Gold? The bubble will burst just like the techs, banks, real-estate, etc...

You're better off investing long term and not jumping on any bandwagon.

Greetings!

quote:

Originally posted by KWKSLVR:

Food for thought:
$1 invested in bonds in 1801 = $13,975 today
$1 invested in stocks in 1801 = $8.8 million today
$1 invested in gold in 1801 = $14 today.

Gold is not a long term investment.

I don't know where you get your numbers.
In 1801, a $5 gold piece weighed .281 troy oz. and was 0.917 pure gold content. So, $1 worth of gold in 1801 would be 0.0562 troy ounces, multiplying by purity = 0.0515 Ozt of pure gold. That, multiplied by today's spot price of $1,038 per ounce gives a total value of $53.49 - WAY off from your stated $14 value. And, that doesn't count the numismatic value of such a coin - which can reach into the thousands easily depending on condition.

I wonder how your other 2 figures would hold up to similar scrutiny.

Regardless, your entire premise of investing in 1801 (as if anyone could live that long!) is a silly mental exercise... a more revealing tale is told when using a 40 or 50 year time frame of investment (which is why I picked 1960 as my start date on the 2 page 1 charts). Unless you buy during an anomalous peak (like 1980-81), gold holds it's own as an investment - PARTICULARLY this last few years when financial upheaval is taking place.

Best wishes,
Bawko

quote:

Originally posted by operator81:
How bout any other solid investments?
We're not looking for huge returns so much as long term stability.

Note the statement which I bolded.
It is a request for a "store of value"
not something risky with great returns or great losses.

The above is an argument for Silver or maybe Gold if you really believe it will at least hold its value.

Another store of value is a 5000 gallon tank of propane or stabilized motor fuel.
But Silver or Gold is a helluva lot more convenient to buy and especially to take along on a move.

Gold is a junk investment. The only reason gold is so popular is because of its short term volatility... but that's not investing; that's speculation. Why would you invest in anything that's at an all time high and paces inflation (before taxes) over the long haul? The stock market has averaged 12% growth per year for the last 70+ years and 97% of mutual funds make money over a 5 year period.

Gold is just another crap product for fear mongers. Buy some and ride the bubble, but if you really think society is going to collapse or the dollar will be worthless, pay off your house early and invest in beans, bullets and bandaids -- something with real value.

If you still want to invest in junk products which will not make you money, add some variable annuities to your portfolio too. It's amazing how many "sophisticated" day traders and "educated" gold buyers are out there buying this crap, yet carry credit card and car debt at the same time.

I prefer low expense index funds from Vanguard. Read a book or two by John Bogle.

quote:

Originally posted by Solitar:

quote:

Originally posted by operator81:
How bout any other solid investments?
We're not looking for huge returns so much as long term stability.

Note the statement which I bolded.
It is a request for a "store of value"
not something risky with great returns or great losses.

The above is an argument for Silver or maybe Gold if you really believe it will at least hold its value.

Another store of value is a 5000 gallon tank of propane or stabilized motor fuel.
But Silver or Gold is a helluva lot more convenient to buy and especially to take along on a move.

Thanks for all the info guys. And yes, as stated above, my wife and I are not looking for a quick return so much as we are an insurance policy. I have no doubt that we will see the US dollar go tits up within the next few years and it would be nice to have something other than paper to hold on to. I've never been big in playing the stock market, all that confuses me, but gold seemed simple enough.

I plan on getting a financial adviser to help me diversify but I don't want the bulk of my investments to be a number on a piece of paper, I'd rather have something physical I can hold in my hand.

Your too late.
Most people wait till the wagon is in full stride and try to hop on.They all get there ass handed to them later.
Have enough confidence in yourself to buy into something early that isn't touted on tv commercials or the internet

IMO it is not too late for Silver because it is, IMO, undervalued by at least half of what it should be compared to Gold. Either Gold is overvalued by at least double, or Silver is undervalued -- and my bet is on the latter.

IMO brass and lead are also great stores of value, but several thousand dollars worth is a helluva lot more than one can hold in one's hand.

quote:

Originally posted by mrapp:
Gold is a junk investment. The only reason gold is so popular is because of its short term volatility... but that's not investing; that's speculation. Why would you invest in anything that's at an all time high and paces inflation (before taxes) over the long haul? The stock market has averaged 12% growth per year for the last 70+ years and 97% of mutual funds make money over a 5 year period.

Gold is just another crap product for fear mongers. Buy some and ride the bubble, but if you really think society is going to collapse or the dollar will be worthless, pay off your house early and invest in beans, bullets and bandaids -- something with real value.

If you still want to invest in junk products which will not make you money, add some variable annuities to your portfolio too. It's amazing how many "sophisticated" day traders and "educated" gold buyers are out there buying this crap, yet carry credit card and car debt at the same time.

