Diversifying my investments

[mAdMaLuDaWg]

So with the stock market experiencing extreme volatility and real-estate tanking, I've been looking at ways to diversify my investments. I've been following Gold for over a year now, and I bought a bit of gold when it was at its peak this year. Looking at the commodities market and the stock market in general, I think Gold has held up reasonably well.

As such, I'm thinking of investing around 3-5K into gold and silver bullions over the coming months. I'm thinking of buying them in small denominations like multiple quarter oz. coins so that I could sell a few at any point and still have a bit remaining in my collection.

Any one have experience with buying bullions? Any tips on how to get them cheap? Are there any particular makes that I should be looking at? What are your thoughts on the gold market in general?

Right now, I'm looking at ebay and there are quite a few listings whereby I could get a bullion for close to $30-$40 under spot with Live.com cashback. I couldn't find an online retailer that could beat that.

 

[Special K]

Historically, gold has performed pretty poorly as a long-term investment. I don't have a chart handy to link you to, but if you plot the growth of stocks and gold on the same chart over decades, stocks beat out gold by a very large margin.

One way to think of gold is as a store of value - in 1900, an ounce of gold bought you a nice suit. In 2000, an ounce of gold still bought you a nice suit, albeit at a higher absolute price.

 

[glenn1]

Originally posted by: mAdMaLuDaWg
So with the stock market experiencing extreme volatility and real-estate tanking, I've been looking at ways to diversify my investments. I've been following Gold for over a year now, and I bought a bit of gold when it was at its peak this year. Looking at the commodities market and the stock market in general, I think Gold has held up reasonably well.

As such, I'm thinking of investing around 3-5K into gold and silver bullions over the coming months. I'm thinking of buying them in small denominations like multiple quarter oz. coins so that I could sell a few at any point and still have a bit remaining in my collection.

Any one have experience with buying bullions? Any tips on how to get them cheap? Are there any particular makes that I should be looking at? What are your thoughts on the gold market in general?

Right now, I'm looking at ebay and there are quite a few listings whereby I could get a bullion for close to $30-$40 under spot with Live.com cashback. I couldn't find an online retailer that could beat that.

Precious metals are hard to come by in the physical market right now and you'll probably pay a sizeable premium (life is always hard for gold bugs). An alternative would be to buy gold ETF shares (like GLD), you'd pay a far smaller premium but obviously it's a different beast than holding bullion.

 

[hiromizu]

I think precious metals are kind of tricky but if anything, I'd buy more CEF.

 

[thomsbrain]

Originally posted by: Special K
Historically, gold has performed pretty poorly as a long-term investment. I don't have a chart handy to link you to, but if you plot the growth of stocks and gold on the same chart over decades, stocks beat out gold by a very large margin.

One way to think of gold is as a store of value - in 1900, an ounce of gold bought you a nice suit. In 2000, an ounce of gold still bought you a nice suit, albeit at a higher absolute price.

Exactly. IIRC gold peaked in value in the early 1980's. Twenty five years later and still a net loss in value since then. There is little to no long-term growth, making it a poor investment.

 

[Passions]

It's a good idea to buy bullion. I was thinking of buying up thousands myself.

When the US economy and dollar collapse, life savings will be wiped out, people will return to the barter system and gold is all that's left for civilization.

The lie can only go on for so long.

 

[mcmilljb]

Originally posted by: Special K
Historically, gold has performed pretty poorly as a long-term investment. I don't have a chart handy to link you to, but if you plot the growth of stocks and gold on the same chart over decades, stocks beat out gold by a very large margin.

One way to think of gold is as a store of value - in 1900, an ounce of gold bought you a nice suit. In 2000, an ounce of gold still bought you a nice suit, albeit at a higher absolute price.

I heard supposedly the same thing about the Romans. Their suit was a nice robe though

 

[kranky]

You'll never find an online retailer selling for $30-$40 under spot. The Live cashback is the best deal for the moment.

apmex.com has pretty good prices but with the shortage of physical gold (and silver) right now, prices are well over spot. I would stick with American Eagles. Remember you'll pay a higher premium for 1/4 ounce than you will with larger ones.

 

[Sho'Nuff]

www.goldmoney.com

 

[flxnimprtmscl]

I'd definitely invest in bullion if I were you. I'd probably go with chicken or beef flavor, though. To each his own.

 

[Bignate603]

Currently platinum prices might be a good deal if you're willing to wait out this recession. A big driver for platinum price is auto sales (platinum is in the emissions system) and they aren't exactly moving a huge amount of cars. When the auto market recovers it will drag platinum price back up.

