at home it's for paying to leave and go elsewhere.
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.
“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: Bogle "5% Gold"

Post by GRP » Thu Jan 17, 2019 7:17 pm

willthrill81 wrote:
Thu Jan 17, 2019 5:59 pm
Hyperborea wrote:
Thu Jan 17, 2019 5:48 pm
willthrill81 wrote:
Thu Jan 17, 2019 5:12 pm
Cycle wrote:
Thu Jan 17, 2019 5:02 pm
It's not worth holding gold/silver at home as there's too much risk it will be stolen or lost in a disaster.
There are some very secure means of storing gold at a home or business. Floor safes are one of them. Without a cutting torch and/or a jackhammer and time, the contents will not be stolen except by a professional safe cracker, and they aren't coming to anything resembling a typical residential home. And unless a tornado or flood rips up a concrete foundation, natural disasters aren't an issue either.
A pair of wire cutters can open most of those safes.
A quality floor safe has at least 1/2" thick steel and nothing that a wire cutter can even think about touching. And that's assuming that it can even be found. They can be hidden under almost anything.
Hyperborea wrote:
Thu Jan 17, 2019 5:48 pm
After you or your loved one has lost their pinky somebody will open it for them.
That requires that the person who wants it knows that it's there.
Hyperborea wrote:
Thu Jan 17, 2019 5:48 pm
willthrill81 wrote:
Thu Jan 17, 2019 5:12 pm
Cycle wrote:
Thu Jan 17, 2019 5:02 pm
1oz Gold coins are too large of a denomination to do anything with, better off holding silver for a doomsday scenario. Imagine trying to buy some rice with a 1oz gold coin worth 150k in today's dollars.
There are many other ways to buy gold than one ounce coins. The Treasury mints 1/10th oz. gold coins, but you can also buy gold bars in quantities as small as 1 gram.
If it's really prepping your doing in the disguise of investing then storing dried beans and rice under the bed is probably of more value. The exchange rate on gold for food in any such scenario is going to be incredibly bad. Imagine going down to your local farmer's market this weekend and trying to give them a shiny bit of metal or perhaps a coin with a denomination on it that is far lower than it's face value. If you're keeping the gold at home it's for paying to leave and go elsewhere.
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.
+1

Sound reasoning.

Also, I'll point out that no matter how vulnerable physical gold may or may not be, one's digital assets are even more vulnerable.

Gold that you've kept in secret storage has security through obscurity at the very least. Our digital assets? Malicious hackers know where it is, and digital security systems are getting compromised all the time.

https://www.theverge.com/2014/7/17/5912 ... sinessweek

https://arstechnica.com/information-tec ... he-nasdaq/

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Re: Bogle "5% Gold"

Post by iamlucky13 » Thu Jan 17, 2019 7:28 pm

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.
This is an interesting post that answered a question I was going to ask. Thank you.

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Re: Bogle "5% Gold"

Post by smitcat » Thu Jan 17, 2019 7:32 pm

willthrill81 wrote:
Thu Jan 17, 2019 4:00 pm
azanon wrote:
Thu Jan 17, 2019 3:57 pm
willthrill81 wrote:
Thu Jan 17, 2019 3:48 pm
Jack said that the 5% allocation to gold would be "a hedge against some kind of catastrophe." 5% seems low for the purposes of doing much good, but OTOH, it's unlikely to do much harm if the catastrophe never manifests itself either. This makes me feel a little better about our physical gold holdings.
At least in the past, it has been quite a bit better than just for that purpose. I use an ETF over physical gold, because there's no (easy) way I know of to rebalance with physical gold, to say nothing of the hassle of buying and storing it. Commodities can provide a nice return boost to a portfolio along with just diversification, but quite a bit of that return actually happens via the rebalancing.
The physical gold we hold is just for 'insurance against the unknown'*, as David Stein puts it, not as an investment with a positive expected return. I fully anticipate that the real return will be negative in the long-term, but I'm okay with that in such a small portion of our overall net worth (around 2% currently). We'll probably start bumping that up once we become debt-free in a little over a year.

