investing in Gold and Silver?

Discussion in 'General Conversation' started by dinkbuster1, May 14, 2008.

  1. dinkbuster1

    dinkbuster1 New Member

    Messages:
    2,272
    State:
    Ohio
    i want to start investing in gold or silver or both here really soon and would like some imput from anyone who might be an expert in precious metals. for as long as i can remember i have never seen gold, or silver drop in value more than a buck or two, it has always been on the rise. figured it would be better acquiring precious metals rather than stashing extra money away somewhere seeing how the dollar keeps falling and how the stock market is lol. i recently closed out and withdrew a bunch of money out of one of my retirement accounts due to it losing a massive amount of money this year already,(a low risk account at that!), i used most of it for a down payment on a new house. i have some gold and silver already but would like to start adding more (havent bought any in years) out of each paycheck if i can afford it. my goal to get started right now is purchasing silver coins, like the American Eagle, Canadian Maple Leaf, or whatever coin from whatever country where i can get the most "bang for the buck" for the value of the silver and/or gold. would it be wise to purchase "token coins" that are much cheaper rather than standard Mint issued coins with the same silver amount? i stopped by a "coin store" today to pick up some cases for old paper money and chatted with the dealer for a few minutes on the subject, but as with any "dealer" it seemed he was just trying to convince me to buy the most expensive coins he had.
     
  2. Mac-b

    Mac-b Moderator Staff Member Supporting Member

    Messages:
    19,253
    State:
    North Caro
    Brother, gold and silver investing is like riding a roller coaster, it is not for the faint of heart. Back in the 80's I bought silver bullion for $6.00 to $8.00 an ounce. It went to $10.00 an ounce within a year or so and then dropped to $4.50 an ounce and stayed there until several years ago, it is now around $16.60 an ounce. It has taken silver bullion 28 years to double in price. Same thing happen with my old vintage silver coins and gold coins. Some of them are not worth what I paid for them in the 80's. You would/could make more money buying a CD at your local bank or savings and loan. Or you could buy a Mutual Fund that invests in gold and silver. Think twice about your approach to investing.
     

  3. oh no

    oh no New Member

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    11,108
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  4. jeremiad

    jeremiad Well-Known Member

    Messages:
    2,207
    State:
    Virginia
    Silver is indeed a roller coaster in that the factors that affect the price of silver are hard to bound.

    Gold is not so difficult. Gold prices are tracking quite well, to the point that you can watch the price of gold dip on down-market days due to sell-off (brokers selling gold to cut stock-market losses) then rebounding the next day. You can watch its value fluctuate in keeping with the US dollar growing stronger or weaker. Gold is currently in a lull, holding steady at around a good $840/oz; expect it to move on up.

    Watch who you choose to purchase gold from. I have had good experiences with Blanchard simply because they are up-front with the costs, and are quite reasonable in their bullion pricing compared with other dealers. Watch out for Swiss America...extremely expensive and oppressive and misleading and...

    Also be careful about investing in the "Numismatic Gold Market." This is a big profit maker for many of the gold dealers out there. There is no such thing anyway. "Numismatics" is the hobby of collecting money, and has nothing to do with "market." Numismatics is a fascinating hobby, one in which you can gain great knowlege and pleasure, but do not purchase any "old gold" until you have completed your homework...several semesters' worth! I now purchase numismatic gold through auctions at a great discount. I like doing business with Rare Coin Wholesalers, a dealer of outstanding coins for reasonable prices, if you can afford them. Be careful no matter though--this is a sucker's sport!

    Watch out for state sales tax, and federal capital gains taxes. Unless you are fortunate to live in certain states that do not tax gold purchases, you will pay the hefty mark-up on what you buy. Many break the law, but...

    I don't like Gold ETF's...they usually come with very high costs for "storage" and other incidentals. They also throw in mining investments at times, which I consider far too risky; read the prospectus thoroughly. Besides, one of the great joys of gold ownership is in possessing it and knowing that it is there when you need it.