 

[LegendKiller]

Originally posted by: Passions
It's a good idea to buy bullion. I was thinking of buying up thousands myself.

When the US economy and dollar collapse, life savings will be wiped out, people will return to the barter system and gold is all that's left for civilization.

The lie can only go on for so long.

You know, there was a man named Howard B. who was a US Senator in the early/mid 1900's and Frank B. (Howard B's brother) that said the same thing throughout their lives. Howard B. went out and bought a farm to protect his family against the oncoming dollar/ecnomic collapse (he thought the US took on too much debt, economic liberals were destroying the country, and everything would die), Frank B. helped out.

Luckily for millions of investors, Howard B.'s son was far smarter, pragmatic, and is now the world's richest man. He bought this textile company in New Bedford for something like $7-$12 per share around 1962. Last time I checked, it was worth around $102,000/share.

Not so ironically, Howard B.'s son is all-in America. AFAIK, he doesn't have any major holdings in gold.

Are you on the Forbes list?

 

[Fritzo]

There's too much turmoil in stocks and commodities right now. If you want something that you don't have to watch every day, put your money in CDs. There's places offering 5.25% and higher now.

It's a day traders paradise right now, but you'll lose your shirt if you put money in for the long haul.

 

[LegendKiller]

Originally posted by: Fritzo
There's too much turmoil in stocks and commodities right now. If you want something that you don't have to watch every day, put your money in CDs. There's places offering 5.25% and higher now.

It's a day traders paradise right now, but you'll lose some money, in the short-term, if you put money in for the long haul.

Fixed for you.

 

[mAdMaLuDaWg]

Originally posted by: Special K
Historically, gold has performed pretty poorly as a long-term investment. I don't have a chart handy to link you to, but if you plot the growth of stocks and gold on the same chart over decades, stocks beat out gold by a very large margin.

One way to think of gold is as a store of value - in 1900, an ounce of gold bought you a nice suit. In 2000, an ounce of gold still bought you a nice suit, albeit at a higher absolute price.

I don't know, it seems that gold has picked up rapidly over the past decade. I've been looking at charts for the past weeks and I think that Gold is going to be next choice for "flight of safety" after the Treasury Bubble pops. Right now, I think that the safest thing to invest in is Gold. At the very least, I expect it to keep up with inflation.

One of my good friends who has done rather well with investments thinks that Gold is also in a bubble phase and it is going to pop soon. He is betting more on foreign investments for long term growth than anything else though. However, he thinks that Gold is good for short term safety while investments start moving towards the East.

I don't know to be honest, my 401(k) dropped 40% in the last year and I'm thinking of reducing my contributions and putting that extra money into commodities.

 

[LegendKiller]

Originally posted by: mAdMaLuDaWg

Originally posted by: Special K
Historically, gold has performed pretty poorly as a long-term investment. I don't have a chart handy to link you to, but if you plot the growth of stocks and gold on the same chart over decades, stocks beat out gold by a very large margin.

One way to think of gold is as a store of value - in 1900, an ounce of gold bought you a nice suit. In 2000, an ounce of gold still bought you a nice suit, albeit at a higher absolute price.

I don't know, it seems that gold has picked up rapidly over the past decade. I've been looking at charts for the past weeks and I think that Gold is going to be next choice for "flight of safety" after the Treasury Bubble pops. Right now, I think that the safest thing to invest in is Gold. At the very least, I expect it to keep up with inflation.

One of my good friends who has done rather well with investments thinks that Gold is also in a bubble phase and it is going to pop soon. He is betting more on foreign investments for long term growth than anything else though. However, he thinks that Gold is good for short term safety while investments start moving towards the East.

I don't know to be honest, my 401(k) dropped 40% in the last year and I'm thinking of reducing my contributions and putting that extra money into commodities.

I agree that there are a lot of good foreign investments that will look attractive after this situation stabilizes. However, considering the asian dependancy on the US to consume, it's an interesting analysis to determine how well they can do without the US recovering quickly.

I don't see commodities raising anytime soon. They are/were tremendously over-valued and I do think the last shoe to drop will be gold. You can see various reports of banks finally laying off, or cutting bonuses of, commodity traders. It's because while they were making fat profits when they were going up, they see a huge pullback. Most of the bubble was caused by derivative contract demand, not actual demand.

That demand, especially in light of potentially increased regulation of derivatives, won't come back as strong as it was any time soon.