Buy silver or gold with $5000?

each year, each month there's "talk of a big correction"

it just depends when you hear of the "experts" talking, and whether you do anything or not.

 

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For instance ....
“With the [global] stock market continuing on to new highs with no sign of a 5% pullback, let alone a correction, ‘equity greed’ is funneling risk assets into the stock market and away from fixed income and commodities,”

from
https://www.marketwatch.com/story/h...er-defied-the-2017-commodity-slump-2017-12-15

What I always tell people is research BOTH sides of an issue. If you want to look for an answer based on your preconceived notions then you will find whatever you want. If you put as much effort into researching the OPPOSITE viewpoint that you have you'll find that too.

 

There is no way to predict a stock market correction, much less say that one is looming. The only halfway widespread prediction I’ve seen is that the United States will enter a normal, cyclical recession either in late 2019 or early 2020.

 

"So much talk" is so much talk.

No bull market or period of economic growth lasts forever. So, yes, corrections and recessions are in our future. What no one can tell you is when it will come. If they could, they'd be busy trading LEAPs or using other derivative instruments to cash in on it rather than posting here or selling their advice.

I'm fine with people having "some money" into precious metals -- I certainly have. But I consider it a reserve rather than an investment. My own guess is that gold is fully priced, platinum is underpriced, and palladium is overpriced. I have no idea about silver -- I was a buyer at $22/ounce and have paper losses to show for it. But the only advice I will give is to do you research and not to take investment advice from random internet posters.

You may safely assume I'm a random internet poster.

 

Good advice, just go with your gut ! after all everybody is a speculator just like you

 

If you want to put some investment money into PMs and think that is a good idea, I’d suggest doing it on the relative merits you see in PMs and not because the stock market has gone X amount of time without a major downturn.

 

I know a person who buys a lot of gold at a shop that advertises that they buy gold also. He likes to talk about how much money he makes buying it and then selling it back. Also another person who is close to me told me that they thought now would be a good time to buy silver. Was just wanting to be less passive with my investing so doing research.
Also, the big recession around 2009 I did nothing. Just kept every investment which was mostly junk bond funds with Vanguard that I've done well with.

 

Good advice, thank you!

 

That seems backwards. If a shop wants to stay in business, they buy gold for less than they sell it for. Or am I misunderstanding?

 

Gamblers often like to talk, so here are a few things you can ask these people to start your research:

• In what form are you trading the gold and what is the bid/ask spread at the shop?
• How are you storing your metal?
• Do you think that the vanishing market for photographic film and the trend away from formal dining is fully priced into current silver prices?

Have you read Burton Malkiel's, "A Random Walk down Wall Street?" It's definitely worth the time of anyone thinking of becoming a more active investor. I'm not saying you should agree with him chapter and verse; but you should be able to explain to (at least to yourself) why he's wrong and to what extent.

 

No, I didn't make it very clear. He buys gold when it's low and waits for it to go up. He buys it at the same place he sells it to when it goes up. The shop buys and sells at spot, but I think the guy(not the shop) gets better deals because he's a steady customer. He talks about all the money he makes doing this. I've questioned him quite a bit. It sounds like he will hold it for awhile to make a profit.

 

Yes, but a very intelligent sounding random internet poster

 

Ah. So, he's fine, as long as gold goes up. One hopes he didn't do a lot of buying in 2012, or 2013, or 2014.

I also question his claim that the shop "buys and sells at spot" -- again, any business that wants to stay in business has to have a "margin" between their buy and sell prices. The dealer I sell to at shows currently has about a $20 margin between what he pays for a 1-ounce AGE and what he sells them for (at the same show). That's the lowest margin I've encountered; even huge, high-volume dealers like Provident are closer to $50.

 

OK I understand you desire to see what we would do with $5000 and if we would spend it on silver or gold or both; BUT why? If you took my recommendation on what to buy then you bought what I WANT...not YOU. Look, I know it's your money but at the very least, research what you like and buy it. Your the one that will have to live with that purchase. Just my two cents worth. Not trying to spoil your post and not in anyway angry or vindictive; but to me I would not be asking others what I want. I would be scanning the internet, coin shops, coin shows, etc. for what I WANT!!! Good luck on your final decision which by the age of this thread you have done a long time ago. LOL


Peace,

MJH

 

The original $5,000 thread is from 2011 when PM was at a peak. I'd hate to calculate how little that $5k would be worth today ... say 1/3 for silver .. so the $5k investment would be about $1,650 today.

ouch

but lately with the market fluctuations I can see buying gold .. and holding it for a bit then selling. I've been thinking of doing that with Platinum (though I like to just hold it LOL) because the swings lately have been fairly large. But the profit + effort for an ounce would be a lot; thus more ounces the better but that's a lot of cash to hold up in PMs just to try and buy low/sell high. I'd rather make money in the stock market.

 

In 2018:

For investing purposes, I would stick to ETFs in a Roth IRA. Buy $3000 of GLD and $2000 of SLV. This way, you can instantly buy/sell and have a low commission, no shipping/selling fees and figure out how to store physical metals.

If you're a collector, I would try to buy bullion with some numismatic value, such as pre-33 gold. If gold bullion dips, you'll lose out on "new" gold.

As others mentioned, try to diversify. Personally, I would not make collecting bullion and numismatics more than 5% of your total retirement portfolio.