Does anyone own gold?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
User avatar
willthrill81
Posts: 12009
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: Does anyone own gold?

Post by willthrill81 » Wed Feb 27, 2019 11:21 am

smitcat wrote:
Wed Feb 27, 2019 7:59 am
Please note that you can offset capital gains and losses with your gold trades if that would be helpful with your current portfolio.
This is especially helpful with gold because LTCG for it are a fixed 28%, so you definitely want to offset that with losses if possible.
“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

smitcat
Posts: 3800
Joined: Mon Nov 07, 2016 10:51 am

Re: Does anyone own gold?

Post by smitcat » Wed Feb 27, 2019 11:37 am

willthrill81 wrote:
Wed Feb 27, 2019 11:21 am
smitcat wrote:
Wed Feb 27, 2019 7:59 am
Please note that you can offset capital gains and losses with your gold trades if that would be helpful with your current portfolio.
This is especially helpful with gold because LTCG for it are a fixed 28%, so you definitely want to offset that with losses if possible.
Exactly - unless things are going exceeding well in which case the 28% is not so painful either.

are_cynic
Posts: 99
Joined: Wed Jul 25, 2018 8:14 am

Re: Does anyone own gold?

Post by are_cynic » Wed Feb 27, 2019 11:48 am

permport wrote:
Wed Feb 27, 2019 3:28 am
To the OP: you only avoid gold if you're imprudent. Such an individual is likely to be an investor that relies heavily on U.S.-centric market return data going back 40 or so years. It's what I call Myopic Portfolio Visualizer Syndrome (MPVS).

The prudent thing to do, as demonstrated by investors like Ray Dalio, is to look at global return data going back a couple centuries. That gives you a much more complete picture about how markets really behave. (Remember that the long-term debt cycle is 75-100 years.) Study such data and I am confident you will be convinced to hold a modicum of gold in your portfolio.
In your opinion, would the data before the Nixon took the US (and by extension, the rest of the Breton Woods countries) off the gold standard be relevant? Would you expect investors to value gold differently now that it isn’t backing currencies?
"Invert, always invert" ~Carl Jacobi

User avatar
Tyler9000
Posts: 427
Joined: Fri Aug 21, 2015 11:57 am

Re: Does anyone own gold?

Post by Tyler9000 » Wed Feb 27, 2019 12:25 pm

willthrill81 wrote:
Wed Feb 27, 2019 11:21 am
This is especially helpful with gold because LTCG for it are a fixed 28%, so you definitely want to offset that with losses if possible.
That's not exactly true. Capital gains with gold are taxed as ordinary income and are capped at 28%. They're not fixed at 28%. The tax downside is more around the fact that you don't get any special long-term reduced rate with gold. https://www.investopedia.com/articles/p ... tments.asp

That said, the point is still very true that gold is a nice asset to have in combination with stocks and bonds to take advantage of tax loss harvesting in all three.
Last edited by Tyler9000 on Wed Feb 27, 2019 12:31 pm, edited 2 times in total.

User avatar
willthrill81
Posts: 12009
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: Does anyone own gold?

Post by willthrill81 » Wed Feb 27, 2019 12:31 pm

Tyler9000 wrote:
Wed Feb 27, 2019 12:25 pm
willthrill81 wrote:
Wed Feb 27, 2019 11:21 am
This is especially helpful with gold because LTCG for it are a fixed 28%, so you definitely want to offset that with losses if possible.
That's not exactly true. Capital gains with gold are taxed as ordinary income and are capped at 28%. They're not fixed at 28%. The tax downside is more around the fact that you don't get any special long-term reduced rate with gold. https://www.investopedia.com/articles/p ... tments.asp

That said, the point is still very true that gold is a nice asset to have in combination with stocks and bonds to take advantage of tax loss harvesting in all three.
Thanks for the clarification Tyler. The LTCG rate on gold is equal to your marginal tax rate or 28%, whichever is lower.
“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

Tommy
Posts: 149
Joined: Mon Mar 07, 2016 11:47 pm

Re: Does anyone own gold?

Post by Tommy » Wed Feb 27, 2019 2:46 pm

My grandfather was buying gold coins (note it was illegal in Soviet Union) but his distrust to Soviet currency overwhelmed possible punishment :).
So, when Soviet Union collapsed, and currency became worthless I was able to sold coins for $$ and get out of there. So, gold sometimes is nice to have.
Because of this I do have some gold. Not too much. Maybe 20 oz total. This is not for sell (unless something awful happens) and I'm planning to eventually pass it to my children.

northtexan
Posts: 182
Joined: Mon Jul 11, 2016 8:11 pm

Re: Does anyone own gold?

Post by northtexan » Wed Feb 27, 2019 2:53 pm

I do own some gold and silver. Most of the gold is gold jewelry I got when I was a child. The silver was bought a while ago when it was about 26 dollars.

How does one calculate capital gains or losses and report them when one sells their physical metals? I am assuming you would need to keep receipt from the purchase, if one does not have the purchase price does the IRS consider it purchased at zero? Meaning the value sold at is the capital gain?

