Is now the time to give up on PMs and look to the stock market?

Discuss pros and cons

 

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Shhhhh... with talk like that you'll summon Kurt and get 10 lashes.

 

No, now is NOT the time. "The time" was about 7 years ago.

 

Nathan's right. I don't buy any of that garbage. Accuracy is not determined by the number of people in a given field who believe it. Funny how even moderators fail to see politics in their own posts. I'd get into SPECIFIC refutations, but 1) most people have already read them, and 2) I would be then reprimanded for getting political, when you started it going that way.

See? I can learn how the game is played here.

 

You don't think stocks are driven by that same logic? "determined by the number of people who believe it?"

Stock value is based on people's perceptions of if a company will do well or not. The company doesn't benefit when we buy stock, besides at their ipo. The rest of the sales of stock after that only benefit or hurt other stock buyers. Except, of course, that if a stock is strong more might be willing to invest in other ways with the company.

PMs seem to also be based very much of the perception of if the economy is good or bad. If it's good, people ignore precious metals and take greater risk. If they think the economy is weak, they will be more conservative in their investments, especially the most extreme route of buying gold.

Is there something about people's perceptions that you wanted to add? I don't think it needs to be political at all.

We all know what type of talk radio playing in most coin shops and the most likely type of bumper sticker a bullion buyer is likely to have on his (and yes, I said his, because most are men) car.

 

Sure, ALL market values of EVERYTHING are. It's just that PM coin people tend to be LITERALLY invested in gloom and doom of their own place where they live. I'm sorry, but I find that a little sick and twisted.

Call it "insurance" all you like. I think it's better to work your guts out to make sure it doesn't go all sideways.

And besides, with equities, you are "buying" a share of an income flow, whether used for dividends, share buybacks, or retained earnings to fuel growth. On the contrary, holding physical metals COSTS money, rather than earning it. And if you're buying physical metals, you pay taxes at ordinary income levels, rather than the beneficial capital gains rate. All in all, PM's absolutely STINK as a store of wealth.

 

As far as I’m concerned, gold has been and will continue to be ONLY a hedge to stocks and bonds. No one should be totally invested in PMs only.

 

What happens to the price of stocks when all of the Baby Boomers start retiring in full-swing and start selling their stocks in their 401(k)s and retirement portfolios. Not as many youngsters coming up, let along have money to buy investments (they still have to pay for their BAs in "Questionable Sexuality Dramatic Theatre").

 

The Baby Boomers and their stock portfolios are only a small amount of the overall market. They are dwarfed by institutional investors such as mutual funds and retirement systems.

Do a bit of research and you will be surprised how little many boomers have saved for retirement.

 

I do not think baby boomers will have trouble selling their stock....The question is will they like the offers, and the baby boomers selling their bullion have better be lucky or they may find a bad surprise. 1%ers did not become such by buying bullion. I prefer higher education in a real area of success or property. Just me maybe.

 

I’ll take another tack
What is your true and real objective for saving and investing? Ignoring how to accomplish that.

Do you know right now you can get about 1.8% in a savings account? How does that compare to gold?

The stock market is full of “segments” of various types of investments that, currently are losing badly, losing, flat, gaining or gaining largely both domestic and international stocks and govt or commercial bonds. Basically pick your poison.

Of course in hard assets you have real estate, metals, and a multitude of other commodities.

Governments around the world invest in the stock markets.
I wouldn’t worry too much about when the baby boomers retire and draw down their nest eggs. The markets will balance out.

Of course you may also consider the liquidity of an investment in various economic conditions. For instance metals may be considered liquid until price drops and no one wants to buy except at firesale prices; then dependent upon ones risk/reward ideology may not be able to sell. Thus they aren’t very liquid.

Of course a company stock may have scandals and stock price drops like a rock (ie Valeant pharma) thus mutual funds will shield against an individual stock investment but will blunt explosive individual stock growth. A company may create a fad and have explosive growth just to quickly fade into oblivion after others enter the market segment.

A commercial bond fund can create income or reinvestment of 10-20% annually.

So many choices dependent upon what one’s objectives are.

Even my junk subprime loan investments with medium default rates are better than PMs these past couple of years.

 

I should also just add, make sure you have a very aggressive plan on reducing debt. All debt. Also plan on reducing fees.

I tell ppl to track their monthly finance charges and fees so they know how much out of pocket they are paying someone else to carry their debt. That’s mortgage, car, credit card. Etc.

The more you can “save” from your entire cash flow the better offf you’ll be to build other investments.

 

Yes, and here we are on a site seemingly hellbent on pretending otherwise.

 

15.41 stack it..

 

I literally giggle while looking at the news stories on kitco.com. I have to be careful. I'm an old guy with neurological deficits. If I get laughing too hard, I could pee myself.

 

By all means necessary Kurt, please spare us that.

 

You are missing one thing though. Stocks (or more accurately the companies they represent) have the possibility of real growth and with that comes the possibility of increased income flow. While PM's may increase in value, they can never GROW. An ounce of Gold now will be an ounce of Gold in 1,000 years.