investing in precious metals

[alex52]

I've never understood this thinking. Gold and Silver have been money for 5000 years. How can money be risky ??? It's probably the most conservative investment you could make. And with the Federal Reserve printing money it's the best performing asset classes over the last ten years. How mush was a 1964 dime worth in 1964 ? A dime. How mush is it worth today ? Over $6.00. Why ? Because of the silver content. Back in 1964 you could probably buy a bag of chips and a coke. What's a dime buy you today ? All Gold and Silver are is a reflection of the money supply.

Go calculate what % gain you have made in the last ten years in your RRSP. Then calculate the real inflation rate. And by the way. The CPI numbers the Government puts out are bullshit. They even say so on there web site. It says these numbers " do not include food and energy ". Who needs food and energy ??? Why would I want to calculate food and energy in the inflation numbers ?????

My point is that 10 years ago the Dow was at 10000. What's it today ? Then go back and look at Gold and Silver over the same 10 year period.

It's a no brainer. Buy physical. Stay away from the ETF's unless you know for sure they are backed by physical gold and Silver. I know the Sprott Fund and the Central Fund of Canada are legit. I personally prefer to spread the risk around. I use a vaulting service and I hide my metals.

BS

I admit you make some good points on the subject. My safest investment is property hence the expression "safe as houses".
I think my problem with gold and silver is that price changes of these metals is a bit baffling, the only country in which there is real demand for gold is India.
Also interesting is that lot of countries have sold off their gold reserves.

 

[userz]

You're late to the party, how high do you think precious metal prices will go? As for me I bought a lot of bullion from the RCM in the 90's now worth much more than what I paid for it.

 

[trm]

The formula for making money on investments is buy low, sell high. With gold prices at a record high, it's a seller's market, not a buyer's market.

 

[Big Sleazy]

The formula for making money on investments is buy low, sell high. With gold prices at a record high, it's a seller's market, not a buyer's market.

I disagree. If it wasn't for the almost daily price suppression of Gold and Silver by the Fed and the Banks the price of Gold would be well over $2,000.00/oz and Silver would be over $100.00. The Fed's are going to have to do another round of QE. They have no choice. The only alternative is to raise interest rates and if that happens watch out....... It's my belief that the US Government and the Federal Reserve are trying to manage the rise of Gold and Silver to protect the dollar as the World's Reserve Currency. But even with the constant manipulation they can't hold the price down year over year. Buy physical and go long.

BS

 

[oil&gas]

Being the risk-averse type I generally prefer to invest in physical
bullion funds like Central Gold Trust and Central Fund of Canada
rather than mining stocks. So far the equity market in the
precious metal sector have been seemingly in a free fall from its
peak hit last year. I had thought this brutal correction
would end early this year. I had expected that precious metal
stocks would be trading sideways for the 1st half of 2012 before
it enters the next bull phase. Turns out this correction seems to
have no end in sight. Regardless of how low the index of the mining
stocks may hit by the end of this year I've decided that gold and silver
stocks are now the most undervalued investment on the planet. The
appreciation of bullion prices from the last few years is nothing relative to
the debt load of the U.S. and Europe. All of the gold reserves in the world's
central banks can back up only an insignificant fraction of just one single
fiat currency alone the USD. I believe it is now time to allocate more
of my cash into high risk junior mining stocks. But I could be wrong with
my timing. To hedge against my bet on a recovery of gold and silver
stocks I submit this post to make a fool out of myself in the event
of the crash of the bullion prices. One year from now this thread will be
reopened by someone to give me hell because he goes broke.

 

[CapitalGuy]

So.... If you can afford to buy gold or silver bars from a reputable source. My rule of thumb is ~ 1/3 of your investments. Minted silver/gold should be looked at only for its silver/gold content. If you are concerned about devaluation, do your homework and see how it was done already. There are several great ways to insulate yourself from the impact. If you find them do not tell people. If the government thinks enough people are using them, they will plug the holes.

Loki it was so nice of you to pass this advice to your 'wife', who on a recent thread gave this exact same advice to his (I mean her) readers.

 

[saxon]

You should have gone to the PDAC mining show this past weekend at the convention centre. It's the best place to get all kinds of free info on gold and silver mining companies. Companies of all sizes were present with management around to answer any questions you might have. Several free seminars for those who are not sure about the precious metal markets. Having said that the junior mining market is very volatile and most small companies will run out of money and collapse. You need to educate yourself about investing in this sector before you start. As said earlier in this thread ETF's are a suckers bet in this sector.

 

[dtjohnst]

Precious metals are considered risky because the fluctuate, sometimes wildly. If you're going to be checking the spot price daily, it's not for you. If you're long for a big gain in the short term, it's not for you. If you don't understand what fiat currency or hyperinflation mean, it's not for you.

On the other hand, with the world's central banks increasing the money supply at an alarming rate with no sign of slowing down, devaluating currencies, precious metals will likely climb much higher. There will be big corrections and lots of them. But in my opinion, in the long term of the foreseeable future, from a macro scale, precious metals will keep going up. Maybe not stocks in companies that mine, mint or refine, but in the actual metal: absolutely.

I don't recommend metals for a novice, someone investing short term, or someone looking to get rich quick trading or someone who gets nervous if their investment gets slashed over the course of three or four days. But if you have a fairly diversified portfolio and you have been researching macro-economics for a bit, it's a solid way to go.

 

[Kent70]

REITs, worth every penny!

 

[homerjsimpson]

Buying precious metals really isn't an investment, and shouldn't be looked at as such. It is a store of wealth. Fiat money will always continue to lose value while gold & silver will always maintain value. As others have said, you buy it for the long term. If you look at any country that has gone through hyperinflation in the last 100 years (longer?), those that managed to get their money out of the local currency and into tangibles (gold & silver primarily) came out the other side very well.

The US and many of the European countries are going down the tubes financially, and there is nothing they can do about it. They can only continue kicking the can down the road. But one day they will run out of road. And Canada will not be immune to a global financial meltdown.

To the OP, I've never used silvergoldbull.com, but I've heard they are a reputable place. I'd probably buy more from them but right now their spot price is artificially high.

 

[dirkd101]

Like others who've stated, precious metals are prone to fluctuate and sometimes those fluctuations can be extreme. Gold has plateaued somewhat over the last year or so, moving around a $200 fluctuation. Gold took off from under $400 ten years ago to a peak of around $1900. It can still be a good investment, but be prepared for ups and downs. Look to the long term, as with most investments and the world's economic problems still hovering, it could be the place to park your investment money.

 

[blackrock13]

I can't believe it, 30+ posts in and not a peep from MSOG, amazing. Could it be?