GRP
Posts: 99
Joined: Wed Nov 22, 2017 5:35 pm

Re: Does anyone own gold?

Post by GRP » Wed Feb 27, 2019 3:28 pm

permport wrote:
Wed Feb 27, 2019 3:28 am
To the OP: you only avoid gold if you're imprudent. Such an individual is likely to be an investor that relies heavily on U.S.-centric market return data going back 40 or so years. It's what I call Myopic Portfolio Visualizer Syndrome (MPVS).

The prudent thing to do, as demonstrated by investors like Ray Dalio, is to look at global return data going back a couple centuries. That gives you a much more complete picture about how markets really behave. (Remember that the long-term debt cycle is 75-100 years.) Study such data and I am confident you will be convinced to hold a modicum of gold in your portfolio.
Yup, the man's a genius, and is worth listening to.

https://youtu.be/jVwna1aO3Dw?t=325

It's all about creating a portfolio that has real balance. "Diversifying" your portfolio by buying the total stock market isn't really diversifying, given the high correlation that all stocks tend to have -- especially if you have U.S. bias. Putting money into alternatives with different economic drivers behind them is very much key.

pward
Posts: 391
Joined: Fri Dec 21, 2018 8:18 pm

Re: Does anyone own gold?

Post by pward » Wed Feb 27, 2019 3:43 pm

GRP wrote:
Wed Feb 27, 2019 3:28 pm
permport wrote:
Wed Feb 27, 2019 3:28 am
To the OP: you only avoid gold if you're imprudent. Such an individual is likely to be an investor that relies heavily on U.S.-centric market return data going back 40 or so years. It's what I call Myopic Portfolio Visualizer Syndrome (MPVS).

The prudent thing to do, as demonstrated by investors like Ray Dalio, is to look at global return data going back a couple centuries. That gives you a much more complete picture about how markets really behave. (Remember that the long-term debt cycle is 75-100 years.) Study such data and I am confident you will be convinced to hold a modicum of gold in your portfolio.
Yup, the man's a genius, and is worth listening to.

https://youtu.be/jVwna1aO3Dw?t=325

It's all about creating a portfolio that has real balance. "Diversifying" your portfolio by buying the total stock market isn't really diversifying, given the high correlation that all stocks tend to have -- especially if you have U.S. bias. Putting money into alternatives with different economic drivers behind them is very much key.

+1

akl432
Posts: 22
Joined: Fri Jan 25, 2019 3:47 pm

Re: Does anyone own gold?

Post by akl432 » Wed Feb 27, 2019 5:57 pm

gougou wrote:
Tue Feb 26, 2019 9:00 pm
akl432 wrote:
Tue Feb 26, 2019 7:10 pm
gougou wrote:
Tue Feb 26, 2019 5:23 pm
I own gold and silver coins. I only buy specific types of gold coins at issue and hold onto them for a few years for them to appreciate. Typically I am buying close to spot price and when I sell I can realize a 5% to 10% premium on the spot price.

I have most of my liquid savings in physical gold and silver coins. I work for a tech company and earn RSU, my 401k is about 80% in S&P, so that's enough stock exposure for me.
How do you sell them? I made a mistake buying about 10% of my portfolio in gold in 2008, and now I have a bunch of gold bars sitting in my safe deposit box that I don't know how to sell.
I typically sell 1 oz gold bars to SDBullion or US Gold Bureau (I know this company's name is sketchy). They typically pay spot price for 1 oz gold bars. You have to send in the gold and they pay you later, so there's some counter-party risk involved.

I also have access to a wholesaler called Upstate Gold who buy and sell between small dealers. Their bid/ask spread for 1 oz gold bar is usually $10, and their bid/ask spreads for gold eagles, buffalos, maples and other major gold coins are around 1%.

APMEX's buyback prices are usually 1% to 2% lower than these options.
Thank you - I will look into these recommendations! Someone else also suggested contacting my bank (Bank of America). I have also asked for a quote from the place I purchased it, Golden Lion Mint. They are 10-oz gold bars, 1-oz gold Avalon rounds, 1-oz gold Scotia rounds, and some 1-oz Silver Lion rounds, in their original cases. They are not coins. You can see photos of them on their site:
http://www.goldenlionmint.com/product.php

Is there anything I need to know about selling these specific gold bars/rounds and silver rounds? Are they only worth the spot price, or would they command a premium?

suemarkp
Posts: 175
Joined: Sun Nov 12, 2017 8:18 pm

Re: Does anyone own gold?

Post by suemarkp » Wed Feb 27, 2019 6:10 pm

Do you care if 1099's are generated when you sell? If so, you need to limit the quantity. For gold bars and rounds, the 1099 trigger is one KG of gold, so keep it to 30oz or less per company if you want no 1099.

I don't know about any special value for these specific items. I know large silver bars (100oz) you take a hit on because they cost a lot for silver and are harder to move. I could see the 10oz gold bars being harder to move, so you may not receive spot for those. But it will depend on who is buying. Some of the large online places may not care and you may get a better price for a huge single sale.
Mark | Kent, WA

akl432
Posts: 22
Joined: Fri Jan 25, 2019 3:47 pm

Re: Does anyone own gold?

