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View Full Version : Anyone know anything about investing in precious metals



dennis thompson
11-18-2009, 10:48 AM
I spend a fair amount of time researching investments in mutual funds, stocks & bonds. When you look at a fund or stock there are at least some ways to analyze it,i.e. sales, profits, cash flow, return on investment etc.Earlier this year, based on very little knowledge or analysis, I invested in a "precious metals" fund which has done pretty well. I'm now tempted to look at gold or silver, anyone have any thoughts or experience here?
Thanks
Dennis

David G Baker
11-18-2009, 11:03 AM
My thought would be to buy precious metals when they are reasonably priced and wait for the price to sky rocket like it is now to sell. I think precious metals are priced way to high to make them a reasonable investment at this time. Keep a close eye on your fund and watch for indicators that it is on the way down.
One of the indicators that I have found to be fairly accurate on metals is when there is a major military action starting the price of metals generally rise quite a bit.
These are my thoughts and are not based on experience.

Mitchell Andrus
11-18-2009, 12:01 PM
Every time I buy gold or silver, my investment is rewarded with warm hugs and kisses.

Gene Howe
11-18-2009, 12:13 PM
We buy gold coins. Not as an investment, but as insurance.

Paul Atkins
11-18-2009, 12:46 PM
Does old cast iron count?

Bob Vavricka
11-18-2009, 1:17 PM
If you do decide to invest in precious metals, I would limit the amount of your portfolio that you invest. I agree with David and think I may have missed the opportunity in precious metals at this time and I would not be willing to invest any money in them right now. I think the downside possibility is too great. Of course, "Past performance is no guarantee........" Good luck on your decision.
Bob V.

Eddie Watkins
11-18-2009, 1:39 PM
I have been buying gold for quite some time now and still don't know much. I believe it can be manipulated so you need to understand there is some risk involved.
To buy actual coins or bullion there are several companies that sell and buy it and they all charge different commissions so I would recommend you look around to find the cheapest price. I buy thru an online company. All sell it at the going rate plus a fee. I believe I paid $35 per coin when I bought the last gold coins I purchased. Just checked and they are charging $49/ coin now. Lately I have been buying an exchange traded fund(ETF) called GLD which represents actual gold purchases. I have chosen this because the commissions are cheaper. I have looked at another called GDX which is more diversified and includes mining companies and other gold activity companies. I have found predictions of gold going as high as $5,000/oz to as low as $1,650/oz.
I in no way am making any recommendation just giving you a starting point to research.

Brian Kent
11-18-2009, 1:52 PM
Here's all I know.

If you bought $14,000 worth of stocks 2 years ago they would be worth $10,400 today.

If you bought $14,000 worth of bronze Lie-Nielsen planes two years ago you could sell them used for about $13,000 today.

Meanwhile, you got to use $14,000 worth of bronze Lie-Nielsen planes.

That's all I know about buying precious metals.

Brian

(ps. I bought $0 worth of Lie-Nielsen hand planes two years ago and have not lost a penny on my investment.)

Jerome Hanby
11-18-2009, 2:06 PM
I think the person that mentioned precious metals as insurance has the right idea. If you are prospecting and find a load of gold, silver or whatever then you just made money. If you buy gold or silver and then sell it at a later time, you are going to be able to get pretty close to the same spending power back as you expended. Selling gold at three times what you paid for it when the currency you are receiving is only worth a third of what it was when you made the original purchase is just treading water. If you had put that money in a coffee can for the same amount of time, then you have lost spending power.

Now if you have a good hunch that some idiot is going to try and corner the market on silver...:D

Pat Germain
11-18-2009, 6:55 PM
We buy gold coins. Not as an investment, but as insurance.

Insurance for what?

I know some people are buying gold to prepare for an economic apocolypse. But if things get so bad that the US dollar no longer has any value, gold will also be worthless. Food and energy will have value.

As for buying gold as an investment, I agree with David. Nobody can predict the gold market, but with prices at record highs, now would not be the time to buy.

Mitchell Andrus
11-18-2009, 9:25 PM
Pat, I've always liked your sig. Here's another similar:

You can't get 9 women to make a baby in 1 month.

.

