Haven't seen a good lively debate on here in a while. Coins, bullion, and other precious metals; are they investments or only for TRH?

I got interested in coin collecting for a while. It was interesting how you could buy a coin as MS63 from a dealer, and six months later when you wanted to trade it in it was MS60

Now they have the automated grading systems that presumably make grading more objective. And seal the coin in a holder so you can't handle and enjoy it

The St. Gaudens double eagles, Morgan dollars, and Liberty themed US coins are beautiful designs, but I take them as a grain of salt as investments. Ditto other forms of precious metals. You might do okay occasionally but in the long run I think stocks average better.

Brass and lead always a good investment.

Either one has the potential to make money or loose it. Like anything you need to buy low and sell high. I don't personally see either as a good investment because it carries too much risk and volatility.

I have a little of both but just to use to get out of the country if the SHTF.

Not as a buy and hold kind of investment; you're much better putting your money in an index mutual fund if you're looking for long term investment.

For short term the volatility of Gold is attractive, quick money can be made.

I still buy silver with the idea my kids will benefit years from now.
Don't buy much, maybe 10 oz a month.
Started buying a few years ago when it was around $33 an oz, now it hangs around 1/2 that.
To me the little I buy is better than the 1/2% I get from my CU.
Besides, it just feels good to see and touch pure silver.

I bought a bunch of silver when it was under $4 an ounce.

I sold a bunch of silver when it was $43 an ounce.

for me they're neither


just insurance, with a one time premium


don't know if it will happen in my lifetime or not, but there's some serious problems with the US$, it's backed by the full faith and credit of the US gov't......bwahahahaha

currently the world sees the US$ as King in a resplendent robe

but the bastard is running around in tatters damned near naked, it's just his neighbors have worse clothing as hard as that is to believe.


someday, some kid is going to point out the obvious, the king is naked or in tatters


whether it's me or my kids, probably be glad to have some pm's then.

Certainly not for me.

I consider gold a hedge. I have thought about buying 30 oz. of double eagles and leaving it for my three children as part of their inheritance. I think they or their children will need it befor I will.

If you want exposure to precious metals mining without outright dependency, consider Caterpillar, which seems like a bargain right now that I'll be increasing my position in soon. Solid dividend too.

Gold is a commodity and rises and falls on speculation; it's a losers game. Just recall the hunt brothers 30 years ago with silver.

Recall a member on here about 5-6 years ago. Talked his parents into putting their life savings of over $100k into gold at over $1800 an ounce. It's currently $1195. Gold pays no interest, no dividends and is difficult to sell. Looks like he screwed his parents and his inheritance.

I invest in stocks and average 12% for the past 30 years. No gold or silver for me.

Gold and silver throughout history have been considered money.
Only liberals and Keynesian economic wako's consider it a commodity.
The dollars value is based on perception.
Easy to print federal reserve notes, not so easy to make gold/silver.

Gold will do well when the SHTF.
Until then it's basically just another highly manipulated commodity; which is not to say you shouldn't speculate if you like...

Here't the thing about gold:

http://research.stlouisfed.org/fred2/graph/?g=V0Z

You get the occasional blip in price, but it may remain flat for 20 years.

exactly and those blips only occur when there's a great degree of uncertainty


and since we live in such a certain world, you're apt to be remiss to own any

What is uncertain?

Maybe the government borrowing, umm, I mean printing 40cents on every dollar they spend?
What could possibly go wrong?

To all who have interest,

Some thoughts, short version:

Money can be made or lost in gold, oil,stocks etc. I know for a fact that money can be made in the gold markets. Developing an understanding of the particular market itself is crucial. Like everything, you do better if you buy low and sell high.

For example, one might say that oil has been manipulated downward as Obama and the Saudis make life difficult for Putin. Since oil is down now and oil stocks have suffered, one might consider oil stock like Chevron, down 16% for the year but likely to be up if the depression of oil prices lasts only a year or so. Chevron is a better buy now than it was a month ago when it was 11% or so higher. Pays a 4% dividend as well.

The point is, one must understand the why and when of buying or selling. Steelhead made this point very simply.

Trading the markets can be done successfully if you watch and wait for market distortions... like we have in oil now... at least I think so. An understanding of time frame is crucial... do I expect a return in a few months? A year? A decade?

There was a market distortion in the late 80's and most of the 90's in the gold market. Some of you may remember when Britain was selling it's Central Bank gold reserves. Gold was clearly manipulated lower and Central Bank selling was brutal. Gold was selling at or below the cost of production. It was simply a great buy at the time. Some of us saw this and bought... then bought some more.... then more... and held until the distortion ended and the gold price rose.

Buy gold at $1800? Not a chance. Buy gold at $1200? maybe a little but only if one is able to hold it as "insurance" ... Buy gold at $900 - $1000... yep, back up the truck and load it up. The time horizon for a 2014/2016 gold buyer must be at least three years... Buy it and hold it until the next distortion up.

