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Follower ○○○

Buying gold?

Is investing in gold currently a good investment?

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11 Replies
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Participant ○○○

Re: Buying gold?

Buying gold is NOT an investment. It's speculation.

Gold is a NON productive asset. Stocks, bonds, and farmland are productive assets.

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Frequent Contributor

Re: Buying gold?

Thought we went through these discussions recently; maybe do a search to get up-to-date?  

Just a gentle suggestion.

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Frequent Contributor

Re: Buying gold?

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Explorer ○○

Re: Buying gold?


@galeno wrote:

Buying gold is NOT an investment. It's speculation.

 


Let me jot that down.

Oddly, I continually have to tell myself that investing in common stocks is not speculation.

Have I been misinformed?

 

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Frequent Contributor

Re: Buying gold?


@Frank888 wrote:

Is investing in gold currently a good investment?


Frank ...  The only gold investment I have, and I have had it for several years, is Franco Nevada Corp. (FNV) so that is all I am talking about.  It has been a good investment for me but it is a little pricey today and I would not buy today unless you are buying for a very long time frame hold.  It is a royalty and stream company as it invests in mines in exchange for royalties and deliveries of gold.  Their portfolio is 70% gold, 9% silver, 9% platinum/palladium, 1% non-precious metals and 11% energy.  It's yield target is 1%.  Gold is an inflation and uncertainty hedge.  A weaker USD pushes up the price of gold.  FNV has a target of 3% to 5% of PV for me. 

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Explorer ○○

Re: Buying gold?

Depends what you are buying it FOR.

To make money (i.e. capital appreciation) -- NO.

As a portfolio diversifier?  Maybe.  See this

I was uninterested in gold until interest rates hit zeros.  Long Treasuries have historically been the best and most reliable portfolio diversifiers.  But investing in them now?  No.  Probably not offering the same benefits until after the interest rates tick up.

So I'm slowly adding a bit of gold as a diversifier, but I have zero expectations of it being a reliably appreciating asset.  But that's not what I'm buying it for.

 

 

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Participant ○○○

Re: Buying gold?

Yes. Very misinformed. Don't worry. We'll set you straight.


@ignatz wrote:

@galeno wrote:

Buying gold is NOT an investment. It's speculation.

 


Let me jot that down.

Oddly, I continually have to tell myself that investing in common stocks is not speculation.

Have I been misinformed?

 


 

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Participant ○

Re: Buying gold?

If you had asked that question a year ago the answer would have been, yes. Gold is a good diversifier, especially during a downturn. However, at the moment it looks rather over-bought to me. That's not to say it won't continue its upward momentum, it just means you won't have the cushion if markets start to recover and gold sells off.

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Participant ○○○

Re: Buying gold?

I guess gold could be looked at as an expensive "currency" that hedges against USD devaluation.

It's a "currency" with a storage cost. E.g. the ER for GLD = 0.4%. 

It's really too late in the game to speculate / hedge with gold.

I'd consider hedged non-USD bonds or hedged RMB bonds instead. The advantage of the non-USD or RMB bonds vs gold is the bonds are a productive assets while the gold is not.

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Explorer ○○○

Re: Buying gold?

I bought some krugerrands 39 years ago when I thought the sky was falling. My annual compounded gain has been 2.93%. If I adjust for inflation, my annual gain is .23%. I continue to hold them as a reminder that even disciplined investors have periods of temporary insanity. 

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Frequent Contributor

Re: Buying gold?


@Saltydog wrote:

I bought some krugerrands 39 years ago when I thought the sky was falling. My annual compounded gain has been 2.93%. If I adjust for inflation, my annual gain is .23%. I continue to hold them as a reminder that even disciplined investors have periods of temporary insanity. 


You bought in 1981 ... didn’t gold climb to a ridiculous, all-time (inflation adjusted) high around then? You’re lucky that your CAGR is even positive.

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