Mitch, I tend to agree with your assessment. I believe it is the speculation aspect that intrigues so many.

Really? How do you have "no doubt that the dollar will go tits up"? Based on what facts?

People forget 2 things with their investments. 1) Inflation 2) Taxes and that long term investing wins. The point of my earlier example (and your wrong on your figures) is that anyone can take a time period to "prove" why X is superior over Y. Why do you think you hear things like, "over the past 5 years gold is at an all time high". An all time high compared to what? No one retires off of short term investments. Short term volatile investments do not create steady income. The stability of the price of bottled water is superior to the price of .380 the past two years. What's your point?

Let's say you choose not to invest long term and take an 11% return over the 40-50 some odd years of your investing life, and instead decide to speculate (gamble). Day traders/short term investors of ______ average a 7% rate of return over that same investing life of 40-50 years.

Let's back up even further. Let's say the economy does collapse, completely. Society is a nuclear bomb. Now, let's also totally ignore that NO failed economy in modern, or even recent history has used gold as the medium of exchange, not even Argentina when they really did go tits up - toss all that out. What are you going to do with gold? Those people that had gold bars in Argentina, did it save them? Did it buy them food, clothing, shelter, protection? Did companies pay their employees in gold bars?

Ok, let's say you have your gold in precious metals funds. How are you going to access it if everything collapses? The infrastructure is dead and gone. Let's say you have your gold in gold bars in your gun safe and SHTF. Your gold bars are worthless to me and everyone else in the United States. Like the user above said, give me beans, bullets and band-aids (or land). But that doesn't mean that gold doesn't have value elsewhere in another country. However, how are you going to exchange your gold for another country's currency? How are you going to get to them with your physical assets? Once you have that currency then what? It's still useless here. Where are you going to go? How do you know another country will even let you in?

If your vested in Mutual Fund XYZ that has Wal-Mart, Ford, GE, etc in it and those companies go belly up, why do you think said fund manager wouldn't have been moving those assets to other places long before they go under for the stability of the fund? Say the dollar does die, what makes you think that existing value wouldn't be transferred somewhere else overseas (other holdings) before so? How many people have lost EVERYTHING in mutual funds? (Please don't make me answer that).

My point is that if your investing gold as a way to save yourself because you believe there is impending doom coming, then it's a bad investment. If your investing in gold because you think it's a great long term investment, then your flat out wrong and there are better places to put your money (Many International Funds are far less volatile than gold). If you are investing in gold as a day trader, well, then more power to you. Statistically you're doing a lot of work for far less return in the long run.

Just because an investment exists doesn't mean that it's a good one. Whole Life Insurance Agents will convince you that it's a good product but that doesn't make it true. Salesmen SELL.

quote:

"no doubt that the dollar will go tits up"?

Oh it will go tits up one day,right about the time a piece of bread will buy a bag of gold

quote:

Originally posted by mark123:

quote:

Originally posted by widge:
Strangely enough it seems to me, the 'people' (read TV and radio 'experts') telling everyone to buy or invest in gold, silver, or other precious metals, seem to be the same 'people' who are selling said items.

What a coincidence.

Exactly. ..., if Gold is as great as these folks tout it to be, and cash is not a good security, then why do they accept CASH in exchange for it?

The only people who are going to make money off of gold are the ones selling it to the idiots who are buying it.

quote:

Originally posted by Atomic Chicken:

quote:

Originally posted by KWKSLVR:
ROFL!!! Yeah man, if you want to "invest" in an inflation matching product that resembles the snuggie of the investing world, go for it. Or, if you had put money in the market (or left it alone in the market) you probably would have enjoyed the near 40% rate of return the rest of us are. Gold does not TOUCH the stock market in long term rate of return since inception and historically day traders make about 7% rate of return all said and done. Slow and steady wins the race. The sky is not falling, and any fear based decision with money is a dumb one.

Greetings!

Dumb one? Make sure YOU are not the dumb one!

Inflation adjusted stock market vs. gold:

http://home.earthlink.net/~int...tbear/dj-lt-infl.gif

http://www.inflationdata.com/i...d/Gold_inflation.gif

Excluding the Gold chart anomaly at the beginning of the 80's (due to the hunt brothers attempts to corner the silver market, which is GOLD POSITIVE anyway) I see stocks yielding the SAME value from 1960 to the present (with a few brief peaks of almost 200% gain), while the nominal Gold price increases over 1,000%

AND YOU HAVEN'T SEEN ANYTHING YET...

As for the 401K post... I won't even dignify it with much of a response, other than to laugh hysterically at the clowns who think this kind of thing is anything other than a scam of the highest order.

