GOLD in Mutual Funds, mainstream portfolios, asset-allocation, etc.

Discussion in 'Bullion Investing' started by Juan Blanco, Nov 13, 2012.

  1. fatima

    fatima Junior Member

    The prudent investor never keeps all their eggs in one basket or rather in the case of physical gold, in one place. Anyone indulging in the act of holding physical bullion already knows this. If not, then they get an expensive lesson. It's not really any different than those who put their faith in places like Enron, MF Global, Lehman Bros. etc.

    IMO, if you live in a flood zone and one subject to the follies of the Atlantic Ocean, might think a bit before keeping their stash in the basement. There are other alternatives.
  2. Avatar

    Guest User Guest

    to hide this ad.
  3. Cloudsweeper99

    Cloudsweeper99 Treasure Hunter

    I'm okay with storing PMs in a safe deposit box. Many people here and elsewhere are not, and prefer to keep their coins "safe" at home. That's what I'm referring to.
  4. Cloudsweeper99

    Cloudsweeper99 Treasure Hunter

    And those boxes, if kept at home, are vulnerable to theft, fire, hurricane, flood, etc... as I mentioned.
  5. Cloudsweeper99

    Cloudsweeper99 Treasure Hunter

    And each of those alternatives have their own problems.
  6. imrich

    imrich Supporter! Supporter

    There Virtually Isn't A Safe Haven

    P> I believe you'll find the same security concerns are true for electronic, paper, or physical storage of assets. I've lost far more in identity theft, firms filing bankruptcy, funds depletion, reverse stock splits, government confiscation by taxation/nationalization, etc., than I've experienced with physical robberies/incidents at home.

    P> The large safe deposit boxes at banks allow relatively safe storage of most collections, and collectors can withdraw portions as needed. I've also designed/created beneath ground and submersible vaults that are virtually undetectable, safe, and generally impervious to the ravages of man/nature for associates with concerns of security.

    P> I personally prefer physically held assets, but have diverse accumulations, many under the control of others. When governments gloat about the confiscation of sovereign nation assets, electronic destabilization of banking/currencies, and advocate "cashless" societies, I become perhaps needlessly concerned.

    P> As a past investor purchasing electronically controlled commodities, I know that to be one of the easier methods to deplete assets.

    P> I personally can't fathom a positive outcome for an investment in physical and paper assets intertwined, because of the varying distributive complexities.

    P> My educated East Indian and Chinese associates have attested to the logic of separate strong investment in physically held tangible, and electronic investments. I believe derivative type investments are a recipe for financial disaster.

    P> Your observations are valid, but from the perspective of an internationally experienced "Senior", I'm apparently more concerned (paranoid?). I'm wishing that your observations/projections are more realistic than mine. :thumb:

    P.S. I don't know what others viewed, but I viewed a continuous "rambling", contrary to the paragraphed separation of thoughts originally submitted.

    P> I'm thus trying to correct the "rambling" condition.
  7. Cloudsweeper99

    Cloudsweeper99 Treasure Hunter

    Everyone has to decide for themselves what they are comfortable with.
  8. Juan Blanco

    Juan Blanco New Member

    You may be correct and I'm as doubtful as you (about industry shills) but I do think she may be close.

    Re: :my guesstimate, "~25 million"
    I went to the LCS and spoke very frankly with a gentleman 50 years in the biz. I didn't give him my numbers or 'heads up' in advance; he told me "1 in 15" Americans are collectors.
    Boston dealer's professional opinion: ~21 mln, or (if Age 15 and Up only) ~16 mln. 'adult' coin collectors in the USA.

    To extrapolate, Ms. Deisher's estimate suggests ~9-12% of coin collectors are "serious" in her book. I don't think that's wildly inflated, do you?

    The easier (and less-loaded) question is probably 'what %age of coin collectors seem serious to you?' A harder question to answer (LOL) is 'what consitutes a serious collector?'

    I'm still stunned that 39% of "coin collectors" (those responding to the Epcot/Disney survey for the US Mint) see their hobby as an "investment."
    Investing time, sure. Now where's that awesome picture of the K-car in the bank parking lot, loaded with hundreds of coin-rolls .....

    My stats seem to confirm your opinion by implication. Unless ICI is deliberately hiding data, very very few US Households hold PM ETFs, anyway. It seems more likely there are millions of coin-collectors with MFs, instead.

    I do wonder if there's a market for real asset-backed investments - synthetic instruments that convert into real assets in a timely or scheduled manner. GLD does not except for certain very large participants.
  9. medoraman

    medoraman Supporter! Supporter

    Personally, to me there is a difference between money and "seriousness". But, in this context, I would say actively buying coins in the marketplace would have to be considered.

    To be fair, those who collect state quarters and other change from circulation are collectors, but to me a "serious" collector is one who buys coins on a continuous basis. I would look at ANA membership or membership in local coin clubs as a base, and multiply from there. I believe there are around 50,000 ANA members, (someone please correct me if I am wrong). If you assume there are 15 active collectors for every member of the ANA, (just a wild assumption), that is only 750,000 "serious" collectors.