Post by akl432 » Wed Feb 27, 2019 6:23 pm

suemarkp wrote:
Wed Feb 27, 2019 6:10 pm
Do you care if 1099's are generated when you sell? If so, you need to limit the quantity. For gold bars and rounds, the 1099 trigger is one KG of gold, so keep it to 30oz or less per company if you want no 1099.

I don't know about any special value for these specific items. I know large silver bars (100oz) you take a hit on because they cost a lot for silver and are harder to move. I could see the 10oz gold bars being harder to move, so you may not receive spot for those. But it will depend on who is buying. Some of the large online places may not care and you may get a better price for a huge single sale.
Thank you; this is so helpful! I will probably break even or take a loss (and I would report any gain on my taxes), so I guess it doesn't matter if it is reported via 1099. Can you think of a reason it would matter that a 1099 was generated in my situation?

jacksonm
Posts: 172
Joined: Tue Oct 16, 2018 11:48 am

Re: Does anyone own gold?

Post by jacksonm » Wed Feb 27, 2019 6:50 pm

20% of my portfolio is gold, down recently from 25% when I adopted a variant of Harry Browne's permanent portfolio a couple of years ago called the "Golden Butterfly" which increases the stock allocation from 25 to 40% with half of that allocation being small cap value.

About a year's worth of current living expenses is in bullion coins that I can grab and go in an emergency. The rest is in ETF's.

I've been following this strategy for about 12 years now. I have no doubt that many of the members here can show me charts and present facts and figures to prove that it would have been better to have that money in stocks. I already get that but it is basically irrelevant. I'm getting what I want from the gold holdings, even if it's only psychological and it's a strategy I've been able to stick to.

DesertDiva
Posts: 473
Joined: Thu Mar 01, 2018 12:49 pm
Location: In the desert

Re: Does anyone own gold?

Post by DesertDiva » Wed Feb 27, 2019 7:52 pm

enderland wrote:
Sun Jan 28, 2018 9:48 pm
I have a gold wedding ring :beer
+1

User avatar
willthrill81
Posts: 12009
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: Does anyone own gold?

Post by willthrill81 » Wed Feb 27, 2019 8:19 pm

jacksonm wrote:
Wed Feb 27, 2019 6:50 pm
20% of my portfolio is gold, down recently from 25% when I adopted a variant of Harry Browne's permanent portfolio a couple of years ago called the "Golden Butterfly" which increases the stock allocation from 25 to 40% with half of that allocation being small cap value.

About a year's worth of current living expenses is in bullion coins that I can grab and go in an emergency. The rest is in ETF's.

I've been following this strategy for about 12 years now. I have no doubt that many of the members here can show me charts and present facts and figures to prove that it would have been better to have that money in stocks. I already get that but it is basically irrelevant. I'm getting what I want from the gold holdings, even if it's only psychological and it's a strategy I've been able to stick to.
I personally think that the Golden Butterfly is one of the more intriguing portfolios out there and wouldn't be opposed to adopting it myself. It will be very interesting to see if it can maintain its historically consistent returns going forward.
“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

balbrec2
Posts: 207
Joined: Mon Nov 13, 2017 3:03 pm

Re: Does anyone own gold?

Post by balbrec2 » Wed Feb 27, 2019 8:33 pm

hazlitt wrote:
Sun Jan 28, 2018 8:10 pm
I get the investment arguments against it. It doesn't produce anything, historically hasn't held up to the S&P, etc.

The hedge reasons to hold it may be very unlikely to happen, but they are catastrophic if they do occur. Federal debt actually becomes unsustainable, resulting in drastic budget cuts, tax increases, and the dollar losing its status as the world's reserve currency.

I'm 37 years old. I've got 5% gold in my taxable account and none in my 401k. My taxable account is worth more than my 401k, but it's not a huge difference.

Is there any data that supports that idea that a small amount of gold can reduce volatility? Anyone that thinks holding a small amount of gold is a good idea?

Thanks in advance.
I have a modest stash of old silver coins as a disaster hedge, but no gold!

User avatar
Wiggums
Posts: 1231
Joined: Thu Jan 31, 2019 8:02 am

Re: Does anyone own gold?

Post by Wiggums » Wed Feb 27, 2019 9:28 pm

enderland wrote:
Sun Jan 28, 2018 9:48 pm
I have a gold wedding ring :beer
I have platinum and I only wore it on the wedding day
:-)

gougou
Posts: 177
Joined: Thu Sep 28, 2017 7:42 pm
Location: San Francisco Bay Area

Re: Does anyone own gold?

Post by gougou » Wed Feb 27, 2019 9:32 pm

akl432 wrote:
Wed Feb 27, 2019 5:57 pm
gougou wrote:
Tue Feb 26, 2019 9:00 pm
akl432 wrote:
Tue Feb 26, 2019 7:10 pm
gougou wrote:
Tue Feb 26, 2019 5:23 pm
I own gold and silver coins. I only buy specific types of gold coins at issue and hold onto them for a few years for them to appreciate. Typically I am buying close to spot price and when I sell I can realize a 5% to 10% premium on the spot price.

