I have some bullion for emergencies, and I’ll probably get some more.

I realize the S&P 500 gives a much better long term return - and I plan to set up “my” version of it, minus the companies I wouldn’t buy into. (I like my Tesla car, and I think they have lots of potential, but their valuation is absurd.)

As a pure inflation hedge, is there’s real downside?

I get that it won’t help if DC seizes it - er, except the ones I know of do not store bullion in the US.

Seriously, what are you going to do with bullion? Take a piece of it to Kroger for steak?

Gold is a hedge, which simply means not subject to inflation. For example, a 20 dollar gold piece in 1918 would buy a suit. A coin of the same weight today would buy a suit. It does not increase or decrease in value and, regardless of what the hucksters say, is only worth what someone will give you for it. With physical gold, however, you at least have something pretty to look at. EFT's are not.

I would say no to EFT's, and look for nice index fund.

quote:

Originally posted by Aglifter:
I have some bullion for emergencies

I have bullets for the same reason and I'll wager that they will be better barter items if all falls apart, than gold. Plus, you can't shoot gold coins or ingots at looters.

To be fair, "emergency" doesn't necessarily mean "the end of civilization, for use as barter for food/medicine".

"Emergency" could also mean something like "an extended period of unemployment or a large amount of unexpected medical bills, in the midst of an economic slump". Or "a national economic depression coupled with rampant inflation".

As a hedge against inflation, there are a number of situations in which bullion would hold its value over time better than the dollars sitting in your safe or the numbers in your bank account, and could be sold if needed to provide you a cushion during your financial emergency. And it could potentially be a better choice to sell off first to access the needed funds than something like stocks or real estate investments, depending on the current nature of the financial markets. (Stock market is down, real estate market is down, but gold spot is up, for example. Like during the recent late 2000s/early 2010s Great Recession, or during 2020 in the midst of the Coronavirus Crash before stocks and real estate rallied.)

I have a little bullion because I see it as being potentially useful for realistic money emergencies like personal financial troubles or a national economic crisis, not for zombie apocalypses or post-nuclear wastelands or The End Times.

(But it's also just one tool in the toolbag, not the be-all and end-all of my financial preparation. Diversification isn't just for stock portfolios... It's also for emergency funds. I also have stock and bond investments, real estate, cash on hand, collectible firearms, and a savings account as components of my personal "financial shit happens" stash.)

Pt bullion and a chemistry degree, could be useful, depending on how far TEOTWAWKI goes.

If I were to invest in gold, I would only invest in physical gold. Yes, it comes at a premium, but many experts believe there is much less actual physical gold than what banks/papers claim.

quote:

Originally posted by WingedMedic:
physical gold

Is there some other kind? I must be really behind the times.

quote:

Originally posted by parabellum:

quote:

Originally posted by WingedMedic:
physical gold

Is there some other kind? I must be really behind the times.

There are exchange traded funds (ETF) that are a blend of a mutual fund and a stock. Their price fluctuates all day like a stock.

I've held SLV a few times which is an ETF for silver. Essentially, the fund owns physical silver and people like myself buy in as fractional owners. For example, last spring when I saw the fed and the Congressional Critters pumping trillions of imaginary dollars into the economy I bought as an inflation hedge. I got out when it doubled and it was a orders of magnitude easier to get out of when I did it 12 plus years ago with physical silver.

quote:

Originally posted by WingedMedic:
If I were to invest in gold, I would only invest in physical gold. Yes, it comes at a premium, but many experts believe there is much less actual physical gold than what banks/papers claim.

OK, so there are/were some shenanigans with "Gold Certificates" being issued for more gold than the company had.

The ETFs, at least the one I looked at, could be lying - always a chance of that. They seemed upfront about .6% taken for fees, and the rest of their assets to be a mix of bullion and cash.

As a pure inflation hedge, as long as they aren't scams, it seems lower cost than physical bullion - and its easy to jump in and out.

Be careful of those commodity ETF's. I messed with one a couple of years ago, and I had to fill out some weird tax form for my Federal taxes.

Not that it was a big deal, but if someone else is doing your taxes, they will charge extra for this extra form.