    Yes, there are a lot of people in the US that inherited some morgan dollars, or grandpas penny sets, but if they aren't actively collecting and learning themselves, I would not consider them a "serious" collector.

    What is more depressing to me is I would say there are only around 8,000 serious collectors of ancient coins in the US, and I am not too sure if that number is too high. The Celator, (ancient coin magazine), has about a 2000 circulation, and many of those are overseas.
  10. Juan Blanco

    Juan Blanco New Member

    Do we have any idea how many retail bullionists and PM coin collectors (including ASE and modern 'Ag only') there are, currently? This would necessarily exclude the penny roll-hunters but not all 'junk silver chasers.'

    A low estimate for the high market, maybe? HA said 200k "serious coin collectors" in USA, 2010.
    "There are an estimated 200,000 serious coin collectors in the United States and more than a million casual collectors who spend about $3 billion annually, {Greg Rohan, president of Dallas-based Heritage Auction Galleries} said."

    A wildly inflated opinion, I suppose: "About 7 million to 10 million people in the U.S. are serious coin collectors, experts estimate, and many regard their collections as investments in the same vein as antiques, fine art and wine."
  11. fatima

    fatima Junior Member

    No. The smart physical PM buyer and many coin collectors keep their mouths shut about their activities.
  12. fatima

    fatima Junior Member

    I'm not aware of any gold vaults being flooded, but apparently the vaults of The Depository Trust & Clearing Corporation were flooded. LOL If you are not familiar with this company, this is where the real certificates of the paper trades are stored for a huge number of fianancial transactions of wall street. Apparently they are down there trying to dry out the paper.

  13. Cloudsweeper99

    Cloudsweeper99 Treasure Hunter

    The discussion or risk pertained to the idea of folks holding PMs in their own possession for purposes of privacy and to avoid the risk of letting others hold it. In that situation, the victims of Sandy probably lost their PMs, particularly in the wealthier communities like Mantolooking which have many year-round residents with homes that are now part of the bay.
  14. Juan Blanco

    Juan Blanco New Member

    I'll second your opinion for the safety deposit box and against holding at home.
    I've had this argument many times with prepper Gold Bugs on other sites (and I hear their fear) but won't bother to argue against that tree here. LOL
  15. Cloudsweeper99

    Cloudsweeper99 Treasure Hunter

    I would never suggest that a safety deposit box is risk free -- there isn't such a thing. But on balance there are far more threats to PMs at home than in a bank vault.
  16. medoraman

    medoraman Supporter! Supporter

    I agree, it depends on what risk you wish to shield yourself from. SDB is a poor choice if you are worried about bank holidays and government action, while home safes can be a poor choice against natural disasters and home invasions.

    You have to make a choice for yourself which is more likely. Personally I went the SDB route.
  17. tgaw

    tgaw Member

    i personally would need a very big sdb.i have used them for other reasons though and agree they do have some advantages.i keep my coins inside individual safes that are locked and they are all locked in my homes walk in vault;which is also where i keep most of my house could burn down and unless i was told a story my vault will still be intact.i do agree everyone needsto do what they feel comfortable with.
  18. Juan Blanco

    Juan Blanco New Member

    Currently gold makes up roughly <1 % of global financial assets, as they say.

    I should clarify my comments about the PM ETF participation, based on the ICI study (2011). There's no retail/household data to ascertain (Paper) PM holding. Page 53 has an aggregate (all ETFs, held by instit, hedge funds, households, foreign investors, etc.) chart showing 50% of 'Commodity & Sector ETFs' assets is commodities: 80% of commodity assets were in Gold & Silver ETPs (as I said) But there's no ICI breakdown of HOUSEHOLDS' asset allocation in ETFs, PMs, nor Gold specifically.

    From this McKinsey & Co study (2010 data), guess ~8% is now in alternative investments. Estimate 4% in 'Commodity' and thus 3.2% Paper PMs?


    Here's another McKinsey commodity factoid, lumping physical "Gold" with other real assets ... ~$4.9 Trln in... farmland? mineral/timber rights, etc.?


    This study is about 1 year old, but offers some empirical evidence for moving a >10% allocation to Gold (Paper)

    There's also an interesting study on Gold alloaction to digest, here:
  19. fatima

    fatima Junior Member

    Of course this is simply incorrect. The Federal Reserve for example backs a significant portion of the USA's base money with gold deposits. Other major countries are in a similar position. And... China is looking to match this.
  20. Juan Blanco

    Juan Blanco New Member

    Of course it's NOT. This isnt exactly "breaking news" nor subject to serious debate by rational people. You're terribly misinformed otherwise.
    And global financial assets isn't M1, M2 nor M3 etc.

    View attachment 220477


    The Erste Group's data is excellent and well-informed. And they're not internet nebbishes LOL
  21. Cloudsweeper99

    Cloudsweeper99 Treasure Hunter

    I wish MRBRKLYN was here for this. :devil:
Draft saved Draft deleted

Share This Page