*Ask a Venezuelan if it is worthwhile to have a little gold.
Agreed that a suitable % of precious metals can be a good diversification - although we do not hold much gold as we prefer silver and palladium added over time. Security is not really a huge risk compared to all other risks.

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Re: Bogle "5% Gold"

Post by danielc » Thu Jan 17, 2019 7:57 pm

willthrill81 wrote:
Thu Jan 17, 2019 4:00 pm
*Ask a Venezuelan if it is worthwhile to have a little gold.
I am a Venezuelan. I do not think that it is at all worthwhile to have a little gold. Venezuelans are NOT using gold as an alternate currency right now, and no Venezuelan would have the faintest clue of what a fair price for a gold coin would be right now. Think of it for a second. A generic person enters a store holding a piece of yellow metal. How will that person and the shop keeper agree on how much food is a fair exchange for that chunk of yellow metal? You tell the shop keeper that it's not just a chunk of yellow metal, it's a Krugerand. The shop keeper says "a what?". The fact is, gold is useless as a currency in Venezuela right now. It truly is. The people who know the fair price of gold and can identify a legit Krugerand are not the people running the grocery store. Before the current crisis, but still at a time when inflation was very high, people preserved their savings by either buying property or by having dollar denominated bank accounts. Today, I don't trust that the property would be of much use, but the dollars would allow you to have some wealth if you leave the country (as my family did).

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Re: Bogle "5% Gold"

Post by willthrill81 » Thu Jan 17, 2019 8:02 pm

danielc wrote:
Thu Jan 17, 2019 7:57 pm
willthrill81 wrote:
Thu Jan 17, 2019 4:00 pm
*Ask a Venezuelan if it is worthwhile to have a little gold.
I am a Venezuelan. I do not think that it is at all worthwhile to have a little gold. Venezuelans are NOT using gold as an alternate currency right now, and no Venezuelan would have the faintest clue of what a fair price for a gold coin would be right now. Think of it for a second. A generic person enters a store holding a piece of yellow metal. How will that person and the shop keeper agree on how much food is a fair exchange for that chunk of yellow metal? You tell the shop keeper that it's not just a chunk of yellow metal, it's a Krugerand. The shop keeper says "a what?". The fact is, gold is useless as a currency in Venezuela right now. It truly is. The people who know the fair price of gold and can identify a legit Krugerand are not the people running the grocery store. Before the current crisis, but still at a time when inflation was very high, people preserved their savings by either buying property or by having dollar denominated bank accounts. Today, I don't trust that the property would be of much use, but the dollars would allow you to have some wealth if you leave the country (as my family did).
I suggest that you read this article from the Miami Herald. They report that many Venezuelans are selling their gold for currency in pawn shops and then immediately buying food with it. You are correct that the pawn shops they are selling their jewelry to aren't giving them a fair market price for it, but that isn't stopping people from selling anyway because they need to eat.
Venezuelans sell gold and silver chains, bracelets, earrings — including pieces that have belonged to their families for decades or generations — so they can walk out the door of the pawnshop with enough money simply to eat, at least for a while.

Some get rid of their family jewels to pay for other necessities like school registration for their children, oil changes for the car, dental procedures or healthcare.
I'm very glad to hear that your family had the means to leave the country with dollars. But we can't make a similar hedge with dollars, obviously. I suppose we could buy a collection of foreign currencies in lieu of gold, but the expected return would still be zero.
“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: Bogle "5% Gold"

