Anyone buying gold?

[StormRichards]

[Sam1000]

I’m sure people do, but they are fools for doing it. How do I know? Because I used to! Gold and silver are not an appreciating asset, they are a fluctuating asset and can go up and down in price dependent on supply and demand. I haven’t followed long term trends in either from an investing standpoint, but am reasonably certain that if you factor in inflation and the cost of storing it then it’s not that great a store of value unless you somehow get very lucky and buy low and sell high. My own experience from collecting gold and silver coins bears that out.

In all honesty you would be better served investing your money in market index funds or stocks as you will get a better return on your investment. Speaking from my experience in gold and silver coinage, gold and silver are a terrible store of value. When I consider what I paid for the overwhelming bulk of my collection and index it for inflation, what I would get for selling them was a staggeringly bad return on investment…it’s a loss. That’s why I’ve been parting out what I have for some time now.

[Kuznec]

Investing in gold is the biggest fraud in the history of mankind. Money should not be saved, they must multiply, otherwise the whole meaning of money is lost.

[Spiffster]

Yeah I was buying Gold and Silver regularly for around five years. I have since discovered far better investments. Income that was earmarked for Gold now goes mostly to p2p lending.

[Gailete]

I have never understood the concept of buying silver and gold. In the event of some catastrophe, people would think that gold would be precious, but how do you make change with it. Do you turn over an ounce of gold to someone in exchange for some carrots, potatoes, and 6 eggs? How does the farmer figure it out and what does he do with the gold he is collecting. Gold and silver are not our money systems at all, anymore than say bitcoin would be if all the computers crashed. Commerce will be most likely via the barter system. So if you really want to be a rich man, invest in toilet paper! Salt, Pepper (although it has a shelf life), invest in how to books, tools and the like.

If you are investing in gold as an investment, not for the end of the world strategy, then you still have the same problem, only some folks will be willing to take in trade and give you its fair dollar in the trade. It can fluctuate so quickly that someone whole takes it in trade my find themselves with a near worthless asset by the end of the week.

I remember at one point many years ago, gold had gone up really high and my ex and his folks were talking about it. Apparently some guy was coming to town and would buy their gold. So they pulled out everything they could find that might be part gold and went to make their fortune. I remember my MIL wanting to sell her wedding band! I couldn't comprehend it then and still don't. They weren't starving, her husband had a decent job, they had a roof over their head, and yet she was so desperate for money that something that should have held great sentimental value if nothing else, she was willing to part with it for some money that she truly didn't need. I could understand it if that had been the only way to keep the roof over their head, but chump change - NO. I guess I have never been one for 'gold' since then.

[james.hendrickson]

Yeah I was buying Gold and Silver regularly for around five years. I have since discovered far better investments. Income that was earmarked for Gold now goes mostly to p2p lending.

Spiffster, its a bit off topic, but what platform are you using for P2P lending? I've got about $2,600 in Prosper.com but would love to explore some of the others as well.

[Nutria]

If by "buying gold", you mean "two 5 gram bars 2.5 years ago, for the novelty of 'owning gold'", then yes.

[msomnipotent]

I buy on occasion. I haven't bought much in the past year. If you lose money on precious metals, you are doing it wrong. Just like stocks, buy low and sell high. If you plan on buying only to make money, you need to be as educated as a commodities trader or lucky. If you sell when you would lose money, that is on you. I have only sold our metals on one occasion, and that was because we were flat broke. We still sold for a profit because we bought wisely. Otherwise, we plan to hold on very long term or pass it down. We tend to buy graded coins instead of bullion. It is easier to know what you are getting and easier to sell for a profit. I would love to rebuild our collection, but prices have not been kind for a while. We hardly have anything now.

From what I understand, preppers buy gold just so they don't have to walk down the street with a wheelbarrow full of money to buy bread and milk during extreme inflation. It has happened to several countries in my lifetime, so I don't dismiss that it could happen to me. I just don't think it is a great possibility. There is a book and probably videos from a guy called Ferfal that explains in great detail the how and why you use precious metals during a financial collapse as he has suffered through one.

