PM's The new get rich scheme

I don't usually post much on the bullion forum, although I read it pretty much every day.
And I wan't to start by saying I am a firm believer in PM's as a "investment vehicle" have been buying silver since the early 90's. But I have to ask the question. What are you really expecting from your investment?
I know a lot of the regular posters in this section are way more knowledgable than I am, and you know who you are so don't beat me up too bad but it seems like alot of people really don't get that it's not a get rich scheme. Your 1000-1500oz may make you a better return than other investments right now, but to abandon all your other investments? Cmon really?
I still think that silver may go up a couple dollars in the short term 1-2 yrs, and I'm no expert. I just think that the big rush to PM's is helping to drive the price up and when the masses find a new get rich quick investment they will sell off , the prices will drop, and tons of late in the gamers will lose their shirts.
Happens all the time in the stock market...by the time you me and everyone hears about a stock rising it's already nearly reached its climb then when it takes a small dip everyone panics and sells at a loss. I'm sure it happens daily with the pms as well. Most investors don't have the patience or dicipline to weather the rise and falls of the markets.
Let the yelling begin:devil:

 

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im into holding pm's to preserve wealth. if in 10 years from now silver 18-20 im a happy stacker. anything over 18 is pure gravey for me. im not in it to build my wealth, ive already done that, i need it to preserve only.

 

That is a good idea as long as silver stays stable, but what if it starts to fall? What if silver goes down to $15. If you own 1000 oz and lose $3000 on paper will you hold out for another rise that could take several years? I am speaking generally and don't know your financial situation, nor do I want to know. What if someone owns 10,000 oz and bought in at $18-20.
I just see alot of people posting here in this section who seem to be rushing to catch the train, but what if the train is at the last stop and is doing the turnaround.
I have alot more than 5-10% of my investment capitol in PM's virtually all silver because I am a coin collector and can't help myself, but I still have Cash/other investments that I expect more of a return on.

 

I started getting heavily into gold and silver when gold was about $425 and silver was about $5-6 because I believed it would outperform more standard investments. So far it has, and I expect it to continue. Bonds are a potential death trap waiting to be sprung, and stocks are generaly overpriced using the methods I use to measure it. I'm not a survivalist and I wouldn't hold bullion if I thought stocks would do better, or even just as well. While there are commercials selling bullion, the vast majority of professionals and individuals own little or no gold or gold stocks, so there is far more upside that most people here might believe. Remember, we are not typical. I think, but cannot prove, that gold will end the way tech stocks did in the 90s. The trick will be (1) not to sell too soon and (2) not to stay too long so that the bulk of the spectacular rise that has a reasonable probability of occurring can be captured.

 

That is the trick alright. Sometime the period between 1 and 2 is just a few days, and sometimes months.

We all have differences in our investment goals, expectations, and abilities to take minimum risk for rewards. Most people have not lost money by getting into an investment scheme as have lost money, not knowing when to get out. But if we were all financial clones, there would be no market, as it needs opposite opinions for buying and selling.

Knowing PM "bugs" that I do, they seem to be using the idea of investment as an excuse to hold high amounts of PM as holding it is their real goal. " Hey honey, I need more gold for our survival portfolio", and they will hold it when it goes to the moon, they will hold it when it half what it is today, and they will hold it to their death waiting for some event they haven't solidified yet. I think gold and silver is beautiful, I can somewhat understand their passion to obtain more, but the ones who will get hurt most in a big fall will be the ones who are buying right up to the turn~ the newbies convinced by media, and the PM bugs who just know it will go higher. The smart money will be out of it by then. IMO.

