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<p>[QUOTE=&quot;medoraman, post: 962905, member: 26302&quot;]PM&#039;s, like all commodities, can be a very good hedge in down market years. This hedge, though, comes at a price. There is a cost of storing it, which you must bear each year. This cost is either a safe deposit box, insurance, or the risk of loss. This cost is never accounted for by PM bulls. Also, many stocks and all bonds pay a yearly dividend than can be reinvested. PM do not have those either. These are the facts, and over almost any time frame you can state, unless you are intentionally trying to pick the most favorable comparisons, stocks will outperform any physical asset. I admit comparisons are hard due to government intervention, but go back to before 1933 and do any comparison of Stock return to PM and you will see what I mean. Regular stocks will outperform gold stocks for the same reason, you pay for the safety. That does not mean they are bad investments, it depends on WHY you are investing. Money in PM is sure better than wasting money on new cars, drinking, car racing, etc, so if that is what they are replacing, then its a net good investment always.</p><p><br /></p><p>Everyone has a different reason why they are investing, and what they are investing in, this is why markets change every day. I think what the Bears here are saying is to not ignore your normal investments, and do not go crazy with PM at these price levels. Stick a little &quot;crazy&quot; money in, but wait for a correction to pour more money into them as a portfolio balancing act. At least that is what I would advise.</p><p><br /></p><p>Of course, there are many Bulls here too, and they could be right. Maybe silver will be $50 in a year or two. If I knew I would not be working for a living. My perspective is just too many people are advocating PM right now, and that is sounding the alarm bells for me, just like in 1980. I still remember the day the Hunt brothers couldn&#039;t make their margin call and the silver house of cards came tumbling down. Btw, I hear a lot of silver people pointing out that the 16-1 ratio is out of whack and that means silver has to increase. I tend to say gold is overvalued now especially since gold is the metal of choice of newly rich Asians. To them a ratio does not matter and all that matters is how much gold they can accumulate. Trust me, I had to buy 4.5 ounces of gold for my Thai wedding recently lol.[/QUOTE]</p><p><br /></p>

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