[colby99]

Buying gold makes a lot of sense to me, it is a hard asset, with maximum privacy, no counterparty risk, very liquid, and very portable. Gold is considered real money, real money is a store of wealth. Currencies are not wealth, but simply a mechanism for the exchange of good and services in the present.

I think of buying gold 1st as an insurance policy. It’s no crazier to prepare for the possibility of a financial crisis then it is to buy life or car insurance. You hope you will never need it, but you’ll be glad you have it in the event of a crash. Precious metals are simply financial insurance. Essentially buying insurance but with one exception: you have the asset, not a policy which is subject to a company's management or mis-management! And 2nd as investment or profit.

[Gailete]

From what I understand, preppers buy gold just so they don't have to walk down the street with a wheelbarrow full of money to buy bread and milk during extreme inflation

Maybe I'm missing the bigger picture, but during the times outlined above, how is the price of a loaf of bread measured in gold? If you have, say an ounce of gold, how would it get broken down so that you can buy your bread and milk and have some left over to get a pair of shoes elsewhere? To me, gold unless doing it for an investment, doesn't sound very practical. I'd rather have warehouse full of toilet paper and possibly paper towels for those folks that buy an 8 pack every week or two. Then you can use the barter system. Of course, anyone thinking ahead to stockpiling toilet paper would have also stockpiled a bunch of other stuff, so instead of some gold they have items to use and to barter with. They would also most likely have some really good books on dealing with the collapsed economy as well as living off the grid so to speak. They have educated themselves to deal with dreadful times.

[Nutria]

very liquid, and very portable.

Bah.

It's heavy, and who'll buy it quickly besides jewelers and pawn brokers. And guess who won't be buying much gold at "fair market prices" in a SHTF EOTWAWKI scenario? NONE. That's how many.

Gold is considered real money

Stop living in the 19th century.

[greenskeeper]

G/S ratio

Silver has the bigger upside

I've been purchasing routinely since 2003

[msomnipotent]

Maybe I'm missing the bigger picture, but during the times outlined above, how is the price of a loaf of bread measured in gold? If you have, say an ounce of gold, how would it get broken down so that you can buy your bread and milk and have some left over to get a pair of shoes elsewhere? To me, gold unless doing it for an investment, doesn't sound very practical. I'd rather have warehouse full of toilet paper and possibly paper towels for those folks that buy an 8 pack every week or two. Then you can use the barter system. Of course, anyone thinking ahead to stockpiling toilet paper would have also stockpiled a bunch of other stuff, so instead of some gold they have items to use and to barter with. They would also most likely have some really good books on dealing with the collapsed economy as well as living off the grid so to speak. They have educated themselves to deal with dreadful times.

From what I understand, it would be the same as it is now only with much higher prices. You can look up the spot price of metals and exchange the value of paper money. Chances are, if you really are paying with gold just so you don't have to have a wheel barrel full of cash, you probably won't get much change back. Ferfal explains it in a much clearer way. I only kind of half paid attention because I'm not a prepper. I was researching ways to get out of debt when I came across his book. I don't expect it to happen to the US, but I wouldn't be surprised. All you need to do is google "countries with hyperinflation" to see how many countries it is affecting right now. It isn't just undeveloped African countries. Japan was on the brink not that long ago.

The problem with relying solely on bartering is that you eventually run out of things to barter. Hyperinflation doesn't disappear overnight. Toilet paper can get wet. I don't know anyone that wouldn't accept wet gold, and you can buy a lot more things with gold than you can with toilet paper. But yes, the preppers I know store a LOT of TP, too! I'm a "find it cheap and stack it deep" kind of person, but I'm not buying a bunch of plastic containers to store TP for armageddon.

[msomnipotent]

My reasons for not seeing gold as an investment are straightforward. Unlike a bond, the metal pays no interest. There is no dividend. It may not protect you against the worst forms of inflation, which are often in health care. And there is no implicit guarantee that it will appreciate in value.

The same thing can be said for most stocks. I wouldn't be where I am today without stocks or precious metals.