Post by danielc » Thu Jan 17, 2019 9:29 pm

willthrill81 wrote:
Thu Jan 17, 2019 8:02 pm
I suggest that you read this article from the Miami Herald. They report that many Venezuelans are selling their gold for currency in pawn shops and then immediately buying food with it. You are correct that the pawn shops they are selling their jewelry to aren't giving them a fair market price for it, but that isn't stopping people from selling anyway because they need to eat.
You said ask a Venezuelan. I am an Venezuelan and I answered. The fact that pawn shops exist is not equivalent to gold being a default currency in Venezuela. It is not. If I wrote an article about Venezuleans (or US federal workers) selling their old couch to get money, you would not conclude that couches are a store of value. Jewelry is just a small portable item that is expensive and you can live without, so it is a reasonable thing for people to pawn. I could have said the same thing about Nintendo games. Gold is not becoming a new currency in Venezuela.
willthrill81 wrote:
Thu Jan 17, 2019 8:02 pm
I'm very glad to hear that your family had the means to leave the country with dollars.
This feels like a needlessly personal comment. You don't know what we had when we left. I never said that MY family had dollars. I described when people did in general, to the best of my recollection. I remember being a child in Venezuela and seeing news reports lamenting how apartment rents were stated in dollars. As you might imagine, my family's departure is a touchy subject for me. You make it sound like we were wealthy (we were not; emigrating was very hard). Dollars is not just something that rich people do, or did. Several poor countries use dollars as their currency, not because everyone in the country is wealthy, but because the country finds itself unable to establish a stable currency.
willthrill81 wrote:
Thu Jan 17, 2019 8:02 pm
But we can't make a similar hedge with dollars, obviously. I suppose we could buy a collection of foreign currencies in lieu of gold, but the expected return would still be zero.
Don't buy gold or other currencies. As a Boglehead, you know of much better alternatives.

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Re: Bogle "5% Gold"

Post by columbia » Thu Jan 17, 2019 10:28 pm

It’s an insurance policy, which shouldnt be expected to keep up with inflation during your lifetime.

My sense is that some presume the second part isn’t true. Shrug.

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Re: Bogle "5% Gold"

Post by Pu239 » Thu Jan 17, 2019 11:13 pm

danielc wrote:
Thu Jan 17, 2019 9:29 pm

You said ask a Venezuelan. I am an Venezuelan and I answered.
Thank you.

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Re: Bogle "5% Gold"

Post by willthrill81 » Thu Jan 17, 2019 11:57 pm

danielc wrote:
Thu Jan 17, 2019 9:29 pm
willthrill81 wrote:
Thu Jan 17, 2019 8:02 pm
I suggest that you read this article from the Miami Herald. They report that many Venezuelans are selling their gold for currency in pawn shops and then immediately buying food with it. You are correct that the pawn shops they are selling their jewelry to aren't giving them a fair market price for it, but that isn't stopping people from selling anyway because they need to eat.
You said ask a Venezuelan. I am an Venezuelan and I answered. The fact that pawn shops exist is not equivalent to gold being a default currency in Venezuela. It is not. If I wrote an article about Venezuleans (or US federal workers) selling their old couch to get money, you would not conclude that couches are a store of value. Jewelry is just a small portable item that is expensive and you can live without, so it is a reasonable thing for people to pawn. I could have said the same thing about Nintendo games. Gold is not becoming a new currency in Venezuela.
willthrill81 wrote:
Thu Jan 17, 2019 8:02 pm
I'm very glad to hear that your family had the means to leave the country with dollars.
This feels like a needlessly personal comment. You don't know what we had when we left. I never said that MY family had dollars. I described when people did in general, to the best of my recollection. I remember being a child in Venezuela and seeing news reports lamenting how apartment rents were stated in dollars. As you might imagine, my family's departure is a touchy subject for me. You make it sound like we were wealthy (we were not; emigrating was very hard). Dollars is not just something that rich people do, or did. Several poor countries use dollars as their currency, not because everyone in the country is wealthy, but because the country finds itself unable to establish a stable currency.
willthrill81 wrote:
Thu Jan 17, 2019 8:02 pm
But we can't make a similar hedge with dollars, obviously. I suppose we could buy a collection of foreign currencies in lieu of gold, but the expected return would still be zero.
Don't buy gold or other currencies. As a Boglehead, you know of much better alternatives.
I thank you for your response, but I must ask you to not say that I said things which I did not. I never said that gold is becoming a new currency in Venezuela or anywhere else, and I never insinuated that you or your family were wealthy.

