Do you buy gold?

[chabooky386]

So with the economy going to poo this year. It is to be said the economy is at it's worst state in over 100 years. I am quite worried that with the value of the dollar at 4 cents sooner or later it will just be paper. So my question to you guys is who is buying gold? Do you buy coins? Do tell and explain.

[JeffreyG]

Gold is currently trading higher than it ever has before and it has been skyrocketing in value over the past 10 years.

So the trend is good, and the value is bad. Either it will keep going or it will collapse.

The best investment you could make right now is to get a hold of a time machine and go back 10 years to buy gold then. And pick up some Google stock at the IPO too.

I love the buy gold ads though...."The price of gold has never been higher, and now is the time to buy!". Uh, maybe now is a good time to buy, but earlier was definitely a better time to buy.

[Tom W]

Buy low, sell high. Gold's a little high right now.

[StMarc]

Gold may be what traders call "oversold," which means it could temporarily correct. I wouldn't be scared of anything less than a 20% correction. If it hits that and keeps going, something has changed, but if I were in that market, I'd buy on the dips. Because the fundamentals for gold are RIDICULOUSLY strong. It hasn't even hit a new inflation-adjusted high yet, and the world economy is in MUCH worse shape now than it was when it hit its last high in 1980.

I personally would buy silver, which is at so many different kinds of comparative historical lows I wouldn't even know where to start. Also, it is much less available than gold and has more industrial uses, which makes it a more flexible investment commodity. And it's a lot cheaper, which enables you to get more bang for your buck (and use leverage more effectively, if you're into that.)

If you do buy gold, I'd either buy investment-level (bullion, options, FSEs, mining stocks, that kind of thing) or small coins. Stockpiling $50 Eagles isn't very efficient at either end of the spectrum. In a real collapse, they'd be too hard to spend. And for investment, the premium is too high.

M

[Eagle]

Sell gold, if you were smart and bought it a few years ago.

I heard that Warren Buffet, Bill Gates and Donald Trump have been investing in the Euro.

[steved110]

So with the economy going to poo this year. It is to be said the economy is at it's worst state in over 100 years. I am quite worried that with the value of the dollar at 4 cents sooner or later it will just be paper. So my question to you guys is who is buying gold? Do you buy coins? Do tell and explain.


I can barely afford to buy glass right now ....let alone gold...:confused:

Actually that's not true, life is good - it's just about priorities.

[ajbalazic]

If you've got any extra money laying around (like we all do!), your best investment in America is the housing market. It's definitely a buyers market, and you can get some real estate for cheap and in 5 years or so, you will make some sweet profit. Nothing beats real estate.

Caveat emptor :)

[oaktree]

A financial adviser said that an ounce of gold has always been worth about a very good suit and a pair of pants. His point was that the value of gold matched inflation but never exceeded it (unlike stocks).

The thing I always wondered was, if I needed to use the gold, can I actually use it in a store to buy food or would I need to sell it to a broker before I can use its value. So, I pay a fee to buy it and I pay a fee to sell it?

I once thought of buying one ounce of gold (about $350 then) as a birthday present to myself, but never did.

[JeffreyG]

The thing I always wondered was, if I needed to use the gold, can I actually use it in a store to buy food or would I need to sell it to a broker before I can use its value. So, I pay a fee to buy it and I pay a fee to sell it?

Yes, if you really want to physically own the gold this is how it works.

As an investment you can simply buy shares in a gold based fund which is simpler to aquire and sell. There is no need to have the lumps of metal sitting around in your possession.

[StMarc]

Sell gold, if you were smart and bought it a few years ago.

All the smart people I know who were saying buy gold five years ago are still saying buy it now. What's changed, in your opinion?

M

[StMarc]

If you've got any extra money laying around (like we all do!), your best investment in America is the housing market. It's definitely a buyers market, and you can get some real estate for cheap and in 5 years or so, you will make some sweet profit. Nothing beats real estate.

Historically, in America real estate just about keeps up with inflation*, except for regional booms caused by localized events. It's only in the last ten years or so that it's been any kind of significant wealth-generator. Now it seems like that decade was, in fact, an anomaly.

Buying real estate because you are going to make money with it (rent it out, develop it) often works. Buying real estate on the expectation that it will just automatically get more valuable, historically speaking, does not work.

M

*Keep in mind that "inflation" is now defined far differently than it used to be: if you use the "regular" definition, real estate still hasn't appreciated that much versus inflation.

[olly_k]

When everyone is talking about an investment then you know it is NOT the time to buy - Never put your eggs into one basket either I think diversification is the key. Gold can be a good hedge against inflation but don't forget you have buyers / sellers fees & tax etc.
As mentioned above it has also sky rocketed in recent times and even the experts can't be entirely sure where it is headed next (although likelihood is up).
Be very careful and don't let greed guide your judgements in fact look at all investments as a hedge against inflation (which is potential on the up big time) and nothing more is what I say!

[StMarc]

A financial adviser said that an ounce of gold has always been worth about a very good suit and a pair of pants. His point was that the value of gold matched inflation but never exceeded it (unlike stocks).

Right. Sometimes stocks go up, sometimes they go down. There have been multi-decade periods in US history where, if you had bought stocks at the beginning, at the end, you would have had less purchasing power than you did to start with. (So much for "invest for the long term.") Gold's purchasing power, historically, has been very stable.

The thing I always wondered was, if I needed to use the gold, can I actually use it in a store to buy food or would I need to sell it to a broker before I can use its value. So, I pay a fee to buy it and I pay a fee to sell it.

That depends on the gold and how you buy it. If you sell it to another person (eBay!) you just pay small or no transaction costs. If you sell it to a broker, yes, there's more overhead, just like buying or selling a car or a house. The more people who are involved, the more people who need a cut.

If you buy US Eagles (which come in Platinum, Gold, and Silver,) they have a face value as currency, below which they cannot go in value. You could, theoretically, spend them as coinage if you wanted. This would be pretty silly, but if you're really worried about ease of spending, that's your answer. You could also buy what dealers call "junk silver," which is US silver coinage minted prior to 1965. All dimes, quarters, half-dollars and dollar coins of that vintage are mostly composed of silver, and if you want, you can spend them like any other coin at any time.

M

[StMarc]

As an investment you can simply buy shares in a gold based fund which is simpler to aquire and sell. There is no need to have the lumps of metal sitting around in your possession.

You can also leverage gold prices by buying stock in gold-mining companies. If you're just betting that the price of gold is going up, this or options trading is your best bet.

M