What to buy ?

I cashed - in a Roth IRA and want to convert to PM. I have 100 ASE's & I'm totally confused on want to buy; gold, silver, platnium, pork bellies ?
Need a Guru.

 

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im no guru but i would invest in gold it takes up less space and based on last year it went up a few dollars from jan-dec where silver went down.. i dont know much though, i dont have any bullion coins except copper.

cody

 

I am going to assume this is discretionary spending. If you already have 100 ASEs, go with gold (AGEs would look really nice next to the ASEs). . TC

 

I like silver based on a number of factors. The amount of silver available today is at its lowest level in centuries, and I am in the camp that the historic gold/silver ratio of 15:1 will see an eventual return to prominence. Today the ratio is 55:1. The reason I think as much is because the price action today is dominated by paper traded contracts, not the physical market, and that is a temporary situation because it cannot last indefinitely. Time is the wildcard IMO. Also, due to a phenomenon called epithermal deposition, silver is becoming more scarce beneath the ground. World mining numbers indicate the ratio of gold to silver coming out of the ground is 7:1, not the historic 17:1 ratio which supports this. The concept behind epithermal deposition is that when the planet was formed, due to the melting point of silver most of the silver rich veins were formed near the surface of the Earth's crust, and therefore mines must spend more on energy to go deeper into the ground to get less and less silver. According to Eric Sprott, in the physical market gold and silver are selling at about the same rate from a price standpoint, so silver is disappearing from the market much more quickly. Not only that, but it is largely unrecoverable due to being used in so many small applications such as gadgets (which can be recovered, but it's not cost effective to do so in most cases), and the countless uses for nanosilver which cannot be recovered even if it were desired. Industrial demand for silver is also growing, and the solar panel industry is more than offsetting the lack of demand in the photography industry.

All this being said, I think gold is a wonderful investment as well. Central banks have been buying, and China's gold imports are skyrocketing. In the 3rd quarter of 2011 gold demand in China eclipsed all 2010, a record year, at over 400 tons in 2011. Plus over 100 tons of that was imported in just November 2011. They have also made gold exports illegal, and have had advertisements on state television for a couple years now encouraging their citizenry to buy. Also of note, the Pan Asian Gold Exchange will be opening up in June 2012. This will not only open up the entire massive population of China to buy precious metals with the click of a mouse, but the paper traded contracts on this exchange will be fully backed at a 1:1 ratio by physical metal, unlike the COMEX which is leveraged around 50:1 paper to physical, conservatively. So even if Chinese citizens do not provide the expected boost to demand the exchange alone will bring an end to the paper market manipulation we are currently experiencing by offering a sound alternative.

Due to all of these factors I expect gold to have a record year in 2012, but I expect any gains in gold to be eclipsed by silver. It will be a bumpy ride though, so if you don't have the stomach for it then maybe gold would be better suited for you since it tends to not move as violently as silver. I also like platinum due to being less expensive than gold, but it is an industrial metal and could potentially continue to move inversely to gold, where as silver is a dual role industrial and monetary metal, and will follow gold more closely.

A word of caution, there are a lot of fake silver bars going around right now, specifically Sunshine Mint bars and Pan American bars. Many of these can fool magnet tests and weight tests. You can mitigate this risk by buying directly from the mint that produces the bars, or by sticking to government issue coins which can be more easily verified with a set of calipers. 1 oz coins are my preference for this reason, as well as that 1 oz in general is a nice liquid amount for bartering should there ever be a need for that. That's another reason I like silver over gold, is that if you were to ever need to barter with it you won't want to be spending a whole ounce of gold at once, and to get fractional gold you will start hitting some high premiums.

 

Silver till the day I die. ASE, Buffallos, and Maples.

 

No need to be confused.

From my Boss Gold topic. Since I posted this, gold continues to move. Silver, well, not really.

 

Silver buffaloes?

 

silver

 

I swear I'm not trying to be a smart-@ss, but did you do this math for 2010? Or for a 5, 10, or 20 year trend? I wouldn't use one year as a basis for an investment strategy.

To the OP - I would diversify if you are looking to hedge your bets. I don't know how much you have, but you would be wise to get some 90%, some Morgans, some .999 government silver, some old US gold, some Buffalos, some fractional. Essentially cover all your bases.
I'm not sure about the pork belly comment. If you really want to diversify away from the regular stock market, you can easily get a REIT fund and a commodity ETF to add some other ones into the mix.

Obviously, no one here has the answer. But, the one thing you can count on is HIGH Beta (volatility) if you put all your money into one investment or asset class. When you buy only one (gold, silver, Google stock, etc.), you have a chance for higher returns and also higher losses.

There is no way to avoid risk when you seek return.

Good luck!

 

Gold has done alright by me. I don't know anyone with gold, complaining about their gold either.

The point of that chart is to prove that gold and silver are not equivalent investments. One doesn't follow the other though I've heard this often here from people who buy silver. The math easily disproves this equivalency which often isn't presented in that easy to read form.

 

I am not sure why a person would do this ~ cash in a nontaxable gain instrument like a Roth IRA to buy PM where any gain would be taxable. You can hold PM in a Roth IRA, and also use other instruments to hedge that when PM are not doing as well as other financial moves. You already paid the taxes once on a ROTH, when the money was put in after taxes, so why not use that advantage. I hope it wasn't just to fall to the overhyped bullion market.

Jim

 

I'd say, it depends on your age really. Are you retired now? If so, perhaps go with gold or silver. If you're not retired and depending on whether or not you have more investment accounts that aren't necessarily PM's, then I'd say go reinvest in something else since you currently have a nice little silver stockpile with your 100 ASE's and perhaps talk to an financial planner or adviser on the best course of investment you should make depending on your current portfolio.

But desertgem brought up a good point as well, a ROTH IRA is really what you should use to live off of once you reach retirement with perhaps no other income, it's taxes have already been paid.

 

you my want to use the $ as a down payment on a rental property (depending on where you live). you can get a house for $15K down with a payment of $350 per month and rent it for $700 or $800 a month. Many families are looking for rentals and the prices and interest rates are very low.

 

+1

 

To the OP, what are you trying to accomplish, exactly? You cashed in an IRA because??? You want to invest it in PM's because??? You're not sure which PM's to invest in because???

 

I did this in 2008 and have more than doubled the value of that money. If you don't hold it you don't own it. Paper is paper, not PM.

 

C'mon fatima. Gold is up just over 600% since 2000. Silver is up 650%. They move together. I know that you know better than to look at one year as a definitive indicator.

 

I haven't looked, but I trust you. I think it behooves the investor, if prices in 2000 is important to them, to first determine if what drove prices at that time, still applies now, 12 years later. The stock market did quite well until about 2000 but anyone who held money from that time has lost out, big time. One always has to look at where and investment is going and not where it's been.

 

I don't know if it's a good investment, but I just like saying...

Rhodium Sponge

 

Pork Bellies:yes: