Ideal number of ounces

Yes

Made a killing in Apple, and Honeywell. I have been buying silver and gold heavily for about 3 years now with the profits. I will be at the 10k ounces of silver in the next couple years depending on if it stays cheap or not. The gold is gonna take me awhile. I did add a couple 2015 eagles last night for $1250 last night so I'm happy about that.

But yes I do have "fiat"

 

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Thats not an unreasonable amount to leave to your kids. Mine would look at that pile of gold and silver and say, 'What am I supposed to do with all this crap?' and that would be the end of it. It would sit in a bank forever. No, Mine are getting land.

 

If you are investing properly, you will set a certain percentage of your holding's that will be in PM's. Then you will break your PM segment properly.

Then and only then can you know what your personal ideal number of ounces are.

Someone investing $1,000 total, 15% in PM's, would be limited to $150 so most likely buying silver at the lowest mark-up possible.

Someone with $100,000 can buy $15,000 in PM's and put more thought into balancing their PM portfolio.

 

What's with all of this zombie apocalypse nonsense? Someone has been watching too much walking dead...

 

The magic number when it comes to Gold is a 10% allocation in your portfolio

 

Where did you come up with 10%? Seems a bit high for such a low yielding commodity.

 

Eugene Fama (and French?) included Gold in his optimized asset allocation model a few decades ago.(I'll presume he used Gold notes sold by banks, before 1976.) In modelling, the minimum allocation to an asset is 3% and abit higher to an asset class. Also, where a "Cash" allocation of 5% - 15% was historically considered appropriate/normal, Gold overlaps/fits both "Commodity" and "Cash" asset classes. Gold has already been proven excellent for diversification.

Taking the AARP's data for someone Age 60, with $250k in retirement savings (and the reality of $150k published elsewhere) "10%" would be $15k - 25k in Gold. Purchased incrementally, and nothing crazy, that might simply be 1 ozt Au per year over the last 25 years or so, skipping any 'too expensive' years if you so wish. Furthermore, this discipline would have allowed the 'prudent set aside' recommended by financial advisors for 10% of your disposable income in a "rainy day fund."

What would the average Dollar Cost Basis have been for a 25 Ozt Gold stash, built over the past 25 years of a working individual's lifetime 1989-2014?

 

Thats an interesting question. One would, of course, have to factor in inflation and the differences between what 10% of one's investment capabilities were over the span provided. I've honestly never figured up such numbers before.

 

for silver you just buy 'till the 'ol lady bitches then add a bit more on the sly.

 

If you consider the cost of liquidating your 401k with penalties (don't do it!) or the fact that the check won't clear for ~2 weeks, bullion is NO LESS illiquid and probably more so, in fact.

So what's the right amount for an Emergency Savings Fund, stashed away and not in the brokerage acct?

From Vanguard's website:
https://personal.vanguard.com/us/insights/saving-investing/emergency-savings
"Many financial advisors tell people to keep six months' worth of expenses stashed away for emergencies. That might be a pretty good rule of thumb, but these days it might not be nearly enough."

It obviously depends on your own salary and cost-of-living, but since the average salaried American gets a paycheck of $800. (BLS data), then $19,200. is the ballpark target minimum. An average the Rainy Day Fund in bullion, built over the long term, makes sense. Bullion hoarders can be relieved of any 'guilt' by factoring that prudent reserve, if they understand and accept this form of disciplined savings.

That's still around our simplified "10%" PM allocation above, for most investors Age 60+

 

If you bought one ounce of gold in every year from 1989 through 2014, you'd have 26 ounces of gold and, adjusted for inflation, it would have cost $19,872. (Without adjusting for inflation, it would have been $16,126.) Average inflation adjusted cost per ounce would be $794. Doesn't sound too bad at all considering it's worth $1,264/Oz today, or a total of $32,864.

I don't think that's too bad since bullion offers a sort of insurance that has relatively low fees, or can earn money in the long term.

However, this shouldn't be considered as advice to dump all ones investment monies into precious metals. Many mutual funds averaged between 10 and 15 percent returns during that same time period. The value of that $19,872 invested in a good mutual fund would be $53,536-$115,586 today. Of course hindsight is 20/20 and nobody knew in 1989 that the economy would still be standing and that we wouldn't be speaking Russian by now.

 

Man my ratios are way off lol. I have about 1/2 my net worth in silver and gold, 25% in equities and 25% in $100 bills.

 

[QUOTE=Is there an ideal number of silver ounces one should strive for?

Not sure this is the way you need to view this issue. Years ago, I read a quote from the elder Baron Rothschild that for financial security, one should have 1/3 of their wealth in securities, 1/3 in real estate and 1/3 in rare art. (you can sub for rare art, but it ain't beanie babies). I think your bullion and rare coins would fall under rare art.

That said, I've always felt that everyone should have at least 5-10% in pm's and particularly physical hands on stuff. I think of this as an investment and security blanket. More than this tends to get into speculation and that's OK as long as you realize the risk.

Now, once you figure out for YOU how much dollar value you want to have in pm's, you can figure what you need in silver vs. gold. Personally, I've always liked using the gold/silver ratio as a guide. This is what they're selling for at any one time relative to each other. Historically, it was 17 to 1 silver to gold. Right now it's 74 to 1. That means I want to own 74 ounces of silver for every one ounce of gold. If indeed, this ratio should return to the mean, I will gain more.

just some mumblings,

peace,

rono

 

Short answer: More.

I've got a short term goal of 500 silver, 5 gold, 5 platinum. Once there, I would feel I had a good position in metals as a percentage of total portfolio. To date, I'm living in an apartment and looking to make the leap into a house or small country place. Ain't got the cash yet, but I'm diligently plowing cash away to make it happen.

I have a small hope that one day there will be a quick rise in metals so I can swap them out for land. I'm not planning on it, but It would be nice.

 

Nope. Retail buyers would have paid retail prices (store premiums) and taxes (most of us live in the real world) and only certain items are IRA acceptable: the cost basis would have been significantly higher than $794 (annual average of Spot Gold, inflation-adjusted?) for AGE, for example.

Same with your mutual fund example, you'd have to include the 5% front end load and all brokerage fees. Factor all costs.

 

Sounds like a rational strategy, Shooter. Hope it works out in the long run. That swap will come one day or another. We just have to recognize opportunity when that time arrives. Hopefully, we all take advantage of the rise in PM when that time appears.

 

10oz Silver Bars, sewn into a shirt or duct-taped around the chest and abdomen, make pretty nice anti-stabbing protection for the torso, if the S really hits the fan

 

Would be a heavy under shirt but I bet one would stop most everyday projectiles. I wouldn't want to take a .45 ACP to one but most rounds wouldn't go threw.