Gold and silver

sigpros

Well-known member
Joined
Sep 4, 2011
Messages
439
Location
Missouri
Is buying gold and silver still a good investment strategy? Would it be smart to purchase some for my kids? Also where do you guys buy it from? I’m also looking at the youth Fidelity accounts for my kids also. I want to get something going so they can learn to save and be set up later in life. They are 12 and 14
 

TN2shot07

Well-known member
Joined
Aug 30, 2019
Messages
533
Location
West TN
I’ll take my chances long term with mutual funds. I know guys who’ve made money short term with the recent ups and downs but I don’t want any retirement tied up in metals like that. Set the kids up with a few stocks related to something they like to teach them!
 

TOGIE

Well-known member
Joined
Dec 13, 2017
Messages
1,429
Location
CO
looks like if you bought gold in feb 2001 you would be kicking the S&Ps ass, based on simple charts of course. nobody can time that though, no matter how hard they try.

i haven't always understood the obsession with gold. though i'm sure humanity will always place value on it and it's supply is certainly not limitless.

honestly, if i'm gonna buy metals it might as well be guns and ammo... semi joking
 

longbow51

Well-known member
Joined
Aug 2, 2020
Messages
624
Low load index-linked mutual funds. Over the long term, beats managed funds. And yeah, over the short term, if you bought mid-Trump, ammo would have outperformed.
 

SAJ-99

Well-known member
Joined
Jan 5, 2019
Messages
1,728
Location
Montana
looks like if you bought gold in feb 2001 you would be kicking the S&Ps ass, based on simple charts of course. nobody can time that though, no matter how hard they try.

i haven't always understood the obsession with gold. though i'm sure humanity will always place value on it and it's supply is certainly not limitless.

honestly, if i'm gonna buy metals it might as well be guns and ammo... semi joking
If I remember correctly (and I may not) 80's and 90's increase in mining capacity created an over supply of gold versus normal demand and investors had turned their attention to tech stocks. So the starting point price is a bit depressed. Today it seems crypto is the latest trend. Gold and silver will always have some demand, but their lack of usual defensiveness during last year's stock selloff due to pandemic is telling. Agree that mutual funds are a better bet.
 

ElkFever2

Well-known member
Joined
Mar 4, 2019
Messages
3,325
Location
Iowa
Precious metals don’t produce anything. You can’t invest in them. You can only speculate on future value. I’m not a speculator.

Companies, real estate, and loans produce income and/or increase in value by income passing through them. I invest in these vehicles in order to profit on that income.
 

SAJ-99

Well-known member
Joined
Jan 5, 2019
Messages
1,728
Location
Montana
Precious metals don’t produce anything. You can’t invest in them. You can only speculate on future value. I’m not a speculator.

Companies, real estate, and loans produce income and/or increase in value by income passing through them. I invest in these vehicles in order to profit on that income.
So you speculate on the potential of future income. Not much of a difference really, only the backing of the rule of law and a lot of laws. Don’t get me wrong, I agree with you on your choices, but we are all speculators guessing on some future value or the derivative of future value.
 

ccc23454

Well-known member
Joined
Sep 22, 2010
Messages
1,775
Location
Wyoming
Biggest problems with metals as a investment is premiums... you pay a premium over price to buy, you pay a premium (discount under spot) to sell and then if physical asset you also may need shipping and other fees. There are some appealing tax benefits with holding metals and other easily sellable investments. We are in a inflationary period obviously and with gov spending only increasing metals do have some appealing traits. I believe in physical holding some but not to much, say 10% at most. They do make great gifts and can be used as tools to teach kids saving and investing.
 

ElkFever2

Well-known member
Joined
Mar 4, 2019
Messages
3,325
Location
Iowa
So you speculate on the potential of future income. Not much of a difference really, only the backing of the rule of law and a lot of laws. Don’t get me wrong, I agree with you on your choices, but we are all speculators guessing on some future value or the derivative of future value.
They are fundamentally different. Collectibles, currencies, precious metals, commodities, guns, undeveloped land, collector art…they all sit and do nothing. Inflation is going to eat the value away year after year. The speculator hopes that people will value the passive item differently in the future, and then he places a speculative bet. Some speculators make a lot of profit. They are lucky. It’s nearly 100% crystal ball-gazing.