Brian Ashton
11-18-2009, 11:22 PM
Insurance for what?

I know some people are buying gold to prepare for an economic apocolypse. But if things get so bad that the US dollar no longer has any value, gold will also be worthless. Food and energy will have value.

As for buying gold as an investment, I agree with David. Nobody can predict the gold market, but with prices at record highs, now would not be the time to buy.

Gold is a traditional hedge against inflation. The value of a dollar today will be less in the future no matter what. I think it's called the time value of money. Where as a dollar of gold today will be worth a dollars worth of gold in the future. If times are going well that might be slightly less than today but not by much, most likely it will at least keep pace with inflation.

Josh Reet
11-18-2009, 11:44 PM
Insurance for what?

I know some people are buying gold to prepare for an economic apocolypse. But if things get so bad that the US dollar no longer has any value, gold will also be worthless. Food and energy will have value.


That's why I'm thinking of investing in micro-hydro generators and twinkies. I will rule the earth if the CHUDS don't get me.

Bob Smalser
11-19-2009, 12:06 AM
.... buy precious metals when they are reasonably priced and wait for the price to sky rocket like it is now to sell. I think precious metals are priced way to high to make them a reasonable investment at this time....

There are no shortage of us still around who remember the last time post-crash interest rates rose to above 18%, inflation became rampant, and gold/silver went thru the roof. Fortunately at the time (late 70's) I had a young family, worked two jobs to make ends meet, and didn't have much to invest. A few observations from an old Plankowner who already has the T-shirt:

1) When those who sell precious metals and derivatives like gold mining stocks have enough loose change to saturate the airwaves with tales of further impending disaster and promises of profit.....it's already way, way past the time to buy.

2) What goes up fast, can and does go down faster. The economy will recover. Wait for it to.

3) I remember a couple of working friends who got so hooked after making a modest profit on a couple bags of silver coins, they even got into metal-related commodity futures....and lost their houses to margin calls when the Dow recovered and silver crashed.

4) The Saturday morning stock pickers all have an agenda that doesn't include your best interests...except as patsies for the Dow-Jones version of Observation #1. They are selling shortly after you are buying. Unless you love stocks enough to become a real expert in options, selling short and doing the research yourself, stick with index and mutual funds. I never got into bonds and can't help you there.

Now is the time to sit tight, even though your capital isn't drawing any interest. The stock market may well make a another deep dip before really recovering. If you absolutely, positively have to buy something, then look into all the "fire sales" going on right now in commercial real estate, residential housing and undeveloped land. Mortgage rates remain cheap. And even when they rise, there will be no shortage of desperate sellers who will finance you just to have some income. The long, ugly Jimmie Carter economy is how I became a minor timber baron today.

Josh Reet
11-19-2009, 12:48 AM
If you absolutely, positively have to buy something, then look into all the "fire sales" going on right now in commercial real estate, residential housing and undeveloped land.

If I weren't making jokes about CHUDS, this is exactly the advice I would give someone asking what to invest in. Metals are over extended in my opinion. Metals futures are for lunatics (as are futures of any sort).

Frank Drew
11-19-2009, 6:24 PM
I have found predictions of gold going as high as $5,000/oz to as low as $1,650/oz.


I don't know anything about buying gold (and maybe that was just a typo), but isn't the current price below $1200/oz.?

Pat Germain
11-19-2009, 6:47 PM
Pat, I've always liked your sig. Here's another similar:

You can't get 9 women to make a baby in 1 month.

.

Thanks, Mitchell. My former boss was a feisty, British woman who wouldn't back down when the managers demanded we push out the latest software build when it wasn't ready. They would say, "We'll give you some more people". She would say, "One woman, one baby, 9 months."

As for investments, many of my coworkers were bailing out of their mutual funds last year. They said, "I just want it to stop going down!". I sat tight. Now my investment is back to what it was before the downturn. And it's still going up. There no way my coworkers could have timed it right to jump back into their funds.

Outside of mutual funds, I think it makes sense to invest in a company you know well. I grew up around the Walt Disney Company and I'm very familiar with it. I bought Disney back in 2002. Even with all the market turmoil, it's now up over $6.00 from where I bought it.