Investing General Discussion

I think gold only makes sense as a long term physical hold. I bought some coins around 2012 during the Euro debt crisis at $1400/oz and it then proceeded to go sideways for 10 years. I did the vaulted storage thing for a while too but the storage fees just ate up so much of the gain that it didn't feel worthwhile as an investment. Gold went up like 15% in the two years I had it and I got maybe 7% out of it.

If you're going to buy more than you feel comfortable storing at home the vault storage thing may be an option but at that point you should consider the storage fees more of an insurance premium against loss of principal rather than an investment.

As an aside, the S&P was around 1500 when I bought that gold. There's a reason the mantra in the FIRE movement is to just DCA into a broad index fund and stop looking at it.

The "If gold is useful, buy lead" argument is pretty silly. There is documented evidence in the US of Gold deposits being seized by the government. Why in the world would you believe its impossible for GLD fund to essentially tell you "sorry your gold is gone, here is some paper", followed by a massive revaluation? I get that a lot of you guys don't want to hold Gold, don't believe in a possible chain of events that could lead to it being useful to hold, etc. I don't however think you're ignorant to the past, so I just don't understand the condescension.

I'm not even into Gold but I just don't get the mindset. I guess you've got all your eggs in one basket and can't see any reality other than what you've bet on? There are tons of possibilities that aren't "true collapse" where physical Gold is incredibly valuable and paper gold isn't.

To be clear, I hold 0 gold but I understand their thesis at least

Lambourne said:

I think gold only makes sense as a long term physical hold. I bought some coins around 2012 during the Euro debt crisis at $1400/oz and it then proceeded to go sideways for 10 years. I did the vaulted storage thing for a while too but the storage fees just ate up so much of the gain that it didn't feel worthwhile as an investment. Gold went up like 15% in the two years I had it and I got maybe 7% out of it.

If you're going to buy more than you feel comfortable storing at home the vault storage thing may be an option but at that point you should consider the storage fees more of an insurance premium against loss of principal rather than an investment.

As an aside, the S&P was around 1500 when I bought that gold. There's a reason the mantra in the FIRE movement is to just DCA into a broad index fund and stop looking at it.

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This is the same conclusion that I have come to as well. Physical metals are almost impossible to profit on short term unless you just get insanely lucky. The premium % you pay over spot (and sell under spot) for Gold is better than Silver, but the dollars are way way bigger. Unless you have a friend who has legitimate stuff that they just want to off-load you can expect to pay 10-15% over spot from a coin shop for decent stuff (eagles, krugs, maple leafs etc) and you can expect to sell at 10-15% under spot when you want to unload. So you need the market to shift 30% just to break even. Its absolutely a 10+ year hold for any hope of that kind of movement with a profit.

I think holding 1-2% physical metals between a nice home safe and a safe deposit box or two (which still have some fees) is about as deep as I want to go on it, and its more of a washout for if things really go bonkers you at least have something physical. As others have said, a healthy cache of guns and ammo is pretty nice to pair with it if you are already in that mindset. I would be very suspect of any retail establishment offering to sell gold at spot price, its probably a rip-off.

Flobee said:

The "If gold is useful, buy lead" argument is pretty silly. There is documented evidence in the US of Gold deposits being seized by the government. Why in the world would you believe its impossible for GLD fund to essentially tell you "sorry your gold is gone, here is some paper", followed by a massive revaluation? I get that a lot of you guys don't want to hold Gold, don't believe in a possible chain of events that could lead to it being useful to hold, etc. I don't however think you're ignorant to the past, so I just don't understand the condescension.

I'm not even into Gold but I just don't get the mindset. I guess you've got all your eggs in one basket and can't see any reality other than what you've bet on? There are tons of possibilities that aren't "true collapse" where physical Gold is incredibly valuable and paper gold isn't.

To be clear, I hold 0 gold but I understand their thesis at least

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The only thing I understand is that gold goes up in economic uncertainty. It's a data point.
But personally, I don't understand the rationale.
If we experience a collapse at that scale - who is going to accept gold as tender? Even the bullion experts have trouble sometimes identifying fake gold coins - especially with sophisticated fakes in circulation. Do you really think that an average citizen is going to just accept a gold coin? Also, how do you split it? Silver pieces? I just don't see a future where this is a functional currency anymore. After the disaster - sure, maybe. I guess people can buy it back safely. But during such an event, I think you would be better off hoarding cigarettes, lighters, fresh water, purifiers, etc.

It's because if you're at the point where gold is currency again, well, everything has collapsed enough that rule of law is now gone and anyone with more guns than you can physically take your gold by force. So at that point, what's the point of holding gold and not guns?

Holy shit. We are going to bankrupt the nation at this rate.

US Treasury bumps April-June borrowing estimates up to $514b vs $123b previously.

Also.. huge LOLs:

I feel like gold's greatest use is in case we ever hit hyperinflation. Our stocks, dollars, etc don't have any true intrinsic value, they are just numbers on a screen and pieces of paper. Stocks could be wiped out by a data breach, solar flare, EMP blast, same with money in bank accounts.

Gold likely isn't very useful in such a scenario anyways because at that point you would want food/water/medicine and are you really willing to shell out gold for that? You'd be better off with silver given the transaction size.

Now that I think about it the smarter move for things with intrinsic value would be real estate and silver. Gold.. what would you be willing to buy with that? You would need a hefty amount anyways to get anything worthwhile.

Granted I know people with hundreds of thousands worth of gold so there's that.. but the average person will likely never hold that much.

Sanrith Descartes said:

Debt refinance is my guess. We had a ton of debt expiring this year.

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That shouldn't have been a surprise from February though?