Help - Negative Gold and Silver Portfolio

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myretirement
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Help - Negative Gold and Silver Portfolio

Post by myretirement » Tue Jan 14, 2020 8:33 am

I am 48 my first purchase in Roth acct was GOLD and SLV a few weeks ago and it keeps going down. I figured I start slow with a safer option but I am at a big loss but don’t want to sell it and lose about $900 between the two. I was thinking about buying a stock and wanted more time to research which one but I am thinking I might just have to buy into one that is going up daily to make up and even out my newly portfolio considering it only has Gold 500 shares and SLV 175 shares. Please let me know if this is a bad idea?

If so my thoughts were Niveda Tesla or Apple.. Amazon is a little high and I don’t think I will be able to buy enough shares to even it out since I only have 5k left in cash. Thank you!
Last edited by myretirement on Tue Jan 14, 2020 9:42 am, edited 1 time in total.

DesertDiva
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Re: Help - Negative Gold and Silver Portfolio

Post by DesertDiva » Tue Jan 14, 2020 8:39 am

Before you do anything else, start here:
https://www.bogleheads.org/wiki/Getting_started

3funder
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Re: Help - Negative Gold and Silver Portfolio

Post by 3funder » Tue Jan 14, 2020 8:49 am

PM me, please.

Royal Blue
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Re: Help - Negative Gold and Silver Portfolio

Post by Royal Blue » Tue Jan 14, 2020 8:49 am

Trading like this is going to leave you broke my friend. I’d personally keep the GLD/SLV (the way central banks are manipulating and debasing currency those assets will eventually pay off.) I’d take the remaining money and buy low cost indexes. Check out the wiki “How to get started” on BH site. I wouldn’t jump in individual stocks. If you don’t want to stick with the GLD/SLV wait a few days/weeks/month for it to rebound. Then when you’re whole you can sell, but no reason to lose $900. Right now it’s a paper loss and I’m sure you have time on your side. I’d just be very careful how you invest moving forward.

Jack FFR1846
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Re: Help - Negative Gold and Silver Portfolio

Post by Jack FFR1846 » Tue Jan 14, 2020 9:07 am

You could hold it for a long time. Your loss will probably be reduced. You're still going to lose money. I learned my lesson with junk silver (physical) taking a beating of maybe half my investment gone. Lucky for me, I was too scared to put much money into it, investing about $2k and getting back a bit over $1k.

I now only buy into the 3 fund portfolio and have been watching my balance increase steadily for about 5 years now.
Bogle: Smart Beta is stupid

lexor
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Re: Help - Negative Gold and Silver Portfolio

Post by lexor » Tue Jan 14, 2020 9:24 am

myretirement wrote:
Tue Jan 14, 2020 8:33 am
My first purchase in Roth acct was GOLD and SLV a few weeks ago and it keeps going down. I figured I start slow with a safer option but I am at a big loss but don’t want to sell it and lose about $900 between the two. I was thinking about buying a stock and wanted more time to research which one but I am thinking I might just have to buy into one that is going up daily to make up and even out my newly portfolio considering it only has Gold 500 shares and SLV 175 shares. Please let me know if this is a bad idea?

If so my thoughts were Niveda Tesla or Apple.. Amazon is a little high and I don’t think I will be able to buy enough shares to even it out since I only have 5k left in cash. Thank you!
Instead of just holding gold and silver you should try to diversify your assets. Broad market stock and bond index funds are what you will see recommended here. Commodities like gold and silver are generally discouraged but better than cash historically.

You don't list your age but one common asset allocations recommendation is 100 minus your age in stocks and the remaining percentage in bonds. Fidelity, Schwab and Vanguard have the best product offerings (in that order) for tax advantaged accounts for educated investors in my opinion so I'd pick one of those once you pick an asset allocation.

