Is buying GOLD a good investment

[onlyhumanme]

you dont want to be a bull or a bear but a realist looking at it with A balanced mental approach is always best.Its foolish to think gold will go up forever without any downward gyration unless its going parabolic which means lifes about to get tough for everyone.

Its also foolish to think realestate is a safe investment from inflation when monetary metals will out do realestate and thats how paris hiltons grandfather brought the first hotel with a gold coin tip he recieved as a bell boy in the hotel before hyperinflation.

both investment classes have strengths and weaknesses and smart investors manage their downside risk and manage their emotions as thats all you really have control over.

I guess we also should remember that the way we get silver gold and diamonds is quite sad sometimes poor people and children work the mines or we have massive open pit mining contaminating the water it really is mans mad obsession.

happy investing..

[Dr. Shane]

Hey, Mr. Bravus! You are starting to sound like someone hit you in the head with a Dave Ramsey stick. Too much common sense in that last post.

[lazarus]

Nope, because taking inflation into account that is a very low rate of return compared to other investments. Same actually applies to gold.

Here are a couple of articles that dispute that. (about Gold that is)

http://seekingalpha.com/article/179444-gold-best-return-for-the-decade

http://www.reuters.com/article/2009/12/31/us-markets-precious-idUSTRE5B10OV20091231

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1. Buying *any* commodity at record high prices is not good investment: it's likely to recede from those records as the economic cycle changes. Buy low, sell high, not the reverse.

Sure. The skepticism about gold is precisely because its breaking records all the time so it must be hitting its high.If the economy (US) is about to turn the corner then of course gold may not be a good prospect. If however the economy is headed for further deep trouble then gold prospects look different.

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'The fundamental things apply, as time goes by...' and a diversified portfolio of investments is one fundamental that continues to make sense. The economic cycle means one rises as another falls, so spread the risk across commodities, stocks, real estate, bonds and cash - and avoid debt like the plague it is.

Agreed. I haven't been saying that gold alone is a good investment. I have been saying that gold is has/is a good investment. I have a 403b but I'm highly skeptical of the conventional wisdom.

Here's a bit from the Dave Ramsey show to chew on. I like Dave Ramsey, I have followed some of his advice but like all of us he gets some things wrong.

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[Dr. Shane]

Here's a bit from the Dave Ramsey show to chew on. I like Dave Ramsey, I have followed some of his advice but like all of us he gets some things wrong.

A little long but a great clip. Dave hits the nail on the head there. He was probably a little too kind to Glen Beck but they both work for FOXNews so I guess there has to be some professional courtesy there. To Glen Beck's credit, when he talks about gold he refers to it as an insurance and doesn't go so far as to say it is a good investment. I think he realized that he stands to lose a lot of credibility with such an outlandish claim.

[lazarus]

A little long

???

Quote:

I think he realized that he stands to lose a lot of credibility with such an outlandish claim.

Glen Beck makes his money making outlandish claims. Glen Beck certainly can't afford to lose more credibility. I really don't think Beck makes the verbal distinction between good investment and hedge. I'm actually sure he says its a good investment. There are scam artists that seek to make money off good investments. In fact the company that Beck promotes is really a rip off that charges high premiums and even if gold makes money you'll lose money.

Clearly Peter Schiff is not stupid. The stock market did crash! Schiff was not predicting the end of the world. His hypothesis and conclusions are more sophisticated than that.

It's interesting what Ramsey says, "Microsoft, closed, GM and Ford closed...." he proceeds to dismiss that as a fanciful prospect. Who suggested that? Take an extreme position and proceed to debunk it is a effective but disingenuous tactic.

[Dr. Shane]

Clearly Peter Schiff is not stupid.

Peter Schiff is CEO of Euro Pacific Precious Metals. He sells gold and silver. Obviously he is going to promote the purchase of gold and silver.

Ramsey is right. If and when the stock market collapses, the whole country will be collapsing. Not only will stocks be worthless, gold isn't going to be worth much either because we can't eat it. If and when that doom's day comes. What will be valuable is non-perishable food, seeds, alcohol and tobacco. Those are the best commodities for bartering. A gallon of pure water was worth more than an ounce of gold in New Orleans after Katrina blew through.

[Gordon1]

Gold isn't going to be worth much either because we can't eat it. If and when that doomsday comes.

Agreed Shane.

That day is coming. These investments & retirement plans will disappear into thin air. But the real danger is social breakdown. Others will kill to get your stuff if they are hungry enough. That takes about two or three days.

Get out of the cities. If that sounds weird, then so does Ellen White. She warned against speculation - simply because she knew it would be an idol which would perish, all the while others go hungry. There's no Bible counsel to entrust money to the non-believing crooks who run the markets. Goldman Sachs has probably spent it already. Can you prove otherwise, or is it truly liquid - in your pocket tomorrow??

[lazarus]

Peter Schiff is CEO of Euro Pacific Precious Metals. He sells gold and silver. Obviously he is going to promote the purchase of gold and silver.

He sells foreign stocks, mutual funds etc. but I guess you missed that.

The question is , however, was he right in terms of his perspective on the US and world economy? Clearly he was.

Time will tell as to what happens with Gold. If you believe that our current situation is part of the rhythm of the economic cycle then stick with the convention wisdom and keep looking for the green shoots of recovery.

[fccool]

Dave, Dave ...

A stock market crash is a sudden dramatic decline of stock prices across a significant cross-section of a stock market, resulting in a significant loss of paper wealth. And that's exactly what happened when it bottomed out at 7k. It has nothing to do with "end of the world".

One of Ramsey's problems is being expert in framework of how things worked in this "magic" economy, where you can just sit around and get rich. We won't have that anymore. Things are about to turn pretty ugly. If you have bunch of money saved up... I'd certainly keep at least 15-20k in precious metals. If you won't gain much, then at least you'll keep some of it.

Trust me... it's coming from a guy who seen people's life savings devalue to the point where they could not buy a loaf of bread with it.

[Dr. Shane]

Dave, Dave ...

A stock market crash is a sudden dramatic decline of stock prices across a significant cross-section of a stock market, resulting in a significant loss of paper wealth. And that's exactly what happened when it bottomed out at 7k. It has nothing to do with "end of the world".

I don't think Dave Ramsey would disagree with that. His point is that as long as corporate America is still alive, the stock market will grow over the long run. My portfolio was down 27%. Last I checked it, it is now up 13%. That is the very same portfolio. I haven't added to it or sold anything. All of my "paper losses" we just that. They only become real losses if I sell when the market is down.

[fccool]

In that case, I did not really gain any weight since college using the same mentality. It's only a weight gain if I stop exercising.