Gold or Silver prices, what will make the prices go up?? Did we top out already?

Except your exact argument was made in the early 80's that one of those two things HAD to play out, and they didn't. People railed about the debt, and said only pm would save them.

Maybe it will play out that way, but do not risk your future on saying it HAS to. No sir it does not.

Btw, holding silver from the early eighties to 2000 it might as well went to zero. Almost all purchasing power with pm was lost.

Edit: By the way, Inflexion knows this, but I am not really arguing with him about his decisions. I am more posting these counterarguments for others to read and make up their own mind. I have no issue with his position, its his decision to make, I just try to put out there the opposing view for others to consider.

 

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This is the absolute worst reason for holding precious metals, and I see it repeatedly. What if you lose 50%? No problem, it can't go to zero. What if you lose 75%? No problem, it can't go to zero. What if you lose 90%? No problem, it can't go to zero. Most people want, or should want to choose investments based on earning a rate of return over time. The overconfidence that comes from holding something that will retain at least some value over time is the enemy of success. Precious metals should be held because the investor believes they will outperform the other available choices; not because there will be at least a few crumbs on the table.

 

I agree. What's the point of PM's anyway? I like them in coin form because there may be some numismatic bounce. I am only mildly numismatic, and I like the old stuff, but I will part with my PM's when the time comes no problem. I am not buying right now, because I'm not sure which way its going. As soon as it looks like they are going up, it's time to buy again. In 5 years or so, it will be time to sell.

 

We had QE in the 80's? It's a similar, but not the same argument. The caveat is whether the USG will cut spending. We have seen by the fiscal cliff they will not. Every time they raise they debt ceiling they are communicating that they cannot pay off their debts. You may think this can go on forever, but I know that it cannot. One of the two scenarios will definitely play out unless something in Washington changes, the only question is when. And it is highly unlikely they will change their tune since now the majority of registered voters are dependent upon free handouts. The writing is on the wall whether you see it or not.

 

Funny, it's the only reason I hold them. As I've stated my primary goal is not to profit, rather to be protected by holding something that has value because of what it is, not because of who promises that it does. That is the fundamental difference. If you think it's a bad reason to hold, that's fine. I don't. You may trust that financial markets are safe, I don't. I have seen flash crashes and MF Globals and front running. You may trust that a company's stock will thrive in an environment that suffocates free markets, I don't. You may trust that bonds will not receive a haircut, I don't. There is no requirement of trust for precious metals, because there are no promises involved. They function inherently because of what they are. I do not use these as justification for why I hold metals, these are the reasons that drove me into metals because only metals are safe from all of this. It's not about investing. It's about not getting taken for a ride.

 

Duplicate.

 

Well, the metals are not safe from confiscation. They are not safe from search and seizure. They can also be lost to theft, fire, flood and earthquake. The price can drop substantially and stay down for longer than your lifespan. Safety is an illusion, and a dangerous one.

 

There is not one investment in the world that is safe from any sort of risk. (not saying that you dispute this, just adding an additional point)

 

True, metals don't protect against everything. I am diversified for safety. I hold metals to protect against cronyism. You can use any of the various methods that are susceptible to cronyism to have added safety, but they are all at the mercy of things that metals aren't, and vice versa. I guess it depends what one considers to be the greater risk. I prefer to put the majority of the risk in my own hands instead of someone elses because I am more confident in my own abilities and most importantly motivations than someone behind a curtain.

 

Here's a balanced article, with asset allocations and bearish take on miners (if you factor all that debt) :
http://www.theglobeandmail.com/glob...antage-of-lull-in-gold-prices/article7030943/

POG will go lower; agree w/ Marc Faber and we may see $1485 by April or July.
I also suppose 2013 will look like 1975 (DOWN - 20%) or 1976 (-25% Drop, through August, with 3-4Q recovery.)

 

OMG! He works for a fund that charges a 3% management fee! That is the highest fee I have EVER heard of! No wonder the guy is out pimping himself to any news article writer he can get to listen. 3% is a scandalous management fee rate.

I read gold is down 8% from last fall, so if you an investor of this man's fund you lost 8%, plus about 2% due to inflation, plus another 1% lets say from management fees, (one third of 3%). So, an investor in his fund would be down about 11% in a few months at this point if they invested last fall, (when a lot of people around here were screaming that you need to buy gold). NICE.

Don't forget that this year gold has to go up about $60 just to stay even with inflation, (ignoring storage charges). Every year, $60 is not a "profit" at all, but just staying even, (not even counting taxes, which would make the figure more like $80 a year increase needed). So, if you include taxes, gold has to be about $2050 in 5 years to break even, THEN you can talk about profits. Maybe it will, but to add on top of all of that ANOTHER 3% you would pay to this fund manager, and the deck VERY QUICKLY stacks against you.

If you want to invest in gold, I would say buy gold. Stay as far away from a 3% management fee as humanly possible. That rate is downright usurious.

 

You're ignorant and uniformed, too?! There are +1,800 MF & ETFs in the USA charging >3% in fees/cost. And the number of mutual funds abroad, maybe 2x - 3x higher?


Among active money managers, ~3% is high-ish but not outrageous. Faber's one of the best; but you get what you pay for.

 

Do you work in this field? 3% is not outrageous? You must be getting money in your pocket to state such a claim.

I said that I had heard of. Do I research vastly overpriced mutual funds? No, I don't. Do I allow them to be offered in our 401k at work? No, no I don't. I KNOW full well the power of high fees to DESTROY returns long term. Do you know about 80% of all active managers return LESS than index funds after fees? That is a little tidbit the money managers don't want you to find out.

Where did that graph come from? Not from a listing of ALL mutual funds, as there are more than that out there by a long shot, MOST of the others would be WELL below 3%

Calling me ignorant? Really? "Ignorant and uninformed" you believe is really conducive to conversation?

BTW, "get what you pay for", yeah, that about sum up the value of your advice "Juan".

 

If you've never heard of a fund charging >3% in total costs, you're ignorant and uninformed. And you call yourself a PROFESSIONAL? Do your homework on MStar, next time.
http://blog.newconstructs.com/2011/10/28/total-annual-costs-methodology/

 

...and its off to the ignore list you go. There has only been one other CT user on my ignore list, and I am relative sure "Juan" you know EXACTLY who that is.

 

Ohhh, that hurts. On the upside, this means you won't clutter my OPs with more useless, off-topic or digressive replies. THANK YOU! :smile