Since Bogle himself is on the record advocating a 5% allocation to gold, it's perfectly 'Boglehead-ish' to at least suggest the possibility of doing just that.
“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: Bogle "5% Gold"

Post by AlphaLess » Fri Jan 18, 2019 12:03 am

willthrill81 wrote:
Thu Jan 17, 2019 3:48 pm
Jack said that the 5% allocation to gold would be "a hedge against some kind of catastrophe." 5% seems low for the purposes of doing much good, but OTOH, it's unlikely to do much harm if the catastrophe never manifests itself either. This makes me feel a little better about our physical gold holdings.
I don't mean to be presumptuous, but imagine you are someone with a very high net worth, say $100-300MM, and you spend, say, 400-500K a year. Your withdrawal rate is then 0.3-0.5%.

Having 5% in gold could be all that you need in a catastrophic scenario. If your remaining 95% assets reduce down to 5%, and gold doubles, you are still golden, so to speak.
"You can get more with a kind word and a gun than with just a kind word." George Washington

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Re: Bogle "5% Gold"

Post by willthrill81 » Fri Jan 18, 2019 12:13 am

AlphaLess wrote:
Fri Jan 18, 2019 12:03 am
willthrill81 wrote:
Thu Jan 17, 2019 3:48 pm
Jack said that the 5% allocation to gold would be "a hedge against some kind of catastrophe." 5% seems low for the purposes of doing much good, but OTOH, it's unlikely to do much harm if the catastrophe never manifests itself either. This makes me feel a little better about our physical gold holdings.
I don't mean to be presumptuous, but imagine you are someone with a very high net worth, say $100-300MM, and you spend, say, 400-500K a year. Your withdrawal rate is then 0.3-0.5%.

Having 5% in gold could be all that you need in a catastrophic scenario. If your remaining 95% assets reduce down to 5%, and gold doubles, you are still golden, so to speak.
Indeed. I have a relative with a net worth of at least $50 million, and I know that he bought 10k oz. of silver a couple of years ago (over $150k worth at today's spot price). For him, it's nothing more than a little insurance, but he probably has more that he purchased earlier as well.

And speaking of withdrawal rates, gold has historically done a good job at increasing the safe withdrawal rate. For instance, using data since 1970, the 30 year SWR for a 50/50 portfolio of TSM and ITT was 4.5%. But if we replaced 20% of the ITT with gold, the SWR went up to 5.5%, a 22% increase.

While it's counter-intuitive, holding an asset with an expected return of zero can be effective in the withdrawal phase if it's capable of significantly reducing portfolio volatility, especially at the times of peak volatility. Gold has historically done that on some level.
“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: Bogle "5% Gold"

Post by AlphaLess » Fri Jan 18, 2019 12:25 am

willthrill81 wrote:
Fri Jan 18, 2019 12:13 am
AlphaLess wrote:
Fri Jan 18, 2019 12:03 am
willthrill81 wrote:
Thu Jan 17, 2019 3:48 pm
Jack said that the 5% allocation to gold would be "a hedge against some kind of catastrophe." 5% seems low for the purposes of doing much good, but OTOH, it's unlikely to do much harm if the catastrophe never manifests itself either. This makes me feel a little better about our physical gold holdings.
I don't mean to be presumptuous, but imagine you are someone with a very high net worth, say $100-300MM, and you spend, say, 400-500K a year. Your withdrawal rate is then 0.3-0.5%.

Having 5% in gold could be all that you need in a catastrophic scenario. If your remaining 95% assets reduce down to 5%, and gold doubles, you are still golden, so to speak.
Indeed. I have a relative with a net worth of at least $50 million, and I know that he bought 10k oz. of silver a couple of years ago (over $150k worth at today's spot price). For him, it's nothing more than a little insurance, but he probably has more that he purchased earlier as well.

And speaking of withdrawal rates, gold has historically done a good job at increasing the safe withdrawal rate. For instance, using data since 1970, the 30 year SWR for a 50/50 portfolio of TSM and ITT was 4.5%. But if we replaced 20% of the ITT with gold, the SWR went up to 5.5%, a 22% increase.

While it's counter-intuitive, holding an asset with an expected return of zero can be effective in the withdrawal phase if it's capable of significantly reducing portfolio volatility, especially at the times of peak volatility. Gold has historically done that on some level.
I just wish it was easy to own gold. Physical gold ownership is a pain, IMO.

