Why would anyone invest in stocks when they can invest in precious specie?

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Anarchist420

Diamond Member
Feb 13, 2010
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The stock market is risky and you usally have to pay someone to manage your money for you.

However, Precious metals are not risky because the dollar never deflates, and even if it does, just reinflates and then some.

I keep on telling my parents that my dad's retirement savings are going to be wiped out but they just say "oh well, someone else handles that for us". I also tell my dad that he could've retired two years ago if he had invested his savings in gold a decade ago and then he says it's a shame he didn't invest in gold a decade ago. Yet he still PAYS someone else to *maybe* make more fiat currency for him.

I invest all of my savings in silver, and I ordered silver for my graduation present. I'll never waste money in the stock market.
 
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LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Anarchist420 said:
The stock market is risky and you usally have to pay someone to manage your money for you.

However, Precious metals are not risky because the dollar never deflates, and even if it does, just reinflates and then some.

I keep on telling my parents that my dad's retirement savings are going to be wiped out but they just say "oh well, someone else handles that for us". I also tell my dad that he could've retired two years ago if he had invested his savings in gold a decade ago and then he says it's a shame he didn't invest in gold a decade ago. Yet he still PAYS someone else to *maybe* make more fiat currency for him.

I invest all of my savings in silver, and I ordered silver for my graduation present. I'll never waste money in the stock market.
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Metals are just as risky. People like you claimed they were risk-free back in the early 80s (we know you weren't even born then). This is one huge reason why metals have a weak statistical correlation coefficient to inflation, you can do it quite easily, while stocks have a stronger one.

Stocks have pricing power since the companies can pass on inflationary pressures onto consumers, especially for consumer staples.

Metals don't pay dividends and only grow in value through sales, not through value or creation of goods/services.

Gold is a fiat currency.

Hindsight is 20/20. If he had invested in gold in 1982 and didn't sell through current, he'd be far behind stocks. You can pick any specific timeframe and move the mark on investments, any good investment professional knows that. You giving advice to your parents on investments is akin to asking the drooling shoe shine boy how to make a warp drive.
 
_GTech

_GTech

Member
Mar 25, 2011
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Investing in your Financial Education is advice many should heed, obviously the OP is completely out of the loop, saying you usually have to turn your money over, and that's where your wrong, dead wrong!

I'd rather invest in owning my own business than invest 1 freaking $ in the stock markets or commodities...

Once Real Estate has fallen out completely, then I may be moving in to make passive income..

Other than that, I just cannot handle such a volatile market which is being prompted up by fiat money in the amount of trillions by the Government. Thanks but no thanks...

Not to mention that if all the stocks for gold were cashed in for gold, many people would not be getting any gold because they are trading more stocks than there is actually gold in reserve!! That's indicative to selling houses without actually having houses! I smell a rat, a very big fat pocketed rat!
 
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matt0611

Golden Member
Oct 22, 2010
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I don't use gold and silver as "investments" and I don't really consider them one because they pay no dividends.

I consider them an alternative to cash.

I have a lot of stocks and bonds, some cash and some gold/silver, don't put all of your eggs in one basket.
 
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LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
_GTech said:
Investing in your Financial Education is advice many should heed, obviously the OP is completely out of the loop, saying you usually have to turn your money over, and that's where your wrong, dead wrong!

I'd rather invest in owning my own business than invest 1 freaking $ in the markets...

Once Real Estate has fallen out completely, then I may be moving in to make passive income..

Other than that, I just cannot handle such a volatile market which is being prompted up by fiat money in the amount of trillions by the Government. Thanks but no thanks...

Not to mention that if all the stocks for gold were cashed in for gold, many people would not be getting any gold because they are trading more stocks than there is actually gold in reserve!! That's indicative to selling houses without actually having houses! I smell a rat, a very big fat pocketed rat!
Click to expand...

There is no "rat", people like OP have no idea what they are doing and buy into the first thing they can grab. People who don't understand investments don't understand that gold is being subjected to the same highly leveraged speculation as houses. This has a huge influence on the price.
 