    Some push gold ETF's because of the "problem" of safely storing gold. However, don't forget your local bank. I discovered that my local bank offered an "elite" plan that provided safe deposit box rental for under ten dollars a year; not a bad price for a good place to store some coins and vital papers too!

    Never think of gold investing as a way to get rich quick, as Swiss America and other similar companies would have you think. I won't call them shady outright, but they are the ones getting rich, not you!

    Gold ownership is insurance. As the dollar loses value because it is no longer tied to the gold standard, gold holds its value. Consider it a long-term investment that may or may not double its value, but will certainly remain valuable well beyond your lifetime.
     
  5. dinkbuster1

    dinkbuster1 New Member

    Messages:
    2,272
    State:
    Ohio
    the above reason is why i want to buy and keep precious metals, not to get rich but to just have some "insurance" that doesnt lose too much value, if not go up in value. so i take it Gold isnt as risky as Silver? i may just go with Gold only. thanks, very informative so far!
     
  6. Phil Washburn

    Phil Washburn New Member

    Messages:
    7,680
    State:
    Shawnee OK
    real insurance is investing in God
     
  7. jeremiad

    jeremiad Well-Known Member

    Messages:
    2,207
    State:
    Virginia
    The spot price of silver tends to be more volatile, which is the main reason a lot of dealers push it. Think of gold as a blue chip stock company and silver as a small cap. investment.

    Ultimately, some would argue that there is no risk in owning precious metals; the risk is in how much you pay for it! The following example is sure to make you think (from Wikipedia):

    Before the Hall-Héroult process was developed, aluminium was exceedingly difficult to extract from its various ores. This made pure aluminium more valuable than gold. Bars of aluminium were exhibited alongside the French crown jewels at the Exposition Universelle of 1855, and Napoleon III was said to have reserved a set of aluminium dinner plates for his most honored guests.

    By the way, I agree with Phil!
     
  8. plainsman

    plainsman New Member Supporting Member

    Messages:
    7,187
    State:
    minnesota
    My advice is not buy what you can't afford. Only invest what you can afford to lose. I bought some on margin once. When it went up enough to make a quick buck I sold it. Didn't make much on it because of fees and they told me they couldn't get it sold right away and the price was down by the time they found a buyer. One thing I noticed is that the more advertising there is claiming it is a good investment and how ya gotta have it to keep up, the more likely it is to soon drop in price. But held over a long time I think it could be a good thing if you only buy what you can afford, and actually have possession of it. I don't recommend buying (paper) gold or silver.
     
  9. olefin

    olefin New Member

    Messages:
    3,908
    State:
    Texas
    Mike, one the best investments we ever made was a sizeable quantity of American Eagles purchased in 1999 at around $290 oz. (today's price is $937 oz.). We sold our Eagles last year. :sad2:

    We purchased through Monex. Never had bought gold and was very surprised that it was shipped regular insured mail.
    You can also purchase and Monex will hold the gold. That way you save the cost of shipping. But when we purchased there was a lot of scare stories going around on what might happen in the year 2000. And we wanted the gold handy like in our banks safe deposit box.

    Today we wish we had not sold the Eagles but we can't complain. :big_smile:

    I wouldn't buy gold at today's prices... but who knows?

    Good luck!
     
  10. alands94

    alands94 Active Member

    Messages:
    1,706
    State:
    Lebanon, I
    I've bought some gold and silver over the years, primarily as a hedge against the stock and real estate markets. Although my gold coins have nearly quadrupled in price since I bought them, I'll keep hanging on and see how high they go.
     
  11. Bobpaul

    Bobpaul New Member

    Messages:
    3,039
    State:
    Supply NC
    Gold took a 20.00 jump Friday.

    If it gets down again into the lower 800's, it might be a good time to grab some. It'll hit well 0ver 1000.00 again soon.

    I like to go out and find my own. Way cheaper, and a lot more fun:smile2:
    I can buy all the equipment I need to harvest my own gold, for the price of an ounce.