I WANT TO BUY SOME GOLD but I AM A LITTLE SCARED

I'm no expert, self employed and possibly overly mistrustful which has kept me out of the markets. I've used the past decade to eliminate debt first and foremost (the best thing I ever did for myself).

I own a smaller commercial unit with three rental bays but other than that, have been using the extra cash flow to accumulate a larger percentage of physical than most advisors recommend. I also keep a decent amount of cash in the bank and am prepared to buy in to the markets in the event we get a big correction.

I don't know but I'd say if you've got debt, get rid of it first. You might lose some government incentives but you'll know freedom and sleep better. If you're already debt free, congratulations! You're already doing better than most folks I know and you've got options, no need to be scared.

 

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The single best piece of advice on this thread!

 

Mortgage REITS ("MREITs") are a fine income investment but they are leveraged financial vehicles that are susceptible to BOTH falling AND rising rates.

My favorites now are AGNC, EARN, MFA, and CYS. Make sure you know if you are buying pure agency REITs (play on interest rates only) or hybrid REITs (play on improving credit quality).

 

Gold is a ripoff =) I seen it go down to like 1,050.00 a ounce on ebay last year now it's like 300.00 more go for it!!!
The only way I'll ever be able to afford any gold in this life is if I get a new job.

 

Doesn't matter, you go with the LEAST BAD and invest prudently with diversification.

There are lots of quality bond funds paying 3-5%.

There are also quality bond closed-end funds (CEFs) which pay 5-9% or so. Both leveraged and non-leveraged.

A quick list in order of least-to-more risky: IGI/ICB/VBF/MIN.....MCR/DUC/FPF.....DSL/DSU/EHI.....I own or have owned all of these for years.

Dividend-paying stocks are a winner. RDS-B and BP are fine. Lots of others, energy and non-energy that pay DOUBLE the 10-year Treasury rate, unheard of a few years ago.

Gold is a SPECULATION, not an INVESTMENT !!!

Total production costs are always HIGHER and many of the factors that drive gold higher increase the COSTS OF MINING even higher. That's what happened from 2001-15. Tens of billions in gold CAPX wasted.

Please invest in a balanced investment portfolio: 60% stocks, 40% bonds. If you are very conservative, 40% stocks, 60% bonds.

Invest/speculate with your excess $$$ by buying bullion coins or classic gold/silver. Make sure YOU LIKE ANY NUMISMATIC or bullion coins even if the price gets cut in 1/2 in 5 or 10 years (unlikely IMO, but a good precaution).

 

Lots of good advice so far. One big one to keep in mind before you do anything is to figure out what you're comfortable dealing in, and how much work it'll be to manage it. That's where all of us differ. That being said, here's a batch of ideas I've got.

*Don't do everything all at once. Santinidollar hit that nail on the head. Move slowly and in pieces.
*Personally, if gold, I'd only deal in eagles. You will always know what they're worth and you won't have to worry about recouping some historical and subjective value.
*Don't rule out gold stocks, but don't own individual stocks. GDX and GDXJ offer some tremendous wealth creating power, but can also wipe it out just as quickly. Buying the indexes can smooth that out much more than an individual stock.
*Avoid the paper gold and silver investments. It doesn't happen often, but they can be severed from the bullion prices, so they are not a perfect substitute.

*There are still deals to be had in stocks, but they're not easily found, and I'm not one to offer suggestions at this stage of the market. I will say growth, and growth and income stocks are still out there for the taking, but you have to do your homework.
*Banks are for people who don't know how to properly invest their money. They're great for creating wealth, just not for the customer.
*Don't overlook life insurance if you're young. It can be a hot debate, but done right, it can be a great tool in the portfolio.
*Debt: If you got it, get rid of it. That's an easy one.

*Lastly, don't do anything. Having some dry powder laying around isn't a bad thing. I switched jobs a year ago. I rolled everything out and into IRA and stock HSA accounts. That was a good chunk of cash that I wanted to invest myself. A year later, I still haven't gotten all of it invested. However, in the past year, I've snatched up a lot of opportunities that have paid off well. Sometimes, patience is a very lucrative investment.

 

Let me see if I got this right. Gold is speculation, but bonds and stocks are an investment? Is this for real?