Not sure if gold-holding ETFs would be able to deliver the insurance at times of crisis.
"You can get more with a kind word and a gun than with just a kind word." George Washington

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Re: Bogle "5% Gold"

Post by ninjab » Fri Jan 18, 2019 12:28 am

I do not see any rational logic in investing in something that has an expected inflation adjusted return of 0%, but a hedge against catastrophe is rational and would be served with much better things than gold.

For example, if the US dollar becomes worthless and we are trying to barter with gold to buy food and supplies, I am almost certain a stockpile of guns and ammunition would be much more valuable than their gold equivalent.

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Re: Bogle "5% Gold"

Post by samsdad » Fri Jan 18, 2019 12:34 am

What’s with the abundance of threads about having gold lately? Cause the market had some flatulence in December?

Also, should we ask ladygeek to merge these threads about gold with the 9mm thread?

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Re: Bogle "5% Gold"

Post by JuniorRob » Fri Jan 18, 2019 7:56 am

I don't understand why so many think that gold is only held in preparation for a complete collapse of society and make the argument that it won't be valuable in such a situation. There is middle ground between the economy churning along perfectly and total devastation. Gold serves a purpose in the middle ground scenarios.

Also, it seems as though the majority on here feel that including any gold in one's portfolio is anti boglehead. The video indicates otherwise.

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Re: Bogle "5% Gold"

Post by stimulacra » Fri Jan 18, 2019 8:45 am

willthrill81 wrote:
Thu Jan 17, 2019 5:59 pm
Hyperborea wrote:
Thu Jan 17, 2019 5:48 pm
willthrill81 wrote:
Thu Jan 17, 2019 5:12 pm
Cycle wrote:
Thu Jan 17, 2019 5:02 pm
It's not worth holding gold/silver at home as there's too much risk it will be stolen or lost in a disaster.
There are some very secure means of storing gold at a home or business. Floor safes are one of them. Without a cutting torch and/or a jackhammer and time, the contents will not be stolen except by a professional safe cracker, and they aren't coming to anything resembling a typical residential home. And unless a tornado or flood rips up a concrete foundation, natural disasters aren't an issue either.
A pair of wire cutters can open most of those safes.
A quality floor safe has at least 1/2" thick steel and nothing that a wire cutter can even think about touching. And that's assuming that it can even be found. They can be hidden under almost anything.
I think Hyperborea was suggesting the wire cutters would be used to cut off pinkies.

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Re: Bogle "5% Gold"

Post by aristotelian » Fri Jan 18, 2019 8:55 am

azanon wrote:
Thu Jan 17, 2019 4:01 pm
willthrill81 wrote:
Thu Jan 17, 2019 4:00 pm

The physical gold we hold is just for 'insurance against the unknown'*, as David Stein puts it, not as an investment with a positive expected return. I fully anticipate that the real return will be negative in the long-term, but I'm okay with that in such a small portion of our overall net worth (around 2% currently). We'll probably start bumping that up once we become debt-free in a little over a year.

*Ask a Venezuelan if it is worthwhile to have a little gold.
I'm no gold expert, but I thought the rough approximation for gold's return is 0% real.
0% real is a lot better than Venezuelan cash.

In addition to holding gold, Bogle also advocated 100% U.S. stocks, as well as market timing (within reason), against the Bogleheads conventional wisdom. Not sure which is right.

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Re: Bogle "5% Gold"

Post by Call_Me_Op » Fri Jan 18, 2019 9:29 am

azanon wrote:
Thu Jan 17, 2019 4:01 pm
willthrill81 wrote:
Thu Jan 17, 2019 4:00 pm
azanon wrote:
Thu Jan 17, 2019 3:57 pm
willthrill81 wrote:
Thu Jan 17, 2019 3:48 pm
Jack said that the 5% allocation to gold would be "a hedge against some kind of catastrophe." 5% seems low for the purposes of doing much good, but OTOH, it's unlikely to do much harm if the catastrophe never manifests itself either. This makes me feel a little better about our physical gold holdings.
At least in the past, it has been quite a bit better than just for that purpose. I use an ETF over physical gold, because there's no (easy) way I know of to rebalance with physical gold, to say nothing of the hassle of buying and storing it. Commodities can provide a nice return boost to a portfolio along with just diversification, but quite a bit of that return actually happens via the rebalancing.
The physical gold we hold is just for 'insurance against the unknown'*, as David Stein puts it, not as an investment with a positive expected return. I fully anticipate that the real return will be negative in the long-term, but I'm okay with that in such a small portion of our overall net worth (around 2% currently). We'll probably start bumping that up once we become debt-free in a little over a year.

