Buying Gold / Silver / Precious Metals

[Acein8ter]

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Wow..cannot believe this.

Why would you rather purchase metals then invest in stocks?

Golds going up, but not faster then any guaranteed investment.


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lol

[lambdb]

http://gold.seekingalpha.com/article/9381

[gull]

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Wow..cannot believe this.

Why would you rather purchase metals then invest in stocks?

Golds going up, but not faster then any guaranteed investment.


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lol

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Your graph is <u>extremely misleading</u>. Dividend returns of the S&amp;P 500 are not included. You absolutely cannot imply that equity investors would be even just because the dollar value of the index is at the same level as 2000.

What is the point of this graph?

Is your point that you believe an exploitable, long-term momentum effect now exists in commodities that has not manifested itself before? Is your point that this run up in gold prices is somehow fundamentally different than any other gold bull, and implies real growth in assets? Is your point that although the price of gold (IN DOLLARS), has more than doubled, it is still undervalued? Is your point that gold is a better investment than equities because of its role as a hedge; and are you therefore predicting a bear market, something no one has ever been able to do with certain accuracy?

Please explain what you mean by "lol." It does not convince me, and I sincerely hope it does not convince others.

[Tater10]

I've suggested this before on these boards: If you are looking to invest 50-100k in gold, you could invest in the mini contracts at the BOT. 33.2 oz contracts.

With gold ~690oz, you could buy 2 contracts worth $45k. You would need about $1800 in margin, which you cover with a 5k-$10k t-bill earning interest. Take the remaingin $40k and put it into a vanguard MM.

Bid/ask is super tight. If you roll with spread orders, you will basically only pay commission on rolls.

Keep in mind that since you are earning interest and don't have to pay to store/insure your gold, you will pay a premium equal to that amount.

I've never dealt with taking delivery, but that is always an option.

Same thing with silver, they have 1000oz contracts, ~$14k per.

[Jeff W]

It's too bad the Vanguard Precious Metals &amp; Mining Fund is closed to new investors.

[Acein8ter]

Regarding the chart:

A $10,000 investment: your returns with gold and stocks

Had you invested $10,000 in gold bullion in 1999, your initial investment would have grown to $22,205 by 06/30/06 – a 122% percent increase.

That same $10,000 investment in stocks of the S &amp; P index would have netted $10,162. That’s a 1.162% increase.

Lamb mentioned: Why would you rather purchase metals then invest in stocks?

I just pointed out that Gold (And other metals) has done resonably well compared to stocks over the last few years. He asked 'Why purchase metals rather than stocks...

[Jeff W]

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I just pointed out that Gold (And other metals) has done resonably well compared to stocks over the last few years. He asked 'Why purchase metals rather than stocks...

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The Dow is a [censored] benchmark, but it probably understates the appreciation of stocks relative to gold.

Gold/Precious Metals are only appropriate in small quantity as a diversifier(if at all) for aggressive investors. You better be damn good if you want to speculate on the direction of gold prices.

[scrilla]

The main reason most people want to purchase actual metals (not mining stocks etc) is because its a lot easier to hide 100k in gold bars or coins from the government and other prying eyes than it is to hide a 100k stock portfolio...

Just my thoughts...
Scrilla

[Tater10]

Adding non-correlated assets to a portfolio can decrease the risk/return ratio. There is a greater than a 0% chance that we will wake up one day with Dow ~5,500 and gold ~$1,300. You don't have to predict prices of stocks or gold, just prepare.

[Jeff W]

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Adding non-correlated assets to a portfolio can decrease the risk/return ratio.

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As I said:

"Gold/Precious Metals are only appropriate in small quantity as a diversifier(if at all)"