Pliablemoose

Pliablemoose

Lifer
Oct 11, 1999
25,195
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I'm sure your dad appreciates you telling him he screwed up to the tune of hundreds of thousands of dollars and has to postpone retirement. Cut him some slack, and worry about yourself and how you're going to retire...
 
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Aegeon

Golden Member
Nov 2, 2004
1,809
125
106
To emphasize the point, in reality gold is definitely speculative and certainly quite risky with a large portion of your portfolio invested in it. In 1979 gold hit 750$ per ounce and by 1982 had dropped to under 350$ per ounce, and actually fell to 250$ per ounce in 1999. (With inflation it effectively performed even worse.)

The reality is that hard basis of gold prices is limited with only so much absolute demand for jewelry and the like or other industrial uses. Gold prices are heavily impacted by how much investors value it at the moment. Its true its price won't go to zero, but you can potentially end up losing allot of money holding it. Its true that individual stocks can go to zero, but you can effectively avoid that risk by buying into broad index funds or etfs. (And the dollar valuation risk can be addressed by buying non currency hedged foreign stock indexes.)

Furthermore, unlike stocks, if you own ordinary gold you don't get the benefits of owning a portion of company which can grow in time. On top of the basic value of the stock share, if a company is consistently profitable over the long term it should start paying out dividends on top of this, which you never get from owning gold. Basically unlike stocks which historically have over the long term consistently significantly outperformed inflation, you can expect gold to track inflation over the long term. Gold as an investment has been very drastically over-hyped recently, often by companies who make their money selling it in various ways. (Its recent run-up in price in the last few years actually makes it a much more questionable investment if you're buying into it right now.)
 
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WHAMPOM

Diamond Member
Feb 28, 2006
7,628
183
106
Anarchist420 said:
The stock market is risky and you usally have to pay someone to manage your money for you.

However, Precious metals are not risky because the dollar never deflates, and even if it does, just reinflates and then some.

I keep on telling my parents that my dad's retirement savings are going to be wiped out but they just say "oh well, someone else handles that for us". I also tell my dad that he could've retired two years ago if he had invested his savings in gold a decade ago and then he says it's a shame he didn't invest in gold a decade ago. Yet he still PAYS someone else to *maybe* make more fiat currency for him.

I invest all of my savings in silver, and I ordered silver for my graduation present. I'll never waste money in the stock market.
Click to expand...

Another "Look how much this is worth now! Better go buy some at inflated prices!" Ever hear of a bubble? Great way to lose money.
 
gevorg

gevorg

Diamond Member
Nov 3, 2004
5,070
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Precious metals are prone to bubbles just like anything else. Everything has a risk, even US Treasuries.
 
Steeplerot

Steeplerot

Lifer
Mar 29, 2004
13,051
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posting in a 420 troll thread wewt
 
Steeplerot

Steeplerot

Lifer
Mar 29, 2004
13,051
6
81
that does suck d00d, if you woulda got your dadz scammed out of all his dough you maybe woulda had to sell your rig...that would be terrible!
 
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ShawnD1

Lifer
May 24, 2003
15,987
2
81
Anarchist420 said:
The stock market is risky and you usally have to pay someone to manage your money for you.
Click to expand...
wtf? I don't think I have ever paid anyone to "manage" my stocks. It's $10 per trade and that's it. It's just a transaction fee.


However, Precious metals are not risky because the dollar never deflates
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hommelberg071906e.gif


I feel sorry for the guys who bought in 1980. Within a year, the thing crashed out and was worth half as much. Bye bye early retirement :'(
 
GuitarDaddy

GuitarDaddy

Lifer
Nov 9, 2004
11,465
1
0
ShawnD1 said:
wtf? I don't think I have ever paid anyone to "manage" my stocks. It's $10 per trade and that's it. It's just a transaction fee.



hommelberg071906e.gif


I feel sorry for the guys who bought in 1980. Within a year, the thing crashed out and was worth half as much. Bye bye early retirement :'(
Click to expand...


I graduated college in 1980 and because of the insanely inflated gold prices I refused to buy a senior ring, the price had gone up 8x in the four years since I bought my HS ring. I feel the same way about the price of gold today, it is in for a huge fall at some point IMO, it not as overvalued as it was in 80' but it is heavily overvalued non the less.
 
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