*Ask a Venezuelan if it is worthwhile to have a little gold.
I'm no gold expert, but I thought the rough approximation for gold's return is 0% real.
Yes, but Mr. Bogle did not "recommend" it because of its long term expected return. He recommended it as a hedge against monetary catastrophe, which is a black swan event.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein

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Re: Bogle "5% Gold"

Post by grayfox » Fri Jan 18, 2019 9:30 am

danielc wrote:
Thu Jan 17, 2019 7:57 pm
willthrill81 wrote:
Thu Jan 17, 2019 4:00 pm
*Ask a Venezuelan if it is worthwhile to have a little gold.
I am a Venezuelan. I do not think that it is at all worthwhile to have a little gold. Venezuelans are NOT using gold as an alternate currency right now, and no Venezuelan would have the faintest clue of what a fair price for a gold coin would be right now. Think of it for a second. A generic person enters a store holding a piece of yellow metal. How will that person and the shop keeper agree on how much food is a fair exchange for that chunk of yellow metal? You tell the shop keeper that it's not just a chunk of yellow metal, it's a Krugerand. The shop keeper says "a what?". The fact is, gold is useless as a currency in Venezuela right now. It truly is. The people who know the fair price of gold and can identify a legit Krugerand are not the people running the grocery store. Before the current crisis, but still at a time when inflation was very high, people preserved their savings by either buying property or by having dollar denominated bank accounts. Today, I don't trust that the property would be of much use, but the dollars would allow you to have some wealth if you leave the country (as my family did).
:?: When you left Venezuela, would you have been able to take with you a roll of 20 1 oz Gold Coins? This is about the size of a roll of U.S. quarters and weighs about 1.3 pounds (0.622 kg) and today is valued at about 26,000 USD.

Were you stopped and searched at the border crossing for valuables, e.g. U.S. Dollars, Euros, Gold, diamonds. Was cash and valuables confiscated at the border? :?:

I'm wondering if people could get their gold out of the country.

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Re: Bogle "5% Gold"

Post by z3r0c00l » Fri Jan 18, 2019 9:46 am

grayfox wrote:
Fri Jan 18, 2019 9:30 am
Were you stopped and searched at the border crossing for valuables, e.g. U.S. Dollars, Euros, Gold, diamonds. Was cash and valuables confiscated at the border? :?:

I'm wondering if people could get their gold out of the country.
Sure, if you leave a portion of the roll behind in bribes.

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Re: Bogle "5% Gold"

Post by garlandwhizzer » Fri Jan 18, 2019 12:58 pm

I think the more interesting point in the interview is not the 5% gold question--what's the big deal about 5% of a fixed portfolio that you can't change for decades as black swan insurance?--but instead Bogle's take on bonds. He suggests that TBM has too many US government bonds relative to corporate bonds for his taste. He prefers a bond portfolio of 70 corp./30 US govt. to the other way around which is roughly how TBM has it (66% govt./34% corp.). Clearly Bogle wants some govt. bonds as a safety net (30%) but he prefers the higher yields of corporates for the majority of his bond holdings. He believes the risk/reward tradeoff of corporate bonds is attractive relative to Treasuries. Bogle is an original thinker, a lightening rod not a weather vane, the reason why as a college student he discovered the simple but effective elegance of index investing before anyone else. His view on bonds runs counter to many, probably most, on the Forum many of whom staunchly advocate 100% government bonds in the portfolio. This bond question is IMO more important for portfolio construction than the 5% gold question.