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Everyone should hold some small face coins of Silver and a few Bullion Gold coins "Just in case". If a person were betting on hard times, Ammo would be a good investment. $200 worth of say 9mm rounds could easily bring that much in face Silver should there be an economic collapse or fear of one. Gun sales have outperformed all others during this downturn. Next you should buy stocks to gain the advantage of cost averaging in your portfolio. Utilities should always be around, but buy those that own transmission capability or lines. Of course, owning someplace to live is the best investment. Once rent is out of the picture you can start to build a nest egg. IMHO

 

I agree. By way of full disclosure, I don't buy much bullion anymore [except ASEs when I can get them below $20] because the price isn't the bargain it used to be. And I don't expect to hold it forever or buy into the survivalist nonsense. There are certain coins that I will never sell, but I'm hoping to sell the rest in the middle of a mania. The interesting lesson from the tech stock boom and subsequent crash wasn't to stay away from the risk. Buying was exactly the right thing to do, provided you can sell in time to capture most of the increase. What will the end look like? I think gold will be going up $100+ per week and silver $10 per week. The psychological challenge will be to sell when holding for another day will almost certainly result in greater profit. But as you say, the fall will probably be rapid and unexpected.

 

15 years ago I was buying silver any time I could afford it(seems like such a fool I was now for not scraping change to buy more), and unfortunately I had to sell most of it a couple years ago when I really needed money. I couldn't believe it was so cheap and was sure it would go up. Nobody I knew believed me. Oh well their loss I guess. I still doubled my money, but quadrupling would have been even better. I still buy silver now mostly ASE's and (90%)mostly because I collect coins, but I don't buy into the frenzy that I see/hear.
Mainly I was ranting about all the Hype...you know the ones I'm talking about...."Hey I just sold my house my car all my stocks and bought 500lbs of rhodium...now all I have to do is wait a week or two and I'll be able to retire"

 

I got into the PM game very recently. Since January I've bought close to 1000 oz of silver. I have some junk, some bars, generic rounds, SAE's, Maples, Libertads and Prospectors.

I didn't buy silver to get rich. I bought it to further diversify my portfolio and preserve the 17k in wealth I used to purchase it. I have a 401k. I have some land holdings. I have cash.

I like silver more than gold right now. Silver is a PM that has industrial applications. Like gold it is a store of wealth and should preserve wealth in a poor economy. Unlike gold, silver has industrial applications which should make it more valuable if the economy gets going again. I think silver has the potential for upside in good and bad economic times.

How do I know I'm right? How do I know silver will increase in value? I don't. Its an investment and all investment carries risk. There is risk in holding land. There is risk in having money in a 401k. There is risk holding cash if inflation hits.

I want to have as much diversification as possible. Not everything is down at the same time. If that happens and we go to a barter economy we're all SOL, anyway. Maybe I should buy some guns and ammo, too.....hmmmmmmmm.

 

do you feel diversified even though your pm position is 100% silver? your portfolio/holdings look very similar to mine, i am 100% silver as well and whenever i bring this up on forum im always hearing that i am not diversified, i need gold, blah blah blah.

 

I have two high grade common date slabbed St. Gauden's twenty dollar gold pieces. That's it for my gold holdings.

I plan on buying gold, but, 1. It is at an all time high right now and 2. I just spend 17k on silver and don't have the money!!

Once I pay my summer taxes and save some money I'll start looking at gold. I'm thinking of buying common date Liberty Head and St. Gauden's in MS 60 -61. There isn't much of a mark up on these and you have the numismatic upside. Plus, if gold does skyrocket, I'm thinking a lot of "common date" gold will get melted and no longer be "common" thus increasing the numismatic value. Plus, double eagles are cool!!!

 

i plan on selling my bullion coins and investing in one or two good coins. and to make sure there pre 33 coins,
what do suggest i would like to hear your thoughts . just to add the bullion is gold and trying to keep the bank manger away from it lol:smile
asap please :thumb:

 

anyone that believes PM's are meant to get rich quick is an idiot and I can't wait for them to buy in at an insanely high price and sell at a loss wondering what happened...

pm's are just the other side vs. the dollar and with what could be happening to the dollar (inflation) it's a good idea to hedge some...keep your house, keep some dollars, and keep some pm's and it never hurts to stock up on other commodities that will rise in value... as far as pms being a way to gain alot of wealth I look it that idea coming from the same people that continue to throw their money away on the next "investment fad" and still wondering where all that money went when they bought all those cases of bowman chrome baseball cards back in 2001 looking for that "Elusive Autograghed Albert Pujols" that's worth 1/2 of what they paid for the cases...