I like the idea of going into oil stocks now for a 1-3 year hold. Oil historically trades in a range from 9 to 20 barrels of oil per ounce. Seems to average about 14 or so. Today that ratio is 21 or so. Something wrong, a distortion is occurring right now. My sense that if oil does not go back up soon, gold will tumble.

Anyway, there you have some thoughts. Do what you think is best.

TF

Oh btw... I think if one is going to go into precious metals, a very significant percentage should be in silver and maybe platinum.

I like your general idea. I don't think oil's bottomed quite yet, but it's creating a nice opportunity.

I've been buying XOM at $100 per month through a DRIP for over 35 years and have accumulated a nice position in oil as a result.

I agree that now is the time to be buying oil and the drillers.

Also been buying HSY and have been doing quite well with chocolate of all things.

If so, that would make you one of the world's great money managers!

No interest in gold/silver here. Am currently expanding my position in oil/gas stocks. I could care less if I catch the bottom.

Scored good on Kinder Morgan Partners this last year. They just restructured and gave me shares of KMI and cash in exchange for my shares. Really no interest in selling, and I'll let my investment ride for a few decades to see what they can make happen.

Star Gas was also very kind to me. I love oil/gas stocks.

Not really! I have very little cash, just what I need to live on. Investing is quite a long term effort for me. 12% return is quite average, most successful professional investors average 30% or more. I invest only in dividend paying stocks. Some oil and gas pipeline stocks pay dividends of 8%, so investing those dividends along with investment of short and long term capital gains in a DRIP that's inside a 401(k) can get very nice gains with no taxes.

love dividend checks from good companies

and what's not certain? the world we live in, it's what makes it interesting.

12% is fantastic over 30 years in my book Ed, nicely done


stocks have been the best ROI of any investment (well sans our own businesses, those have done very well for us)

RE we own is only about 6.5% ROI for us

and while I have no interest in gold/silver currently, I'm still glad to have bought some financial insurance when it was a bargain basement deal. Just gives me the warm fuzzies along with some cash reserves, .22 ammo, good supply of food and a hidey hole we recreate at.

tis what I love about America, you buy the hunting gear that makes you happy and invest and insure the same way.


wish everyone well in making a buck, this life has been so good to us.

It's a really cool system we have set up. Sitting up here in tiny town AK I can buy shares in offshore drilling companies, pipeline companies, buy bonds for the NJ turnpike, etc.. Love it. The internet puts all the info you need a few keystrokes away.

oh Calvin you have no idea, I'm an old phart, used to have to subscribe to investment periodicals and newsletters and I remember when we got Monday night football on Tuesday here after they flew up the game tape! lol, the good old days

now with the touch of a few keystrokes, we have more and better info available to us than most of the guys on Wall St. did a few years ago.

just one of many ways puters have changed our lives

Ed, I am a professional and have been for a long time, but I am trader. Most professional money managers who are running retirement money do not average 30% a year. Do some research please. Most are not able to even beat index funds (the market), which last time I looked averaged about 8% a year over the LONG term. They have a good year here and there sure, but I assure you, it is a very rare bird that averages 12% for 30 years. That is simply extraordinary in the conservative retirement investing world. If you could prove that record, Goldman Sachs would be beating down your door with job offers.

OK. You keep buying gold.

Ed, in a nice, polite way he is telling you that your supposed return rate is BS. I agree.

Even Ramsey says 12%..

That makes great sense to me. In case anyone didn't notice, we are in a currency war at the moment. As the outcome depends on politics, nobody really know how it will turn out -- especially with the USG so screwed up.

IMO, two things are clear. Gold and silver are good as a hedge and in case of a major disaster. (Some other collectibles are rock solid for appreciation but not for insurance like them.) Most say stick to well below 15%, though.

Second, in all the world, the US is the one place to invest, for reasons we can discuss. Every place else is more risky. There are very good reasons why profits might be higher elsewhere. That is my own strategy and advice to others.

Just wanted to say thanks to for everyone's input. As I continue learning about this, I find such discussions interesting.

I like silver and gold. I started buying back in 2008 when silver was in the $9-$11 range. I cut back on buying when it made its rise and only bought a few limited run things. A few weeks ago when it hit under $15 one Sunday night I put in my first decent sized order in the last 5 years. I just look at it as insurance and something I enjoy.

Most of my spare change the last few years has been spent on rental homes. I purchased 4 while prices were down and rates were good. I need to do a bit more with stocks I just worry that the stock market is the next bubble to break. All that money that's being printed looks like it's going right into the market. I have a decent 401 that I just parked in a money market account. I hate being on the sidelines but I think low oil prices might make Russia or Iran do something stupid.

Bb

Everyone who follows the news knows that OPEC strong-armed its weaker members to play along with the lower prices and high production to hurt US fracking over the short term.

It will, but it is hurting those weaker members more. The US has plenty of frackers with low cost of capital. Sure, some are hurting but the strategy likely will fail. We'll see what happens then.