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Re: Bogle "5% Gold"

Post by GCD » Fri Jan 18, 2019 1:51 pm

As far as I'm concerned St. Jack is only a saint, not a deity. I'm gonna have to part ways with him on gold.

Besides, as far as crisis prep goes, guns and ammo are far more fun to own, actually go up in value, are still useful for barter, and in less turbulent pre-crisis times you don't have to fear the dude with the wire cutters.

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Re: Bogle "5% Gold"

Post by stuper1 » Fri Jan 18, 2019 2:00 pm

Ok, so let's say you have your guns, ammo, and food and you get through the times of economic turmoil. What are you going to do on the other side of the turmoil to rebuild your life? The digital 1's and 0's that stored your Vanguard account information are probably all gone at that point. I have faith that my allocation to physical gold is going to come in very handy at that point. I'm not planning to buy bread with physical gold during the turmoil. The physical gold is to rebuild on the other side of the turmoil. If you have faith that such turmoil will not hit during your lifetime, then you are golden without gold.

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Re: Bogle "5% Gold"

Post by JuniorRob » Fri Jan 18, 2019 2:13 pm

GCD wrote:
Fri Jan 18, 2019 1:51 pm
in less turbulent pre-crisis times you don't have to fear the dude with the wire cutters.
Insure the gold and a safe deposit box is an option.

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Re: Bogle "5% Gold"

Post by willthrill81 » Fri Jan 18, 2019 2:26 pm

stuper1 wrote:
Fri Jan 18, 2019 2:00 pm
Ok, so let's say you have your guns, ammo, and food and you get through the times of economic turmoil. What are you going to do on the other side of the turmoil to rebuild your life? The digital 1's and 0's that stored your Vanguard account information are probably all gone at that point. I have faith that my allocation to physical gold is going to come in very handy at that point. I'm not planning to buy bread with physical gold during the turmoil. The physical gold is to rebuild on the other side of the turmoil. If you have faith that such turmoil will not hit during your lifetime, then you are golden without gold.
My thoughts are similar to yours.
“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: Bogle "5% Gold"

Post by robertmcd » Fri Jan 18, 2019 2:57 pm

willthrill81 wrote:
Fri Jan 18, 2019 2:26 pm
stuper1 wrote:
Fri Jan 18, 2019 2:00 pm
Ok, so let's say you have your guns, ammo, and food and you get through the times of economic turmoil. What are you going to do on the other side of the turmoil to rebuild your life? The digital 1's and 0's that stored your Vanguard account information are probably all gone at that point. I have faith that my allocation to physical gold is going to come in very handy at that point. I'm not planning to buy bread with physical gold during the turmoil. The physical gold is to rebuild on the other side of the turmoil. If you have faith that such turmoil will not hit during your lifetime, then you are golden without gold.
My thoughts are similar to yours.
Correct, if there is any functioning system and it is not full blown mad max, gold will have value. I think 5% is a reasonable amount for this as insurance, but it needs to be physical. If there is a giant monetary collapse brought on by all this money printing and debt, gold could have a 20-30x in purchasing power making that 5% not so small anymore.

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Re: Bogle "5% Gold"

Post by robertmcd » Fri Jan 18, 2019 3:00 pm

z3r0c00l wrote:
Fri Jan 18, 2019 9:46 am
grayfox wrote:
Fri Jan 18, 2019 9:30 am
Were you stopped and searched at the border crossing for valuables, e.g. U.S. Dollars, Euros, Gold, diamonds. Was cash and valuables confiscated at the border? :?:

I'm wondering if people could get their gold out of the country.
Sure, if you leave a portion of the roll behind in bribes.
Or just stick that roll of 1 oz gold coins up somewhere they won't find it :shock:

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Re: Bogle "5% Gold"

Post by retiringwhen » Fri Jan 18, 2019 4:02 pm

willthrill81 wrote:
Thu Jan 17, 2019 5:59 pm
That requires that the person who wants it knows that it's there.
To paraphrase Tyler Durden, the first rule of owning gold is that you don't own any gold.