I have most of my liquid savings in physical gold and silver coins. I work for a tech company and earn RSU, my 401k is about 80% in S&P, so that's enough stock exposure for me.
How do you sell them? I made a mistake buying about 10% of my portfolio in gold in 2008, and now I have a bunch of gold bars sitting in my safe deposit box that I don't know how to sell.
I typically sell 1 oz gold bars to SDBullion or US Gold Bureau (I know this company's name is sketchy). They typically pay spot price for 1 oz gold bars. You have to send in the gold and they pay you later, so there's some counter-party risk involved.

I also have access to a wholesaler called Upstate Gold who buy and sell between small dealers. Their bid/ask spread for 1 oz gold bar is usually $10, and their bid/ask spreads for gold eagles, buffalos, maples and other major gold coins are around 1%.

APMEX's buyback prices are usually 1% to 2% lower than these options.
Thank you - I will look into these recommendations! Someone else also suggested contacting my bank (Bank of America). I have also asked for a quote from the place I purchased it, Golden Lion Mint. They are 10-oz gold bars, 1-oz gold Avalon rounds, 1-oz gold Scotia rounds, and some 1-oz Silver Lion rounds, in their original cases. They are not coins. You can see photos of them on their site:
http://www.goldenlionmint.com/product.php

Is there anything I need to know about selling these specific gold bars/rounds and silver rounds? Are they only worth the spot price, or would they command a premium?
I'm afraid those gold bars won't command any premiums. The 1 oz gold Scotia round might be worth spot price if it is COMEX or LBMA approved, however, you'd have to find a dealer who carries it (such dealers will probably pay close to spot price). I have never seen that 10 oz lion gold bar before so it probably comes from a small/private mint.

My recommendation is to call as many online dealers as possible. These are some of the legitimate dealers I know:
APMEX, JMBullion, SDBullion, BullionExchanges, Provident Metals, Kitco, ModernCoinMart, US Gold Bureau, Texas Precious Metals

You could also consider selling small pieces slowly on r/Pmsforsale/. You could get better prices. Just beware of the risks selling to strangers.

User avatar
jabberwockOG
Posts: 1749
Joined: Thu May 28, 2015 7:23 am

Re: Does anyone own gold?

Post by jabberwockOG » Wed Feb 27, 2019 10:47 pm

I have a platinum wedding ring that stays in the safe, while I wear daily stainless steel ring ($12 from Amazon) that looks and feels 100% identical to the $1,200 ring.

I have zero use for gold as an investment. The kind of catastrophe that would make gold shoot up and stay up in value would also favor folks with 10k of 9mm and .22 rounds which I consider much more practical for that kind of scenario.

All Seasons
Posts: 119
Joined: Sun Dec 10, 2017 4:14 pm

Re: Does anyone own gold?

Post by All Seasons » Thu Feb 28, 2019 4:01 pm

I sincerely believe that one needs exposure to gold, silver, or just commodities in general to have a really balanced portfolio.

Ignore these asset classes at your peril. I believe Larry Swedroe and Ray Dalio have both written/spoken pretty substantially on these alternatives, and why it is advisable to have them.
The market portfolio is always a legitimate portfolio.

Smith1776
Posts: 31
Joined: Fri Apr 21, 2017 5:37 pm

Re: Does anyone own gold?

Post by Smith1776 » Thu Feb 28, 2019 7:01 pm

All Seasons wrote:
Thu Feb 28, 2019 4:01 pm
I sincerely believe that one needs exposure to gold, silver, or just commodities in general to have a really balanced portfolio.

Ignore these asset classes at your peril. I believe Larry Swedroe and Ray Dalio have both written/spoken pretty substantially on these alternatives, and why it is advisable to have them.
Yup, they both have. Although they both come at the topic from some very different angles.

Dalio's book Principles for Navigating Big Debt Crises is a very compelling read, and lays out the exact economics behind why precious metals and commodities make for good additions to a balanced asset allocation.

I too agree with Swedroe's take that we need to look beyond 60/40: https://www.etf.com/sections/index-inve ... nopaging=1

suemarkp
Posts: 175
Joined: Sun Nov 12, 2017 8:18 pm

Re: Does anyone own gold?

Post by suemarkp » Thu Feb 28, 2019 11:06 pm

akl432 wrote:
Wed Feb 27, 2019 6:23 pm
Thank you; this is so helpful! I will probably break even or take a loss (and I would report any gain on my taxes), so I guess it doesn't matter if it is reported via 1099. Can you think of a reason it would matter that a 1099 was generated in my situation?
It will force the IRS to examine your transaction. I don't know what they will do if they don't believe your basis and gains or losses. You may avoid it (not sure, I'm speculating here) if you have no 1099 so no paperwork at all. All they know is what you say the buying and selling prices are unless there is some paper trail. They can do a sanity check of price -vs- date to verify you're in the ballpark.

You're dealing with a significant transaction. Not sure what triggers them to dig deeper. Saying everything was purchased in August 2011 may trigger some digging (that's when gold peaked at around $1800/oz).
Mark | Kent, WA

All Seasons
Posts: 119
Joined: Sun Dec 10, 2017 4:14 pm

Re: Does anyone own gold?