Bonds, real estate, businesses, companies, loans…these are income generating tools. You take on risk investing your money in them just like a speculator takes a risk, but the similarity ends there. With investments you buy a machine that prints money. Things can go wrong, and it doesn’t always work out that way, but generally it does.

I pick a money-printing machine, and a speculator buys a rock that he hopes people will want more than they do today. Take your pick
 

Flatrock

Well-known member
Joined
Dec 1, 2010
Messages
1,553
Location
Bismarck, ND
Gold and silver can occasionally have some good periods of performance but I echo most everyone else and buy low cost index funds instead. I used to fart around with gold and silver a little bit and literally every single time I did, I would have been much better off just buying an index fund.
 

Bgriffith

Member
Joined
Apr 21, 2020
Messages
98
Gold and silver should (in my opinion) be used to hedge against inflation… while I do have say… I donno 5-8ish maybe percent in my portfolio of physical metals it’s mainly to have something in case the dollar crashes. Gold and silver will always have value equal to whatever it’s going rate is in whatever currency… dollar, pound sterling, yen, whatever…
 

SAJ-99

Well-known member
Joined
Jan 5, 2019
Messages
1,728
Location
Montana
They are fundamentally different. Collectibles, currencies, precious metals, commodities, guns, undeveloped land, collector art…they all sit and do nothing. Inflation is going to eat the value away year after year. The speculator hopes that people will value the passive item differently in the future, and then he places a speculative bet. Some speculators make a lot of profit. They are lucky. It’s nearly 100% crystal ball-gazing.

Bonds, real estate, businesses, companies, loans…these are income generating tools. You take on risk investing your money in them just like a speculator takes a risk, but the similarity ends there. With investments you buy a machine that prints money. Things can go wrong, and it doesn’t always work out that way, but generally it does.

I pick a money-printing machine, and a speculator buys a rock that he hopes people will want more than they do today. Take your pick
Fair point. They are fundamentally different. one is a hard asset the others are financial assets. Hard assets are supposed to follow inflation. That is their role. It is interesting that you put real estate in the "approved" category because peoples homes are hard assets and don't exactly "print" money.
My issue is more with people who use the word "speculation" in a derogatory way. All investment is speculation. It seems diversifying the speculative bets in many companies (an index) and across asset classes makes one an "investor".

Edit: To your point though, I agree that if the OP wants to teach his kids about saving and money, your choices are the best. buying a gold or silver coin doesn't teach much. Compounding is a wonderful thing, or the root of all evil, depending on which side of the transaction you are on.
 
Last edited:

sigpros

Well-known member
Joined
Sep 4, 2011
Messages
439
Location
Missouri
Thank you guys. I thought the PM route might be cool for the kids since they would have something to hold and physically see. But then I started looking at the Fidelity 13-17 year old account and think that might be a good way to go also because Worse case it could be a set it and forget it deal and would hopefully grow for 40 years until they need it. Anyone have any experience with this?
 

SD_Prairie_Goat

Well-known member
Joined
Mar 18, 2019
Messages
1,038
Location
SE SD
Thank you guys. I thought the PM route might be cool for the kids since they would have something to hold and physically see. But then I started looking at the Fidelity 13-17 year old account and think that might be a good way to go also because Worse case it could be a set it and forget it deal and would hopefully grow for 40 years until they need it. Anyone have any experience with this?
No experience for me, but keep in mind if they go get post high school education, they might be wanting that money instead of waiting till forty. Just a thought.
 

SAJ-99

Well-known member
Joined
Jan 5, 2019
Messages
1,728
Location
Montana
Thank you guys. I thought the PM route might be cool for the kids since they would have something to hold and physically see. But then I started looking at the Fidelity 13-17 year old account and think that might be a good way to go also because Worse case it could be a set it and forget it deal and would hopefully grow for 40 years until they need it. Anyone have any experience with this?
529 plans can be set up to use for education expenses, and I believe "education" has a broad definition to include college and trade schools. Or you can just set up a taxable account. However, you should set it up so dividends are reinvested, but unfortunately the dividends would be taxable in every year earned. I guess the bright side of that is you teach the kids about taxes too.
 
Top