I'd definitely educate yourself more on bogglehead investing style before rushing.

minesweep
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Re: Help - Negative Gold and Silver Portfolio

Post by minesweep » Tue Jan 14, 2020 9:25 am

myretirement,

Yes, it is a bad idea. I would stop chasing performance in sectors or individual stocks. If you buy an individual stock and it goes down too what will you do then? Most all of the Bogleheads here are not going to suggest you invest in any individual stock. If this money is for your retirement (as your moniker suggests) then invest it in one of the funds you mention (Total Stock Market, Target Date or Total International Funds) in your initial posting.
Last edited by minesweep on Tue Jan 14, 2020 9:32 am, edited 1 time in total.

dukeblue219
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Re: Help - Negative Gold and Silver Portfolio

Post by dukeblue219 » Tue Jan 14, 2020 9:29 am

myretirement wrote:
Tue Jan 14, 2020 8:33 am
my thoughts were Niveda Tesla or Apple.. Amazon is a little high and I don’t think I will be able to buy enough shares to even it out since I only have 5k left in cash. Thank you!
Definitely work through the getting started pages and don't rush into anything to try to make up your losses. That's a surefire way to dig a deeper hole.

As for the part I quoted above, all of those are expensive stocks relative to their earnings. Pay no attention to the per share price or the number of shares you can buy. Whether you own 1 share worth $1000 or 100 shares worth $10 each means nothing. Either is equally likely to gain or lose 10%. A "cheap" share price does not mean it's more likely to go up, or has room to grow. This is a very common misconception of beginners, so don't feel bad, but don't rush into this before you have a thorough understanding of what you're investing in.

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Watty
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Re: Help - Negative Gold and Silver Portfolio

Post by Watty » Tue Jan 14, 2020 9:49 am

myretirement wrote:
Tue Jan 14, 2020 8:33 am
....I am at a big loss but don’t want to sell it and lose about $900 between the two.
One thing you need to accept is that you have already lost that $900.

Go on and sell the gold and silver and keep the money parked in your account while you come up with a long term plan.

Ironically in the long term this could turn out to be a very good thing for you since it will hurt enough that it may get you on good long term path and make you a better investor for the rest of your life.

Most of use here made similar mistakes when we were starting out and may have lost a lot more than that. I can still remember the names of some individual stocks that I bought during the dot com bubble where I lost a lot more than $900.

One other common mistake is to use a high cost "investment advisor" like someone at Edward Jones that is really a salesperson looking to sell you junk just to make money off of you. There are often posts by people that did that for 30+ years only to realize too late how much that cost them.

In addition to the getting started wiki you should also read this "If You Can" PDF booklet by William Bernstein.

https://www.etf.com/docs/IfYouCan.pdf

The Boglehead Guide to Investing book is also good and very readable for someone without a background in investing.

https://www.amazon.com/s?k=Bogleheads&t ... ads.org-20

If you get it from library or a used copy make sure that you get the most recent edition since there have been some updates after the 2008 financial crisis.

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myretirement
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Re: Help - Negative Gold and Silver Portfolio

Post by myretirement » Tue Jan 14, 2020 10:56 am

Thank you all for your replies! I am backing up on buying anything else like stocks right now and just hold gold silver until I am at least in green and sell it! I am looking into a good long term index fund. A while back when I was trying to plan I was going to put in Vanguard total market but I didn’t because of all the scare of crash so thought I stay cash and just get gold and silver but obviously that was a bad move.. So once I get straight I will be going into a long term funds because this honestly is a lot of daily stress! I am a long term but guess sitting on sidelines past year doing nothing sitting in cash! Thought I was doing right but I am a late starter so that’s about it! Again thanks for all your help 🙂

Btw - I am 48 and husband 41.. My job is only one with retirement besides this Roth approx 16k and Bank Savings acct. I do have State pension and this Roth is additional retirement acct.. I also have older profit gain only Valic acct with 12k in 100% interest option fund but I can not touch or move that one.. Mortgage owe approx. 98,000 worth Approx 140,000 depending on market.. Right now homes in neighborhood is getting sales same homes approx. 160k so going low with saying 140k since it needs work!

snailderby
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Re: Help - Negative Gold and Silver Portfolio