Post by All Seasons » Fri Mar 01, 2019 6:53 pm

Smith1776 wrote:
Thu Feb 28, 2019 7:01 pm
All Seasons wrote:
Thu Feb 28, 2019 4:01 pm
I sincerely believe that one needs exposure to gold, silver, or just commodities in general to have a really balanced portfolio.

Ignore these asset classes at your peril. I believe Larry Swedroe and Ray Dalio have both written/spoken pretty substantially on these alternatives, and why it is advisable to have them.
Yup, they both have. Although they both come at the topic from some very different angles.

Dalio's book Principles for Navigating Big Debt Crises is a very compelling read, and lays out the exact economics behind why precious metals and commodities make for good additions to a balanced asset allocation.

I too agree with Swedroe's take that we need to look beyond 60/40: https://www.etf.com/sections/index-inve ... nopaging=1
Started it last night as per your recommendation, and just finished it a few moments ago. A ridiculously interesting and insightful book... and FREE to boot! Thanks, Smith.

:beer
The market portfolio is always a legitimate portfolio.

hornet1
Posts: 30
Joined: Sun Oct 21, 2018 11:01 am

Re: Does anyone own gold?

Post by hornet1 » Sun Mar 03, 2019 11:32 pm

Yes I too am a Ray Dalio fan.

He shoots for 7.5% gold in his portfolio

I actually like holding physical gold, partially for control reasons and for SHTF (even if SHTF scenarios are 1% chance)

It doesn't hurt to hedge into gold and the only certainty we know is there will always be uncertainty, and cycles can repeat, but can't be predicted

DB2
Posts: 338
Joined: Thu Jan 17, 2019 10:07 pm

Re: Does anyone own gold?

Post by DB2 » Mon Mar 04, 2019 12:19 am

Patzer wrote:
Thu Feb 01, 2018 9:58 am
Gold is protection against a catastrophic systemic failure.
If the system fails, are you going to be happy with 5% of your assets. In other words, it has limited value as a hedge, because you cannot retire on 5% of your investable assets.
For the extremely wealthy, setting asides money in different forms on different continents is very common, to protect against any possible situation, but for the average investor, it is a waste of portfolio space.

The events that justify owning gold can usually be foreseen well in advance, and switching to gold even after the bad news hits has still been a good hedge.

Example 1: If you lived in Europe in the run up to WW2, you had several years to see what was coming on the horizon. Although, you would have been far better off to move to a different continent, than to try to hedge with gold.
Source: History books and political cartoons from the 1930s.

Example 2: In 2008, when the markets crashed, golds price actually dipped with the markets, and then proceeding to progressively go up for the next 2 years, until it started to drop once it was clear we were not going to have another great depression. Consequently, there was plenty of time to buy gold, even into 2009 and still make a handsome profit off it, and therefore no reason to hold it going into 2008.

For events that can't be foreseen,like a zombie apocalypse/Yellowstone eruption, gold in an ETF would probably not be worth much, because you won't be able to physically access it. In those situations, physical gold would have some value, but capable friends, dried food, and access to clean water would be far more valuable.
Agreed, but I would say OUNZ by VanEck is the best Gold ETF if someone prefers that route as it provides an option (for a cost, of course) to actually take physical delivery from London.

AlphaLess
Posts: 1554
Joined: Fri Sep 29, 2017 11:38 pm
Location: Kentucky

Re: Does anyone own gold?

Post by AlphaLess » Mon Mar 04, 2019 12:46 am

I have a platinum ring: does that count?
"You can get more with a kind word and a gun than with just a kind word." George Washington

pward
Posts: 391
Joined: Fri Dec 21, 2018 8:18 pm

Re: Does anyone own gold?

Post by pward » Mon Mar 04, 2019 8:33 am

hornet1 wrote:
Sun Mar 03, 2019 11:32 pm
Yes I too am a Ray Dalio fan.

He shoots for 7.5% gold in his portfolio

I actually like holding physical gold, partially for control reasons and for SHTF (even if SHTF scenarios are 1% chance)

It doesn't hurt to hedge into gold and the only certainty we know is there will always be uncertainty, and cycles can repeat, but can't be predicted
He looks for about 15% in commodities. That is usually split between gold and physical commodities, but could also be just plain 15% gold. Having only 7.5% in commodities is not enough for his risk parity strategy to work in inflation.

User avatar
permport
Posts: 172
Joined: Sat Mar 31, 2018 11:20 am

Re: Does anyone own gold?

Post by permport » Mon Mar 04, 2019 2:27 pm

pward wrote:
Mon Mar 04, 2019 8:33 am
hornet1 wrote:
Sun Mar 03, 2019 11:32 pm
Yes I too am a Ray Dalio fan.