Alex

 

i agree but does whiskey count lol . i bought coins at a good bit below spot as of now and i am looking for advice on what i should do with them coins , now i live in the eu . will euro keep going or will it fall.
something like the way people fear the dollar could go. and i agree %100 there is more things worth more than a piece of rock.
at the end of the day gold is a piece of rock. you cant eat rock.

 

You also can't eat cash, stocks, bonds, real estate, annuities, artwork, foreign currencies, certificates of deposit, treasury bills or notes, futures, options, ETFs, ETNs, mutual funds, limited partnerships, or any number of other investment vehicles. Why this particular requirement is applied to gold/silver and not to any other investment is beyond me.

 

In order to "get rich quick" on silver you'd already have to be "rich" enough to buy enough and turn it quick when the price goes up a dollar or two.
In other words, you'd be getting a bit richer as it were.

We sell a good deal of silver and gold at work. Some come in once a week or so and drop $50-100. Others come in maybe once a month and drop thousands.

What I notice is that the vast majority of these folks do it for the same reasons. Basically a hedge against inflation and a store of phusical wealth.
They are not into it to get rich.

 

Good post. I think these posts are healthy here in the PM section just for making everyone think why they are accumulating PM's. I myself bought my "position" a long time ago and only buy PM if I happen to buy some coins I like. However, I am daily reading the general press, (numismatic and PM press always says "buy more, the end is near"), listening to how many people suggest PM investment. When it gets near the fever pitch it was in 1980 I am selling all PM short of true numismatic coins. Its all cycles, like dot com stocks, real estate, REIT's, etc. I wait until the most people are advocating them, then you know its time to get out.

Btw, did you know that stock brokers opinions are about the best COUNTER indicators? Meaning the stocks that brokers recommend most are the most likely to go down. Just something to think about. I have said it many times, real money is made when either no one is looking or everyone hates something.

 

If it was easy to get rich quick with bullion, this board would be full of the filthy rich. But, since that isn't generally the case, I don't need to elaborate further. It's healthy to have some PM's in your portfolio, but like the op mentioned, to dump all your other investments to buy only PM's is irresponsible, to put it kindly. I use my own investments as an example. My stocks have outperformed gold and silver, even at their peeks. The reason is because with PM's you, as an investor, have no insight into what metals will do tomorrow, or a year from now. With stock, you can do some research and study and make wise choices based on a multitude of deciding factors about what that investment is going to do in the future. It boils down to chance or knowledge. Not many people become rich by chance.
Guy~

 

I don't agree. Gold and silver have fundamentals that can be analyzed as effectively as stocks. You can look at the cost of production, total annual production, total demand, and central bank activity [accumulation or distribution]. In many ways, this is easier than analyzing a company because there are fewer moving parts and no management that might put their own interests ahead of shareholders. Several years ago it was pretty easy to analyze silver fundamentals when the price was much lower and conclude that either (1) the world will have to live without silver, or (2) the price would have to rise. Today the case is a much closer call but still favorable. Perhaps the quadruple in gold and silver prices over the past decade lagged behind your stock portfolio, but for me this was an important return when most other investment classes underperformed.

 

You're right about the quadrupling in gold's price the past decade, but that was dependent on people having bought before that increase. You can bet I wish I had loaded up on it in the early 90's, but I, along with 99% of everyone, had no idea the base price would rise like it did. That is what makes me believe it's not as easy as other investments to predict and research futures on. It is possible, but I think blind luck plays into the equation more than knowhow.
Guy~