Discussion in 'Bullion Investing' started by goldcollector, Aug 8, 2016.

  1. goldcollector

    goldcollector Member

    Hello I have about $8000 to put somewhere and everything seems like a bad option.

    #1. My bank will pay 0.00000000000001 % interest and then charge a bunch of fees so that effectively negative interest rates.

    #2. Stocks scare me as they are overinflated with cheap money now and Im afraid due for a fall.

    So that leaves me wanting to buy some gold because Gold is so beautiful and its been around forever and it will always have value and blah blah all the other stuff we already know. I would be looking to hold say 10 years or more but still I feel apprehensive even with Gold.

    Everywhere I look the sentiment seems to be so negative. Even on the coin/bullion boards there isn't much excitement or belief that it will go up or even hold value.
    I keep hearing some people saying Golds true value should be $700-$800 and that it will eventually fall there. Now I know that's just their opinion but who wants to buy and then watch half its value disappear ? Noone.
    If I could just believe that 10-15 years from now Gold would still be worth $1500-$1600 then I would accept that. Its only a 1.5% or so a year gain but that's better than I am going to get anywhere else right now. I just really fear it tanking hard.

    Another concern I have with Gold is all this Edited: Read the rules !coming from China. This is only going to continue and I have seen some fake silver in hand. Its not that easy to tell its fake. Very easy to get screwed IMO and wont even know until you try to sell it. I know an LCS/Online dealer wont sell fake intentionally but do they really 100% test and guarantee everything they buy is good ? Maybe they do. I don't know for sure.

    I am happy when I hear the cost of production is $900 or so an ounce average. Is this true ? And can Gold stay under production costs for 10+ years ?

    I don't know maybe I am overthinking it. Maybe I should just buy and let whatever happens happen. But we have to realize it would suck if 15 years down the road youre older and maybe have health problems, and you have to have the money and spot is $500 when your DCA is $1500. Even though I don't know if spot could ever truly fall that low I would feel better about buying if I felt that it couldn't drop under $1000. I can stomach a small loss but maybe not a massive loss.
    Last edited by a moderator: Aug 8, 2016
    Travlntiques likes this.
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  3. goldcollector

    goldcollector Member

    I know in the next 10-12 years we are going to be talking about 30 trillion debt so maybe that will keep gold afloat. I don't know.
  4. Markus1959

    Markus1959 Well-Known Member

    If you appreciate gold coins I'd say stick with pre 1933 US gold coins.
    dwhiz, Gilbert and GoldFinger1969 like this.
  5. Santinidollar

    Santinidollar Supporter! Supporter

    A lot of investors have the same head scratching you do: stock market at near record levels, bond rates have seldom been this low for so long and gold and silver recently jumped up, then pulled back a bit.

    One thing to remember: you don't have to invest your eight grand all at once -- and you don't have to invest the entire amount in the same thing. Diversification is key.
  6. Victor

    Victor Coin Collector

    Don't think about it so much.
    Just buy some and then you can think about it!
    Kentucky likes this.
  7. scottishmoney

    scottishmoney Слава захисникам свободи

    Split it in four, $2000 - buy stocks, gold, silver, and put the rest in the bank. Then you have spread the risks.
    Paul M., sportpak, Alegandron and 4 others like this.
  8. Michael K

    Michael K Well-Known Member

    You can buy gold, without having to buy the actual bullion, so you won't get cheated on fakes. (Certificates that represent actual gold.) Gold doesn't pay any dividends. Our economy is a pyramid scheme in a consumer driven economy which can only accumulate more debt. Meanwhile, the best return is in the stock market/ mutual funds.
  9. Santinidollar

    Santinidollar Supporter! Supporter

    Gold can be bought and sold through shares of an exchange traded fund. Trades just like a stock.
  10. baseball21

    baseball21 Well-Known Member

    True but some companies have had a pretty stable ride. There's certainly some over valued ones that may not last but does anyone really think that Amazon, Google, or Exxon are going to go under just to name a few
    GoldFinger1969 likes this.
  11. scottishmoney

    scottishmoney Слава захисникам свободи

    ETF's are cute, but I always remember what Voltaire said about paper:

    Paper money eventually returns to its intrinsic value: zero.

    Physical is the only way to go.
    Alegandron, JDcahill and Travlntiques like this.
  12. Victor

    Victor Coin Collector

    I agree with buying physical gold and storing it yourself.
  13. desertgem

    desertgem Senior Errer Collecktor Supporter

    He also said "A witty saying proves nothing." :rolleyes:
    scottishmoney likes this.
  14. andrew289

    andrew289 Senior Analyst

    Paul M. likes this.
  15. desertgem

    desertgem Senior Errer Collecktor Supporter

    You might check the major REITS such as NLY . I have held their shares for over 10 years and the dividend has been stable around 10 %. You do need to watch the interest rates carefully as this would affect it. Currently 10.8%. Gold has the same factors IMO. Read the prospectus as with any investment.
    Paul M. and GoldFinger1969 like this.
  16. Santinidollar

    Santinidollar Supporter! Supporter

    For a guy my age, dividends, dividends, dividends. Maybe a couple of growth companies that don't pay dividends, but chosen carefully.

    Trust me on this: if younger investors would buy the dividend stocks and reinvest the payments in additional shares, they would be amazed at the growth. That can be done automatically.
    Paul M. and GoldFinger1969 like this.
  17. Santinidollar

    Santinidollar Supporter! Supporter

    If your REIT is stable and can continue to cover its dividend, I don't think bonds are going to provide much competition for quite some time.
    GoldFinger1969 likes this.
  18. Silverhouse

    Silverhouse Well-Known Member

    With $8000, Pre-1933 Better and scarce date coins. You'll find plenty to choose from with that 8 G's. :) Don't forget, the mint has put out some nice platinum pieces too in recent years. At least I think so.
  19. hotwheelsearl

    hotwheelsearl Well-Known Member

    Do what I do. Play Russian roulette with day trading, make 10% in one day and lose 20% the next. It's all fun and games until you realize you've lost...
    Dave M likes this.
  20. RhinoEmpire

    RhinoEmpire Hi-Yo (Ag)

    Agreed. Also, I'm making the assumption here that you are relatively young. If you haven't already (created and) contributed the maximum $5,500 to your ROTH IRA, you should do that first. Second, if eligible, you should max out your 401K with the $18,000 contribution. This will save you a tremendous amount on taxes and will grow over your lifetime. Do this and you will not be scared of an $8,000 investment.

    I've had many friends come back to me over the years thanking me for pushing them to do these two things.
  21. Nycmacman

    Nycmacman Active Member

    I think the roth IRA recommendation is great, but I would think carefully about the 401k unless your company matches your contributions in some form. If they match it in any form, max it out. Free money is great.

    The reason I say this is because if the OP is younger (in your early to mid 20's) he is at the beginning of his career. That being said, he is most likely at the lowest tax bracket hell ever see. When he goes to retire hell be taxed at his current bracket at 59 1/2 instead. That is another reason the roth is advantageous.

    Santindollar is right, diversification is key. My personal allocation is as follows.

    Roth Ira: 20% VTSAX total stock market fund (I have a long perspective)
    A account with schwabb for blue chip dividend paying stocks 15%
    Gold and silver bullion 35% (I bought below the 15 mark so keep that in mind)
    And 30% in cash.

    This breakup may be a little skewed but I am comfortable with it.

    If you have 8 grand and are young, don't even put it into gold at the moment, put it into a roth as stated previously. The compounding interest and dividends will yield you a much higher rate of return than gold will.
    GoldFinger1969 likes this.
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