He shoots for 7.5% gold in his portfolio

I actually like holding physical gold, partially for control reasons and for SHTF (even if SHTF scenarios are 1% chance)

It doesn't hurt to hedge into gold and the only certainty we know is there will always be uncertainty, and cycles can repeat, but can't be predicted
He looks for about 15% in commodities. That is usually split between gold and physical commodities, but could also be just plain 15% gold. Having only 7.5% in commodities is not enough for his risk parity strategy to work in inflation.
Such a brilliant guy. For those unaware, his life advice is just as incredible as his investing advice, as per below.

https://youtu.be/B9XGUpQZY38
Buy right and hold tight.

hornet1
Posts: 30
Joined: Sun Oct 21, 2018 11:01 am

Re: Does anyone own gold?

Post by hornet1 » Sun Mar 10, 2019 7:01 pm

permport wrote:
Mon Mar 04, 2019 2:27 pm
pward wrote:
Mon Mar 04, 2019 8:33 am
hornet1 wrote:
Sun Mar 03, 2019 11:32 pm
Yes I too am a Ray Dalio fan.

He shoots for 7.5% gold in his portfolio

I actually like holding physical gold, partially for control reasons and for SHTF (even if SHTF scenarios are 1% chance)

It doesn't hurt to hedge into gold and the only certainty we know is there will always be uncertainty, and cycles can repeat, but can't be predicted
He looks for about 15% in commodities. That is usually split between gold and physical commodities, but could also be just plain 15% gold. Having only 7.5% in commodities is not enough for his risk parity strategy to work in inflation.
Such a brilliant guy. For those unaware, his life advice is just as incredible as his investing advice, as per below.

https://youtu.be/B9XGUpQZY38
Yes Ray dalio is the man Principles book is awesome! :sharebeer

Tdubs
Posts: 660
Joined: Tue Apr 24, 2018 7:50 pm

Re: Does anyone own gold?

Post by Tdubs » Sun Jun 23, 2019 6:46 pm

willthrill81 wrote:
Wed Feb 27, 2019 8:19 pm
jacksonm wrote:
Wed Feb 27, 2019 6:50 pm
20% of my portfolio is gold, down recently from 25% when I adopted a variant of Harry Browne's permanent portfolio a couple of years ago called the "Golden Butterfly" which increases the stock allocation from 25 to 40% with half of that allocation being small cap value.

About a year's worth of current living expenses is in bullion coins that I can grab and go in an emergency. The rest is in ETF's.

I've been following this strategy for about 12 years now. I have no doubt that many of the members here can show me charts and present facts and figures to prove that it would have been better to have that money in stocks. I already get that but it is basically irrelevant. I'm getting what I want from the gold holdings, even if it's only psychological and it's a strategy I've been able to stick to.
I personally think that the Golden Butterfly is one of the more intriguing portfolios out there and wouldn't be opposed to adopting it myself. It will be very interesting to see if it can maintain its historically consistent returns going forward.
There was a recent thread on the 18 or so portfolios listed on porfoliocharts.com. It is interesting to see that the three portfolios that had the highest perpetual withdrawal rate over about 20 years all had gold in them (Butterfly, Pinwheel, and permanent), even though their other holdings differed quite a bit.

IngognitoUSA
Posts: 179
Joined: Sat Mar 11, 2017 7:54 am

Re: Does anyone own gold?

Post by IngognitoUSA » Sun Jun 23, 2019 8:10 pm

Gold in the USA in useless at this time as investment. OTOH, citizens of Syria and Venezuela would have been wise to keep their investments in gold. The Syrian stock, currency and real estate are in bad shape.

alter
Posts: 243
Joined: Thu Feb 26, 2015 11:27 pm
Location: Chicago

Re: Does anyone own gold?

Post by alter » Sun Jun 23, 2019 8:11 pm

Yep but only physical gold and silver coins and bars.

stuper1
Posts: 160
Joined: Tue Apr 03, 2018 9:30 am

Re: Does anyone own gold?

Post by stuper1 » Sun Jun 23, 2019 10:07 pm

Tdubs wrote:
Sun Jun 23, 2019 6:46 pm
There was a recent thread on the 18 or so portfolios listed on porfoliocharts.com. It is interesting to see that the three portfolios that had the highest perpetual withdrawal rate over about 20 years all had gold in them (Butterfly, Pinwheel, and permanent), even though their other holdings differed quite a bit.
IngognitoUSA wrote:
Sun Jun 23, 2019 8:10 pm
Gold in the USA in useless at this time as investment.
It's interesting to compare the above two statements. The first statement uses some facts. The second statement makes a bald assertion with nothing to back it up. And yet people like me who own a fair bit of gold to get some diversification into a hard, non-electronic asset that is uncorrelated with stocks/bonds get labeled as naive simpletons who are easily manipulated by shysters.

j0nnyg1984
Posts: 602
Joined: Sun Apr 24, 2016 9:55 am

Re: Does anyone own gold?

Post by j0nnyg1984 » Sun Jun 23, 2019 10:17 pm

I have a small amount of gold, but a stupid large amount of silver. It’s down about 50% from my purchase price. When silver was spiking 5-6 years ago and got up to ~$50 an ounce, I thought about selling, but didn’t. Big mistake.

I don’t need the money, so I continue to keep the crap in the bottom of my safe. Hopefully one day I can get my money back out of it.