A local resident didn't follow this rule, and when he went back years later to trade some Gold stashed in his house, he found it had been swapped with some fake bars that were filled with lead or something but looked legit on the outside. He had a good idea of the perpetrators and they were brought to justice (apparently)..... We're talking mid-6 digits worth of gold. This is why I like to read the police blotter and indictments page...

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Re: Bogle "5% Gold"

Post by willthrill81 » Fri Jan 18, 2019 4:21 pm

retiringwhen wrote:
Fri Jan 18, 2019 4:02 pm
willthrill81 wrote:
Thu Jan 17, 2019 5:59 pm
That requires that the person who wants it knows that it's there.
To paraphrase Tyler Durden, the first rule of owning gold is that you don't own any gold.
:beer
“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: Bogle "5% Gold"

Post by Snowjob » Fri Jan 18, 2019 4:31 pm

retiringwhen wrote:
Fri Jan 18, 2019 4:02 pm
willthrill81 wrote:
Thu Jan 17, 2019 5:59 pm
That requires that the person who wants it knows that it's there.
To paraphrase Tyler Durden, the first rule of owning gold is that you don't own any gold.

A local resident didn't follow this rule, and when he went back years later to trade some Gold stashed in his house, he found it had been swapped with some fake bars that were filled with lead or something but looked legit on the outside. He had a good idea of the perpetrators and they were brought to justice (apparently)..... We're talking mid-6 digits worth of gold. This is why I like to read the police blotter and indictments page...
First rule is "you don't talk about gold".

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Re: Bogle "5% Gold"

Post by retiringwhen » Fri Jan 18, 2019 4:35 pm

Snowjob wrote:
Fri Jan 18, 2019 4:31 pm
retiringwhen wrote:
Fri Jan 18, 2019 4:02 pm
willthrill81 wrote:
Thu Jan 17, 2019 5:59 pm
That requires that the person who wants it knows that it's there.
To paraphrase Tyler Durden, the first rule of owning gold is that you don't own any gold.

A local resident didn't follow this rule, and when he went back years later to trade some Gold stashed in his house, he found it had been swapped with some fake bars that were filled with lead or something but looked legit on the outside. He had a good idea of the perpetrators and they were brought to justice (apparently)..... We're talking mid-6 digits worth of gold. This is why I like to read the police blotter and indictments page...
First rule is "you don't talk about gold".
I stand corrected :oops: Second rule is don't quote movies from Memory :-)

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Re: Bogle "5% Gold"

Post by z3r0c00l » Fri Jan 18, 2019 5:42 pm

retiringwhen wrote:
Fri Jan 18, 2019 4:02 pm
willthrill81 wrote:
Thu Jan 17, 2019 5:59 pm
That requires that the person who wants it knows that it's there.
To paraphrase Tyler Durden, the first rule of owning gold is that you don't own any gold.

A local resident didn't follow this rule, and when he went back years later to trade some Gold stashed in his house, he found it had been swapped with some fake bars that were filled with lead or something but looked legit on the outside. He had a good idea of the perpetrators and they were brought to justice (apparently)..... We're talking mid-6 digits worth of gold. This is why I like to read the police blotter and indictments page...
Perhaps tungsten? It is almost exactly as dense as gold. Lead is little more than half the density of gold!

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Re: Bogle "5% Gold"

Post by retiringwhen » Fri Jan 18, 2019 6:03 pm

z3r0c00l wrote:
Fri Jan 18, 2019 5:42 pm
retiringwhen wrote:
Fri Jan 18, 2019 4:02 pm
willthrill81 wrote:
Thu Jan 17, 2019 5:59 pm
That requires that the person who wants it knows that it's there.
To paraphrase Tyler Durden, the first rule of owning gold is that you don't own any gold.

A local resident didn't follow this rule, and when he went back years later to trade some Gold stashed in his house, he found it had been swapped with some fake bars that were filled with lead or something but looked legit on the outside. He had a good idea of the perpetrators and they were brought to justice (apparently)..... We're talking mid-6 digits worth of gold. This is why I like to read the police blotter and indictments page...
Perhaps tungsten? It is almost exactly as dense as gold. Lead is little more than half the density of gold!
my memory is too faulty to remember the exact details, but I have read that tungsten has been used in other cases as well.

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