WAKE UP... Gold IS money... your paper currency and paper promises are WORTHLESS!!!!!

Best wishes,
Bawko

P.S. The sky IS falling, regardless of how dearly you want to believe otherwise.

Nice job using BS data to make your BS point. Your first chart uses the DJIA, which is and always has been a flawed index for looking at the broad US stock market. One of the many reasons is it is comprised of only 30 companies. Further your data does NOT include dividends. Many companies do pay dividends, and companies typically included in the DJIA usually pay dividends. Dividends have a huge influence on total return, both on the DJIA and more importantly on the better indexes that take a more comprehensive measurement of the broad US stock market performance.

However, if you examine the long term performance of the broad US stock market using a more realistic index, such as the Wilshire 5000 or the MSCI US Broad Market Index, the US stock market has an excellent track record of providing a total return well above the rate of inflation. There has never been a 20 year period of negative return in the US stock market. ( http://troweprice.texterity.com/troweprice/200812/ ). The average total return for the US stock market is approximately 11% from 1926 to 1999, which includes the worst decline in stock performance history from 1929 to 1936.

However, the performance of gold over the long term does not come close to keeping up with inflation, as your own data shows.

For more info on this topic you may want to read these threads:

http://sigforum.com/eve/forums...1935/m/165101961/p/1

http://sigforum.com/eve/forums...1935/m/778105261/p/1

http://sigforum.com/eve/forums...1935/m/550101161/p/1

http://sigforum.com/eve/forums...1935/m/772107221/p/1

This post in particular sums up my thoughts on the people pushing gold right now:

http://sigforum.com/eve/forums...=611108561#611108561

quote:

I'll be blunt.

There is only one reason a rational person aggressively advocates buying a commodity at a record high, when that commodity traditionally drops drastically in price following a rapid run up to a peak in nominal price, and especially when talking about a commodity that performs horribly when inflation is taken into consideration. That one reason is the person has already invested in that commodity and needs to artificially inflate the price to turn a greater profit.

You see if a person truly believed that the commodity price would be driven higher by normal market forces, rather than needing to be artificially driven to higher prices, they would want to continue buying at the lower prices and wait for the normal market forces to drive up the price. Pushing others to buy that commodity will only drive up the price and reduce their window to buy low(er) than the eventual price peak. So if a person honestly believed the market would drive up the price they would rather quietly continue to buy low(er) before the market drove up the price.

This is all especially true for gold which has historically seen a significant decline in price following a rapid run up to a new peak in nominal price.

For those that have ignored the data repeatedly, here it is again:

http://www.nma.org/pdf/gold/his_gold_prices.pdf

Look at the 1980 peak, it was $615/ounce. Within a year the gold price topped out at $376/ounce, which was a DECLINE of 39%. It was 26 years before gold got back above $600 an ounce.

I seriously question the motives of anyone advocating a large shift into gold at these record high prices.

Remember you want to buy low and sell high. It's difficult to make a rational argument that the price of gold is "low."

Well said DMF. I thought Gold paid quarterly dividends!?!?!?!?!?

Can't blame a guy for using the charts that his gold broker gives him.

Well said to you too, on both your posts on this thread, and previous threads on this subject.

Good job on being one of the voices of reason on this topic.

Very nice from the other thread:

quote:

Originally posted by DMF:
I'll be blunt.

There is only one reason a rational person aggressively advocates buying a commodity at a record high, when that commodity traditionally drops drastically in price following a rapid run up to a peak in nominal price, and especially when talking about a commodity that performs horribly when inflation is taken into consideration. That one reason is the person has already invested in that commodity and needs to artificially inflate the price to turn a greater profit.

You see if a person truly believed that the commodity price would be driven higher by normal market forces, rather than needing to be artificially driven to higher prices, they would want to continue buying at the lower prices and wait for the normal market forces to drive up the price. Pushing others to buy that commodity will only drive up the price and reduce their window to buy low(er) than the eventual price peak. So if a person honestly believed the market would drive up the price they would rather quietly continue to buy low(er) before the market drove up the price.

This is all especially true for gold which has historically seen a significant decline in price following a rapid run up to a new peak in nominal price.

For those that have ignored the data repeatedly, here it is again:

http://www.nma.org/pdf/gold/his_gold_prices.pdf

Look at the 1980 peak, it was $615/ounce. Within a year the gold price topped out at $376/ounce, which was a DECLINE of 39%. It was 26 years before gold got back above $600 an ounce.

I seriously question the motives of anyone advocating a large shift into gold at these record high prices.

Remember you want to buy low and sell high. It's difficult to make a rational argument that the price of gold is "low."

A little fuel for the fire. Gold Confiscation.

http://news.goldseek.com/GoldSeek/1143389040.php

Not unless I mined it myself, and then I want a bunch of it.