User avatar
willthrill81
Posts: 12009
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: Does anyone own gold?

Post by willthrill81 » Sun Jun 23, 2019 10:30 pm

j0nnyg1984 wrote:
Sun Jun 23, 2019 10:17 pm
I have a small amount of gold, but a stupid large amount of silver. It’s down about 50% from my purchase price. When silver was spiking 5-6 years ago and got up to ~$50 an ounce, I thought about selling, but didn’t. Big mistake.

I don’t need the money, so I continue to keep the crap in the bottom of my safe. Hopefully one day I can get my money back out of it.
Personally, I don't really care what the current prices for precious metals are. I hold them only as an insurance policy of sorts, and if the time came that I needed to sell them, the price would likely be well beyond whatever I paid for them.
“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

z3r0c00l
Posts: 1429
Joined: Fri Jul 06, 2012 11:43 am
Location: NYC
Contact:

Re: Does anyone own gold?

Post by z3r0c00l » Mon Jun 24, 2019 5:34 am

hazlitt wrote:
Sun Jan 28, 2018 8:10 pm

I've got 5% gold in my taxable account and none in my 401k.
That's where you lost me. This gold is supposed to protect you in the event of a near collapse of the economy, but you hold it in a mutual fund? That fund/company could easily go under at the very moment you need it. The gold in vaults could be nationalized, etc. If this is for collapse scenario, you need to hold the gold yourself in small units easy for transport and bartering.

balbrec2
Posts: 207
Joined: Mon Nov 13, 2017 3:03 pm

Re: Does anyone own gold?

Post by balbrec2 » Mon Jun 24, 2019 8:14 am

StormShadow wrote:
Thu Feb 01, 2018 11:05 pm
I have a few silver and gold coins. It doesn't make up 5% (maybe close to 1%) and I don't recommend it as an investment.

But I'd MUCH rather have gold than bitcoin. :mrgreen:
I also have a bunch of old silver coins as a disaster hedge but I
know its not a good investment. It's a small insurance policy.

User avatar
Forester
Posts: 268
Joined: Sat Jan 19, 2019 2:50 pm
Location: UK

Re: Does anyone own gold?

Post by Forester » Sat Jul 06, 2019 9:20 am

What is better from the perspective of getting a rebalancing bonus - gold or gold stocks? There is not much data, but GDX has a higher correlation to the S&P than gold. However GDX is also more volatile. Perhaps it isn't a big deal either way.

User avatar
willthrill81
Posts: 12009
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: Does anyone own gold?

Post by willthrill81 » Sat Jul 06, 2019 9:39 am

Forester wrote:
Sat Jul 06, 2019 9:20 am
What is better from the perspective of getting a rebalancing bonus - gold or gold stocks? There is not much data, but GDX has a higher correlation to the S&P than gold. However GDX is also more volatile. Perhaps it isn't a big deal either way.
I don't know about a rebalancing bonus, which is largely more mythical than anything else, but if I wanted to own gold, I'd own gold, not mining companies. IAU would be a strong contender.
“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

chrisjul
Posts: 169
Joined: Sun Jan 06, 2008 3:15 pm

Re: Does anyone own gold?

Post by chrisjul » Sat Jul 06, 2019 9:43 am

Used to....losing proposition for me. Dont anymore.

Its like being a "Don't" better in craps . You are hoping for disaster. Dont like that.

bernoulli
Posts: 107
Joined: Sat Feb 02, 2019 1:13 pm

Re: Does anyone own gold?

Post by bernoulli » Sat Jul 06, 2019 9:48 am

Not as a form of investment.

User avatar
Wiggums
Posts: 1231
Joined: Thu Jan 31, 2019 8:02 am

Re: Does anyone own gold?

Post by Wiggums » Sat Jul 06, 2019 10:41 am

bernoulli wrote:
Sat Jul 06, 2019 9:48 am
Not as a form of investment.
Same here

User avatar
unclescrooge
Posts: 3608
Joined: Thu Jun 07, 2012 7:00 pm

Re: Does anyone own gold?

Post by unclescrooge » Sat Jul 06, 2019 11:12 am

munemaker wrote:
Tue Feb 26, 2019 8:28 pm
This has been discussed before. Check this out; Uncle Scrooge owns some gold coins:

viewtopic.php?t=234735&start=100#p3857477
viewtopic.php?t=234735&start=100
Hahahaha, I can't believe you remember that!

It is true. I own French 20 franc gold coins, golden 1oz US Buffalo's, 1oz golden dragons from the Perth mint, silver dollars, silver eagles and assorted 1oz silver coins from Perth mint.

If I had to liquidate them I would do one of two things. 1.Contact Apmex and sell to them.
2. Offer them as down payment on a house. You would be surprised how easily people are influenced by shiny things.

User avatar
unclescrooge
Posts: 3608
Joined: Thu Jun 07, 2012 7:00 pm

Re: Does anyone own gold?

Post by unclescrooge » Sat Jul 06, 2019 11:17 am

permport wrote:
Wed Feb 27, 2019 3:28 am
To the OP: you only avoid gold if you're imprudent. Such an individual is likely to be an investor that relies heavily on U.S.-centric market return data going back 40 or so years. It's what I call Myopic Portfolio Visualizer Syndrome (MPVS).