Post by snailderby » Tue Jan 14, 2020 11:19 am

myretirement wrote:
Tue Jan 14, 2020 10:56 am
Thank you all for your replies! I am backing up on buying anything else like stocks right now and just hold gold silver until I am at least in green and sell it! I am looking into a good long term index fund. A while back when I was trying to plan I was going to put in Vanguard total market but I didn’t because of all the scare of crash so thought I stay cash and just get gold and silver but obviously that was a bad move.. So once I get straight I will be going into a long term funds because this honestly is a lot of daily stress! I am a long term but guess sitting on sidelines past year doing nothing sitting in cash! Thought I was doing right but I am a late starter so that’s about it! Again thanks for all your help 🙂

Btw - I am 48 and husband 41.. My job is only one with retirement besides this Roth approx 16k and Bank Savings acct. I do have State pension and this Roth is additional retirement acct.. I also have older profit gain only Valic acct with 12k in 100% interest option fund but I can not touch or move that one.. Mortgage owe approx. 98,000 worth Approx 140,000 depending on market.. Right now homes in neighborhood is getting sales same homes approx. 160k so going low with saying 140k since it needs work!
Gold has historically been pretty volatile, actually. After you read a few good books, I'd recommend holding a combination of stocks (via a total market index fund) and bonds, rather than putting everything into one asset class.

pepys
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Re: Help - Negative Gold and Silver Portfolio

Post by pepys » Tue Jan 14, 2020 11:47 am

Gold and silver are very volatile and have very low real long term returns (if any). They could be below your buying price for decades, or way above it in a few days. It's impossible to say. Gold is 30% lower than its inflation adjusted 1980 price and 250% higher than its inflation adjusted 2000 price.

If you would not buy gold/silver at this price, then you probably should not hold it at this price. The losses are a sunk cost and should be ignored for future investing decisions.

Check out the Getting Started page and consider buying broad market index funds with a stocks-to-bonds ratio you are comfortable with.
"Give me enough leverage and a fund on which to place it, and I shall move the world"

Big Jim24
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Re: Help - Negative Gold and Silver Portfolio

Post by Big Jim24 » Tue Jan 14, 2020 12:04 pm

I suggest that you take a look at a chart showing the spot price of gold and silver over the past 30 or 50 years. It is all over the place, and, to me anyways, is nothing like the value of stocks. I have experience with many silver coins of a relative that sat untouched in the garage for 30 years. While they are worth more than they were 30 years ago, the increase in value is a pittance compared to The increase in value if the money had been in even conservative index funds.

I have bought some silver coins of my own recently, but only with a very small amount of my portfolio, and I am doing it just for fun, as a sort of gambling, because I have the luxury of doing so at this time. But I would never put my money in either silver or gold as a long-term investment for money that I will need one day. It’s just not worth it.

I second the advice of others in this thread that taking a loss of $900 may be the best thing you could do for your financial future. I personally think that both gold and silver will go up at some point, but that could be 10 years from now or 20 years from now. Can you wait that long?

minesweep
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Re: Help - Negative Gold and Silver Portfolio

Post by minesweep » Tue Jan 14, 2020 1:20 pm

At Berkshire's 2018 annual meeting, Buffett compared $10,000 invested in stocks and gold in 1942 (the first year he invested in stocks). That money invested in an S&P 500 index fund (there were none at the time, he noted) would've been worth $51 million in 2018 while a gold investment would've been worth only $400,000.
Warren Buffett bashes gold, says the 'magical metal was no match for the American mettle' (BRK.B)

aerosurfer
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Re: Help - Negative Gold and Silver Portfolio

Post by aerosurfer » Tue Jan 14, 2020 1:30 pm

myretirement wrote:
Tue Jan 14, 2020 10:56 am
Thank you all for your replies! I am backing up on buying anything else like stocks right now and just hold gold silver until I am at least in green and sell it! I am looking into a good long term index fund. A while back when I was trying to plan I was going to put in Vanguard total market but I didn’t because of all the scare of crash so thought I stay cash and just get gold and silver but obviously that was a bad move.. So once I get straight I will be going into a long term funds because this honestly is a lot of daily stress! I am a long term but guess sitting on sidelines past year doing nothing sitting in cash! Thought I was doing right but I am a late starter so that’s about it! Again thanks for all your help 🙂

