Buying gold

[JustaDreamer]

I started off buying gold when it was $850 US an oz and bought one oz a month, the decided to draw down $30,000 of my home loan and buy 25 oz in one hit. When gold did hit 1900 an oz I was overseas and did not sell any. But my goal is 120 oz so when I stop working can sell 1 oz a month for 10 years.

But looking at silver it has out performed gold in last 5 years I do hold silver but not much.

 

[Redwood]

Hi all,

Do you think it's worth buying 1/2oz of gold to start with. My plan is to diversify from property atm and get smaller amounts of gold rather than a 1kg block. Has anyone bought smaller amounts of gold?

Thanks

I am in the SMSF field and I can tell you that many of my clients are investing in Gold through their SMSF, i'm not advocating it however its an extremely popular strategy and there are no shortage of seminars around the country to 'convince' you of the benefits.

In terms of diversification, need to consider the income from gold if any as opposed to other investments such as property and shares.

 

[Future Assist]

Ive been told by a bullion guy... not sure if its true or not, to buy PM's in objects of significance, rather than bars. i.e.. rare coins, jewellery, or smaller plates with significant inscriptions or images etc. that can be tied to 'family heirlooms'.

reason being (supposedly) that there is some obscure old law in the commonwealth the gives the monarchy (queen) the right and ability to focibly recall and claim gold held by citizens... it is an old 'in case we go to war / protect the commonwealth' law.

conspiracy or legit?

_______________________
J
Future Assist SMSF

 

[oracle]

However, there have been some great investors such as Jim Rogers, Marc Faber, George Soros and Eric Sprott who have made absolute fortunes out of commodities including gold.

The issue is even though everyone believes they are as smart and skilful to time the market like Soros and Rogers are the reality is most of them are not and end up losing money big time.

The last I read somewhere was Soros was completely out of Gold investments when Gold traded around $1500 but it then went on to reach all time high of $1960 something.

One of the cardinal rules of investing is preservation of capital and next is making satisfactory return on that capital. When you play the game of timing the market you are basically making a bold call that you know something the other guy doesn't know and that he is on the wrong side of the trade and you are on the right side.

Well, I'd suggest that NO fiat currency has ever survived the process of quantitative easing by way of printing more money http://dailyreckoning.com/fiat-currency/

Hence, keeping your money in cash is a very bad investment long term. No matter what the currency of the day is if you own quality businesses or farmland producing essential crops or real estate in good location you will always be able to command premium value for it. And most importantly it will increase in value over time due it's productive nature.

For the last 5000 people have been using gold and silver as currency amongst over things.

I'm not necessarily suggest buying PM, however it would be wise to hold some PM, but there are investments in the PM space that give you huge leverage to the PM price.

The problem I have with Gold/silver is the historical price increase has been bearly equal to inflation. For the above productive assets they have grown substantially greater than inflation. So if you are going to use history as a guide to invest for the future, PM will only grow equal to inflation rate over the long term so I don't find it an attractive investment. But that's not the only reason why I don't invest in PM. I have few other reasons as well.

Cheers,
Oracle.

 

[JT7]

I appreciate your thoughts Oracle and you make an interesting argument. The argument surrounding PM it seems is never ending.

I have held physical silver in the past however, now find the leverage to good quality, low cost, no debt gold miners at these ridiculous prices absolutely too tempting to pass up.

There is no doubt in my mind that even a majority of PM bulls have fallen into despair after two years of falling values in this market. The PM miners have been absolutely decimated and it seems everyone is calling for gold to go sub US$1000.....

China is buying gold at record rates with a growing middle class and perhaps a shift to back their currency with gold sometime in the future..... Currency debasement is globally rampant and the list goes on....

One things for sure Oracle.... time will tell....

Cheers,

Jack

 

[Intrinsic_Value]

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The problem I have with Gold/silver is the historical price increase has been bearly equal to inflation. For the above productive assets they have grown substantially greater than inflation. .

Cheers,
Oracle.

And therein you have the real secret.
Productive assets.
And over time those assets become 'more productive', hence the justification in the increase in their intrinsic value over time.

Productivity is the friend of productive capital

 

[negt]

And therein you have the real secret.
Productive assets.
And over time those assets become 'more productive', hence the justification in the increase in their intrinsic value over time.

Productivity is the friend of productive capital

I am out at 83c too. Nice little profit which more than makes up for the loss on the 3 thousand I held before the trading halt.

I have kept 5 thousand as a bit of a punt.

 

[Aaron Sice]

Ive been told by a bullion guy... not sure if its true or not, to buy PM's in objects of significance, rather than bars. i.e.. rare coins, jewellery, or smaller plates with significant inscriptions or images etc. that can be tied to 'family heirlooms'.

reason being (supposedly) that there is some obscure old law in the commonwealth the gives the monarchy (queen) the right and ability to focibly recall and claim gold held by citizens... it is an old 'in case we go to war / protect the commonwealth' law.

conspiracy or legit?

_______________________

in the USA, it still exists.

you should buy in denominated currency, because the govt is not allowed to confiscate currency unless by ill-gotten means.

they can confiscate anything they like, if they pass a law to.