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Vols&Shaft83 
Tennessee Fan
Member since Dec 2012
3098 posts
| Gold and Silver VS Stocks (Posted on 1/11/13 at 10:01 am)
I have never purchased either as investments. I do own some Liberty Silver dollars and some Canadian gold maple leaf coins I got as a gift, but that's it. I'm a paper asset (stocks/bonds/funds) and business investor only at this point. I am considering adding another investment vehicle to my portfolio.
Can some of the MT investors make a case for why precious metals are a good investment, as opposed to stocks?
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LSUtoOmaha 
LSU Fan
Nashville
Member since Apr 2004
20469 posts
| re: Gold and Silver VS Stocks (Posted on 1/11/13 at 10:10 am to Vols&Shaft83)
Hedging. When the value of the USD goes down, or when general economic unrest occurs, the value of silver and gold tends to go up. It's not always the case though.
Also, a lot of people like to have tangible assets as part of their overall investment portfolio. This is one of the easier ways to accomplish that.
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Vols&Shaft83
Tennessee Fan
Member since Dec 2012
3098 posts
| re: Gold and Silver VS Stocks (Posted on 1/11/13 at 10:25 am to LSUtoOmaha)
That makes sense to me, but couldn't you accomplish the same type of hedge with bonds?
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LSUtoOmaha
LSU Fan
Nashville
Member since Apr 2004
20469 posts
| re: Gold and Silver VS Stocks (Posted on 1/11/13 at 10:34 am to Vols&Shaft83)
Not really from a "secure" standpoint. Bonds are still relying on your trusting of a government, corporation, or entity to pay back a debt. That is not the case with hard assets.
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DaBeerz 
Virginia Tech Fan
Billsburg, VA
Member since Sep 2004
8861 posts
| re: Gold and Silver VS Stocks (Posted on 1/11/13 at 10:57 am to Vols&Shaft83)
Do both invest in the stock GLD
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foshizzle
LSU Fan
Member since Mar 2008
25073 posts
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| re: Gold and Silver VS Stocks (Posted on 1/11/13 at 10:59 am to LSUtoOmaha)
quote:
Bonds are still relying on your trusting of a government, corporation, or entity to pay back a debt. That is not the case with hard assets.
It absolutely is the case with hard assets. Unless you are doing your own assays, you are counting on someone else (often a government) to guarantee purity.
That said, I think having some in a commodity fund is generally a good idea just so you can have something that doesn't move as much in tune with other financial markets. As far as price movement goes it is probably slighly worse than stocks b/c there is no dividend, but IMHO the uncorrelated nature of price movement is worth something too.
But that can be said for any commodity, not just PM's. To me, the problem with physical ownership of gold/silver is that if you're really serious about protecting yourself in a financial meltdown scenario, gold and silver may not be worth as much as you think. If the financial system melts down, it won't be that easy to sell your gold for something else as it is now. Plus, you wouldn't want word to get around that you have lots of it at home.
Shotgun shells would probably be a better hedge for that sort of thing. Easily saleable in small quantities, plus you may need to use the ammo yourself. If the financial system does not melt down, you're better off with certificates anyway.
All that said, if you just want a few thousand in gold/silver coins to look at, go right ahead. But that isn't enough to be an investment. If you want physical possession of enough PM's to make it worthwhile, you'll need those shotgun shells and an alarm system, preferably a bull mastiff.
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LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
63149 posts
| re: Gold and Silver VS Stocks (Posted on 1/11/13 at 11:03 am to foshizzle)
"Bitcoins" - WikiTiger
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foshizzle
LSU Fan
Member since Mar 2008
25073 posts
Online
| re: Gold and Silver VS Stocks (Posted on 1/11/13 at 11:17 am to LSURussian)
Yeah, the price always goes up on that one, great way to store value. 
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Vols&Shaft83
Tennessee Fan
Member since Dec 2012
3098 posts
| re: Gold and Silver VS Stocks (Posted on 1/11/13 at 11:29 am to foshizzle)
This was my thinking, what's stopped me from PM's is not seeing the intrinsic value (probably because there isn't any).
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Signature
LSU Fan
Omnipresent
Member since Sep 2005
5436 posts
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| re: Gold and Silver VS Stocks (Posted on 1/11/13 at 12:29 pm to DaBeerz)
quote:
Do both invest in the stock GLD
And for silver look at SLV.
Also, not to be pedantic... but GLD and SLV are ETF's, not stocks.
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C
LSU Fan
The Woodlands, TX
Member since Dec 2007
17392 posts
| re: Gold and Silver VS Stocks (Posted on 1/11/13 at 2:04 pm to foshizzle)
GOLD HAS KICKED THE CRAP OUT OF STOCKS FOR THE PAST TEN YEARS!!!
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LSUtoOmaha
LSU Fan
Nashville
Member since Apr 2004
20469 posts
| re: Gold and Silver VS Stocks (Posted on 1/11/13 at 2:51 pm to foshizzle)
Foshizz, explain what you mean to me about javing the government or someone else "guaranteeing purity." Are you implying people would counterfeit or lie about the percentage content?
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Bard 
LA-Monroe Fan
BR
Member since Oct 2008
12794 posts
| re: Gold and Silver VS Stocks (Posted on 1/11/13 at 8:52 pm to LSURussian)
quote:
"Bitcoins" - WikiTiger
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djmicrobe
LSU Fan
Planet Earth
Member since Jan 2007
1220 posts
| re: Gold and Silver VS Stocks (Posted on 1/11/13 at 11:20 pm to Vols&Shaft83)
Gold and silver is like an insurance policy to protect one from the devaluation of currencies. Typically, gold and silver would go up when unlimited money is printed.
Extreme case: Zimbabwe.
Many people have fire insurance, car insurance, life insurance and hope they never need it (Life ins is needed only once-obvious)
Storing some gold/silver would be like Currency Devaluation Insurance, but the best type of insurance would be actually possessing the gold/silver. Paper assets can be manipulated too easily. The entity holding your account could mysteriously lose it and have difficulty finding it.
There is too much corruption in financial institutions today, and it's getting worse. If you trust them, fine. I'm losing trust daily.
My case is that gold/silver is more of an insurance policy than an investment. The more trust you have in the strength of the currency, the less insurance you'll need. The less trust you have, the more ins. you'll need.
You'll have to decide how much faith you have in USD strength, and place your bets based on your faith.
When politicians want NO DEBT CEILING, I think that currency will soon be in trouble.
If you know you have a life-threatening disease, and a company will allow you to buy life insurance, how much do you buy?
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