New to bullion investing ...

Whatever works, but that is saying this to someone with more financial information than 99% of the US population. If you are comfortable with it that means a lot, its just most folks would never be comfortable with such a massive short term decline in their portfolio.

Again, matter of education.

 

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Massive declines are very rare, and I used the oil example because it is probably near the extreme of what can go wrong, but shows that investing with a plan can result in acceptable results anyway, and makes it psychologically easier to accept when you know that every drop is sowing the seeds of a future gain. Most years are not as exciting. The nice part about what I do is that it enabled me to earn decent returns over the past dozen years when the general market went nowhere.

 

I didn't want it to appear that I posted and then disappeared. I've been following this thread and appreciate all the input and back and fourth discussion. I have been doing my own due diligence and will certainly "continue" to do so. Still interesting to follow this discussion! Thanks again.

 

Then you are on the right path! Good luck.

 

Lol sometimes Cloud and I disagree, I am using the word "sometimes" with a grin on my face. We go back and forth, having fun sometimes, but hopefully our differences are helpful to others to form their own opinions. I never claim I am right, I only claim to believe what I post, and know others have honest disagreements with that. I am usually more "textbook" than Cloud is, nothing wrong with either approach.

 

It seems to me you two both downplay precious metals even though you also advocate their place in a portfolio, which is understandable with all the frenzied bullish talk that isn't always substantiated. Although I don't really see much difference of opinion between you except over details within the same school of thought. It never hurts to be cautious, but I am of the opinion that we need to be sounding the alarm bells for folks to at least get some exposure to PM's before our buying power is lost altogether.

Of course being overextended isn't wise, but if you have cash sitting around you are asking to have your wealth stolen from you if you are leaving it in the bank or even the stock market (see the historic DOW/Gold ratio), or even bonds for that matter (without QE who is going to buy them?). The track record of the dollar's purchasing power is clear and does not inspire confidence.

Nothing else can provide the financial security that precious metals can, because everything else either requires special storage conditions, confidence in an IOU, or else isn't fungible (1 oz = 1 oz no matter how you slice it). PM's are both easy to transport and can be broken up or melted down with minimal loss of value. I personally do not trust financial institutions as far as I can throw them, and the only wealth of mine that's in IOU form is what I am unable to obtain directly (employer contributed retirement fund) and my cash cushion.

 

Gold and silver bullion are just two more tools in the toolbox.They have been in a bull market for a decade and look good compared to bonds and stocks. Bonds get a lot of bad press, but have outperformed the stock market over the past 20 years. Stocks have gone nowhere since 1999, but the time will come when the DJIA outperforms gold. Cash still has its place because it has value in providing flexibility to jump on bargains in other asset classes, and this feature can be more important than the interest rate and can outweigh inflation. Even real estate will make a comeback since it can be a very effective leveraged inflation hedge, although probably not soon. It appears that gold provides financial security because there hasn't been a significant bear market in gold for a long time. I don't expect this to change in the near future, but the time will come when the correct course of action from an investment standpoint will be to not own any gold at all.

So I would never rule out any asset class. Everything has a time and place in a portfolio.