To be specific I bought / sold USO at the time. I'd have to look back at what the form was --- been too long to remember it.

quote:

Originally posted by WingedMedic:
......many experts believe there is much less actual physical gold than what banks/papers claim.

Warren Buffet once said that all the physical gold that's ever been found or mined would fit into just a few railroad boxcars.

BBC article here says a cube of 20 meters (67 feet) on each side.

I would have thought there was a lot more of it. A little bit of Gold is in much of our electronics not to mention the jewelry that so many people have. Multiply that by millions of people and that's a lot of gold right there.

quote:

Originally posted by parabellum:

quote:

Originally posted by Aglifter:
I have some bullion for emergencies

I have bullets for the same reason and I'll wager that they will be better barter items if all falls apart, than gold. Plus, you can't shoot gold coins or ingots at looters.

It's just about as malleable as lead, but slightly more expensive to reload

quote:

To be fair

quote:

Originally posted by Aglifter:
As a pure inflation hedge, as long as they aren't scams, it seems lower cost than physical bullion and its easy to jump in and out.

$CEF was listed in the early 1960s as a way for US investors to invest in gold when it was illegal to own gold in the US. It was 50/50 gold and silver and structured as a closed-end fund (hence the ticker symbol). AFAIK, it wasn't until the 2000s that similar products such as $GLD and $IAU (both gold only) and $SLV (silver only) appeared.

$CEF shareholders voted to join Sprott's collection of closed-end funds of metals which are $CEF, $PSLV, $PHYS, and $SPPP :Sprott Physical Bullion Funds

In addition, there is the ETF $GLTR with 1/4 each gold, silver, palladium, and platinum.

quote:

Originally posted by radioman:
Be careful of those commodity ETF's. I messed with one a couple of years ago, and I had to fill out some weird tax form for my Federal taxes.

$UGL and $AGQ (2x leveraged to gold and silver, respectively) will generate a Schedule K-1. I avoid them for that reason and tracking error.

Nothing at all wrong with putting a part of a portfolio into precious metal. If the point of the exercise is to put part of your investing cash into something that keeps its value over the long term, no matter what, it's logical to consider PM ETFs.

ETFs are cheap (no premium over spot to buy, don't get nicked with discounts when selling) and as liquid as anything traded, but there are costs assessed into the fund itself for storage, insurance and administration.

Compared to physically buying and storing it yourself, sure there are disadvantages: you can't physically hold it, you have to be confident in the market continuing to work and in the administrator of the ETF being legit, and of course if/when zombies start attacking, pieces of paper showing you own shares in an ETF aren't going to buy you any food or ammo. Then again you don't have to buy a safe, worry about theft, or insure your gold when it's held by an ETF.

Understand going in though, that profits from PM investing - whether through ETFs or directly held - are treated differently by the IRS than regular capital gains/losses.

Some vehicles generate extra tax paperwork as well, adding to the costs of holding (the ones structured as Exchange Traded Notes, particularly) but ETFs like GLD and SIVR and PPLT just hold the metals and don't have that particular issue. Check before you buy to make sure.

quote:

Originally posted by rh:
In addition, there is the ETF $GLTR with 1/4 each gold, silver, palladium, and platinum.

Geez. Ticker puns.

GLTR = Glitter. As in "All that glitters is not (just) gold."

If precious metals are your thing as a hedge against financial meltdowns, etc., I don't see how anything other than the actual metal in your possession is any better than greenbacks.
Do you really trust whoever is on the other end of those accounts, funds, and other methods of "investing" to be all that reliable and trustworthy that you bet on them to be there in those circumstances and able to get you your "stuff", whatever that is?
The possible scenarios are mind numbing and I have other more mundane things to deal with each day.
From what I've seen in the last decade or so, ammo and toilet paper seem to be the coin of the realm that are most practical. With those you can get almost anything else.

I have some Franklin half dollars and 1/10th ounce gold philharmonics.

Number one reason is for some one or two month interval if the electric grid goes down. Banking will be halted and I hope to use them for that time period if need be.

Numer two reason is to pass them on to my kids and grandkids.

Investment to make money on them isn't one of my concerns.

Best to have them on hand, not in some vault these comcpanies have.

Guys, it’s just an inflation hedge/something I wish I knew of in Spring of 2020 when Pt collapsed in market price but was unavailable as bullion