The prudent thing to do, as demonstrated by investors like Ray Dalio, is to look at global return data going back a couple centuries. That gives you a much more complete picture about how markets really behave. (Remember that the long-term debt cycle is 75-100 years.) Study such data and I am confident you will be convinced to hold a modicum of gold in your portfolio.
+1

5 centuries of human history and 2 centuries of global data won't convince some people that gold is good, just as 50 years of scientific data won't convince some people to vaccinate their kids.

User avatar
unclescrooge
Posts: 3608
Joined: Thu Jun 07, 2012 7:00 pm

Re: Does anyone own gold?

Post by unclescrooge » Sat Jul 06, 2019 11:19 am

cdu7 wrote:
Wed Feb 27, 2019 8:24 am
This is likely outside of our lifetimes, but just wait until asteroid mining becomes cost effective. The price of gold, platinum, and many other rare and valuable metals will go the way of aluminum. The nearest asteroid to earth contains far more gold and platinum than has been ever mined in human history.
Yup. Look what the Spanish did to silver prices when they looted the Incas.

Doesn't mean people won't be hypnotized by shiny things.

User avatar
unclescrooge
Posts: 3608
Joined: Thu Jun 07, 2012 7:00 pm

Re: Does anyone own gold?

Post by unclescrooge » Sat Jul 06, 2019 11:23 am

Tommy wrote:
Wed Feb 27, 2019 2:46 pm
My grandfather was buying gold coins (note it was illegal in Soviet Union) but his distrust to Soviet currency overwhelmed possible punishment :).
So, when Soviet Union collapsed, and currency became worthless I was able to sold coins for $$ and get out of there. So, gold sometimes is nice to have.
Because of this I do have some gold. Not too much. Maybe 20 oz total. This is not for sell (unless something awful happens) and I'm planning to eventually pass it to my children.
This is precisely why I own physical gold. It's a good insurance to have when fiat currency collapses.

The US dollar is the world's best currency, but it is still fiat currency.

I also own a small% in ETF form in my portfolio because I like how it acts with stocks and bonds.

spectec
Posts: 1414
Joined: Mon Jul 14, 2014 8:00 am

Re: Does anyone own gold?

Post by spectec » Sat Jul 06, 2019 11:33 am

I think owning physical gold also calls for another precious metals decision. In the event of an apocalypse in which the gold is necessary, you're also going to need a good supply of lead. Otherwise, the people with more lead will eventually own your gold.
Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. - Will Rogers

User avatar
StormShadow
Posts: 727
Joined: Thu Feb 09, 2012 6:20 pm

Re: Does anyone own gold?

Post by StormShadow » Sat Jul 06, 2019 12:11 pm

hazlitt wrote:
Sun Jan 28, 2018 8:10 pm
I get the investment arguments against it. It doesn't produce anything, historically hasn't held up to the S&P, etc.
To quote Magneto from X-Men...

“Why do you ask questions to which you already know the answers?”

illumination
Posts: 90
Joined: Tue Apr 02, 2019 6:13 pm

Re: Does anyone own gold?

Post by illumination » Sat Jul 06, 2019 2:45 pm

I own some physical gold, but not a gold bug. In hindsight, would have preferred dropping it into an index fund but for now it stays put and is a really small part of my portfolio.

I know everyone likes to think anyone that owns gold is preparing for some sort of "Mad Max" scenario, but I think a more plausible scenario is just higher inflation like we saw in the late 1970's/early 1980's, which wasn't that long ago and is not a far-fetched concept we could experience again. If we had double digit inflation and didn't have the political will power to correct course, some gold is nice.

If I lived in certain countries, you better believe I would have an outsized investment in physical gold even though I tend to agree it's usually dead money.

User avatar
arcticpineapplecorp.
Posts: 4273
Joined: Tue Mar 06, 2012 9:22 pm

Re: Does anyone own gold?

Post by arcticpineapplecorp. » Sat Jul 06, 2019 8:39 pm

hazlitt wrote:
Sun Jan 28, 2018 8:10 pm
I'm 37 years old. I've got 5% gold in my taxable account and none in my 401k. My taxable account is worth more than my 401k, but it's not a huge difference.

Is there any data that supports that idea that a small amount of gold can reduce volatility? Anyone that thinks holding a small amount of gold is a good idea?
How would 5% in gold have done when the markets last went "barking mad" (William Bernstein quote) in 2008?

while the U.S. stock market fell by 37% (blue line on chart below)
gold (as per gld etf) went up 2.98% (orange line below)

would that have helped?

The total bond market index fund (vanguard, admiral, in green line below) did better than that, going up 5.14%. So you would have done better holding more bonds (high quality, short to intermediate) than gold.

Image

source:
https://quotes.morningstar.com/chart/fu ... A%5B%5D%7D

what do you think of gold now?
"May you live as long as you want and never want as long as you live" -- Irish Blessing | "Invest we must" -- Jack Bogle

Post Reply