 

There is a speculative quality to any investment unless one wants the 0.00000000000001 percent CD rate or wants to put their money in a tomato can. Yes. I consider PMs much more speculative than stocks and bonds.

Look at gold as that speculative stock in your portfolio that might take off with enormous gains -- or could just as easily fall down on its face. You wouldn't put your entire portfolio into that stock. Same with gold -- 5 to 10 percent maximum. JMHO.

 

There are High Yield Savings Accts out there getting 0.70 up to 1.0%.

I also have a HYSA at 0.70. AmEx is 0.90% and Ally Bank is 1.0%
Nothing like the good old days in the early 90s. Even Credit Unions have much better rates on long term notes.

plus 401ks Roths etc.
but maxxing out or creating a large nest egg in retirement funds is critical. You have to watch like a hawk and make sure you select good funds in the 401k's so that the money you put into it isn't the only appreciation going on.

stocks, as example:
- I have a 3 yr stock appreciation only stock that is up 90%
- a 1 yr stock+div reinvestment up 25%
- and a turnaround stock that is even right now
- gov't treasury bonds which whiplash back and forth in interest which have weird interest calculations. Still debating on keeping those or not.
4 different types of stock for different things. But it's money up and above all the other ones.

and as many have said, try to eliminate debt. Finance Payments pull away so much cash that you can use for other things. Watch your monthly statements and look at the "interest payment" part. That could be money you could be saving instead.

The problem is, you have to have the determination to eliminate debt and save for long periods of time. Most ppl just rack up debt for something new and shiny (excluding coins of course).

The thing is, people have to learn how to save. Take out $10 here or there to put aside (or use as additional debt payment). Then try to increase that amount as time goes on. All it means is that you buy less coffee or steaks, etc. But you can pay down debt quicker or save more over time.

 

If one is carrying credit card debt, the return you get on an investment portfolio HAS NO CHANCE WHATSOEVER of overcoming credit card interest. So, step 1 is getting rid of that debt. Then take the money you have without credit card payments and invest it.

 

I see where the other fellows are coming from as gold sitting in a vault doesn't create wealth but I also like this quote from James Grant: "the case for gold is not as a hedge against monetary disorder, because we have monetary disorder, but rather an investment in monetary disorder." - James Grant

We're living through some crazy times, that's for sure!

 

gold is pretty to look at
and has a high valuation

some people buy highly overpriced gold jewelry (of various alloys) and others buy nicely valued gold coins (assuming it's not from TV salespeople). To me you can't go wrong but don't buy until you have other investments built up, and debt paid down.

 

Do this, and dollar cost average your purchases and diversify.

If you'd like to buy $8k worth of Gold, you'll find many willing sellers that will all explain why it's going up - and at the same time they are anxious to sell.

 

Yes those are definitely underrated and a strong dividend return usually is very attractive to investors which minimizes the risk. Everyone's risk tolerance varies so their strategy should as well. I like to have a couple growth companies or long shots just in case but for the most part well established companies which offer a dividend

 

Scardy cat.........

 

Yes. Gold and any metal you are speculating on what the price or the demand will be for it. Stocks actually have financials that you can base your decision on as well as how popular the companies services are with the company.

 

To everyone recommending mortgage REITs, I would stop. It's not necessarily that they're good or bad vehicles, but moreso that they're far more complex than anyone is willing to admit. Most financial advisors have no idea how they work, even though they sell them, since their wholesalers say to. Yes, they give good yields today, but if rates go up, the prices drop and if rates go down (virtually impossible right now), the yield will drop, too.

One of the biggest issues for compliance reviews has actually become forum posting. Our compliance officer asks us for a documented list of where we post now, to verify that we aren't giving financial advice in states we aren't licensed for or products we *are* licensed for to non-clients. Just watch yourselves is all I'm saying.

The preceding post does not intend to be considered as investment advice. Any investments should be considered for all layers of underlying risk, including but not limited to time, interest, exchange rate, leverage and underlying assets. Please consult your financial advisor for any investment questions/concerns you might have.

 

A couple of pure growth stocks keeps me engaged in my portfolio and keeping up with news that could affect any of my stocks.

 

Glad to see your investment house has ethics. Anybody can put up an investment blog or site. It amuses me how many of these writers are planting "sell now" advice while likely shorting the stocks they are throwing mud at.

 

You people are forgetting the OP's question.