Btw - I am 48 and husband 41.. My job is only one with retirement besides this Roth approx 16k and Bank Savings acct. I do have State pension and this Roth is additional retirement acct.. I also have older profit gain only Valic acct with 12k in 100% interest option fund but I can not touch or move that one.. Mortgage owe approx. 98,000 worth Approx 140,000 depending on market.. Right now homes in neighborhood is getting sales same homes approx. 160k so going low with saying 140k since it needs work!
So you are going to continue to sit on cash until your metals have gone back to even? Then what?

That is a terrible plan. If the markets continue to soar gold my be down for a long time. You would have then, AGAIN, lost 2 times.

Read up on the bogleheads way of indexing. But then waste no time getting invested into better investments. Doing nothing is bad, being reactionary is worse. But get educated on volatility and then set an allocation and quit looking at it.

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Nate79
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Re: Help - Negative Gold and Silver Portfolio

Post by Nate79 » Tue Jan 14, 2020 1:35 pm

DesertDiva wrote:
Tue Jan 14, 2020 8:39 am
Before you do anything else, start here:
https://www.bogleheads.org/wiki/Getting_started
OP, please read this and do not do anything until then.

minesweep
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Re: Help - Negative Gold and Silver Portfolio

Post by minesweep » Tue Jan 14, 2020 1:57 pm

Back in the early 1970’s I began to dabble in the stock market. One of the stocks I purchased was Levitz Furniture. I bought it near the top and proceeded to lose $700 in a short period of time and cashed out. $700 back then was worth a lot more than $900 is today (about 6x’s as much). The store chain had a slogan “You’ll love it at Levitz" (I didn’t). I found out that it’s better to learn from other people’s mistakes rather than your own (it’s a lot less costly). You might want to listen to the experienced folks at this Forum before you do any more dabbling in sectors or individual stocks.

lexor
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Re: Help - Negative Gold and Silver Portfolio

Post by lexor » Tue Jan 14, 2020 5:24 pm

minesweep wrote:
Tue Jan 14, 2020 1:57 pm
Back in the early 1970’s I began to dabble in the stock market. One of the stocks I purchased was Levitz Furniture. I bought it near the top and proceeded to lose $700 in a short period of time and cashed out. $700 back then was worth a lot more than $900 is today (about 6x’s as much). The store chain had a slogan “You’ll love it at Levitz" (I didn’t). I found out that it’s better to learn from other people’s mistakes rather than your own (it’s a lot less costly). You might want to listen to the experienced folks at this Forum before you do any more dabbling in sectors or individual stocks.
+1 consider cutting your losses OP

Blue456
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Re: Help - Negative Gold and Silver Portfolio

Post by Blue456 » Tue Jan 14, 2020 5:41 pm

DesertDiva wrote:
Tue Jan 14, 2020 8:39 am
Before you do anything else, start here:
https://www.bogleheads.org/wiki/Getting_started
+1.

UpperNwGuy
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Re: Help - Negative Gold and Silver Portfolio

Post by UpperNwGuy » Tue Jan 14, 2020 5:52 pm

myretirement wrote:
Tue Jan 14, 2020 10:56 am
I am backing up on buying anything else like stocks right now and just hold gold silver until I am at least in green and sell it!
I don't think you should wait until you are "at least in the green." I think you should sell it now and accept the loss as a lesson learned. Then move on without looking back.

over45
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Re: Help - Negative Gold and Silver Portfolio

Post by over45 » Tue Jan 14, 2020 6:15 pm

I would keep some SLV and GLD because if things go the way some think it might - you will be glad to have it. Better yet is to have something you can hold in your hand and not digits on a computer. Just a little - just in case.

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