PMs vs Stocks- investing and the factors that sway their valuation

@Clawcoins you made good points and I would like to dive a little further into this time period. I don't think many would look at a 10 yr relationship that was bad for more than 7 and feel that it was a good one. 2008 brought our nation and the world as a whole some very interesting times and conditions. It was the time of a Global economic crisis that the world hadn't felt on that scale since the last world war, the mortgage banking balloon popping domestically and abroad, an employment crisis, a major shift in domestic political focus, a very long list of catalysts that would make this post too long for some to read. Cliffs note edition- it was a time that many felt changed the views on macroeconomics from assuming people still looked at historical economic events and planned/projected accordingly. Something like that would have to make way for some time of illogical adjustment because the logic had changed. But after that it seemed to go along as a inverse relationship (for the most part, I'm still trying to look at the general trend, not individual spikes and dips here).

 

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I guess I should have taken more time in planning the title for this one as it seems to have gotten lost in the sauce and misconstrued a bit. For the sake of correcting the perception of my intent I'll elaborate.
My intent was comparing PMs and stocks in regards to the factors that effect their valuation and how when one goes up the other seems to go down, and vise versa, which could be looked at in a sense as an inverse relationship.
Stocks are great wealth generators when due diligence and timing are at the forefront. It's impossible to know exactly what the market is about to do, but the factors that sway it are not hidden and many people can see the signs and adjust accordingly. I know sound investment practice is to set a plan of incremental buys based on entry price and expected growth and also the selling at times of stagnation (if in a more growth focused portfolio) to shift into positions with more potential, but if history has shown that on general downtrends the price of PMs increase, why are they not looked at as a valid option?
The general consensus of investing in PMs is to hedge, but why do we think that? An interesting point was made that it is too volatile to been seen as an investment to make money, then why is it viewed as a safe harbor?
High risk (More growth than income, but still factoring some income drip) is my wheelhouse because of my age and, after being presented with the different options and possible outcomes, was what I wanted to do. I understand that there are years of experience behind the thoughts being presented, and in that I find a personal eagerness to learn from it with respect for those that have been doing it a long time, but can we all step out of our current personal strategies and view this more objectively?

 

You keep saying how when one goes up the other goes down, even after people have shown you it doesn't.
If you already have your mind made up, what is the point of the "discussion"?

 

[QUOTE=" An interesting point was made that it is too volatile to been seen as an investment to make money, then why is it viewed as a safe harbor?[/QUOTE]
A wise man told me long ago to buy gold and then hope it goes DOWN in value.
When gold goes down, most things are good in the world. So, yes it is a safe harbor.
If you are a PM trader, then that's your business and you hopefully can make money on the volatility and on short term buy/sell trades. For the rest of us, gold and silver are not really investments, but rather a protection of value for some of our savings.

 

I've seen arguments referencing short term instances that prove my statement wrong, and I'm not standing on a soapbox preaching doctrine, so what's to say my mind is locked into this theory and I'm not looking for experience and knowledge to teach me otherwise? If you're tired of it you can unfollow the thread, that's your right.

 

@Two Dogs I have heard the same saying and think that it pretty much backs my statement of the inverse relationship. I feel that the "good" references the economy and consumer sentiment, reflected by the trending of the stock market. Would you agree?
I'm not a short term PM holder with intent to make money on quick flips I buy and set it to the side and forget about it. I'm moreso probing for input, that's all. Short term flipping was an area that I've participated in the past, guessing on trends and luckily landed right side up, but never really took the time to learn the metals market like I did stocks.
Whenever I'm presented with a "general consensus" I want to know why it's so. I'm not looking to challenge the establishment I'm just looking to see why it is the way it is...how it came to be from a different pool of knowledge. I'm used to chatting about old coins on here and when I started reading conversations in the bullion section it got some old gears turning.

 

"safe harbor" OR .. to limit one's exposure to losses.
Something that is close to the equivalent of cash which may (or may not) also rise with inflation. Which would make it, technically by that definition, safer than cash.

Cash will always be $100 = $100.
Of course a loaf of bread may increase over time, or it may decrease over time. It all depends. I know I actually pay less for the high quality bread today then I did 15 years ago as it's more common amongst more bread makers.

Gasoline .. I think it may be lower depending upon the exact time frames we analyze.

A car & house is definitely more expensive today than in 2009, but 2007?
Basically Durable Goods can be more expensive today than in 2009. Of course if one shifted production from North Carolina to China then it may be lower cost .. assuming the shift wasn't made to increase profitability instead of lowering cost. Of course that shift will reduce local manufacturing jobs and the local distribution channel jobs which may have a cascading effect on local restaurant jobs etc in a microeconomic analysis.

 

[QUOTE="@Two Dogs[/USER] I have heard the same saying and think that it pretty much backs my statement of the inverse relationship. I feel that the "good" references the economy and consumer sentiment, reflected by the trending of the stock market. Would you agree?[/QUOTE]
I don't really have an opinion on the relationship, inverse or not, of PMs and the stock market. I'm a long term player in both. Each has a role in my portfolio, tomorrow PMs and stocks each may go up, down or stay the same. Over twenty years, I'm pretty sure stocks will go up.

 

That's the entire problem. There is not one answer .. it depends how you want to ask the question.

PMs has turned from a primarily US dominated trading market to a Global trading market. UK has just started doing PM Futures. China wants to be the dominant trading location for everything including PMs, plus other locations. That's just for the primary markets. Then you have the ETFs which put a different spin on the entire thing, and physical sellers, etc.

But, it goes back to PMs do not have a revenue stream. It's not a company. It's not a Consumable good (well, it is with jewelry and manufacturing .. so there goes that). It's come to susceptibility of volatile large quantity trades as the "demand" for it is limited and more consistent to the local trading platform, which could cause other platforms to move, and cause buy/sell triggers. Fun stuff.

I do not really see it related to stocks anymore like it used to be conceived of in the old days where the market was much more consistent. I used to have some mathematical equations based on some input factors to give me a good idea of what to do with stocks or the market. With globalization and investor drive for higher returns, massive increases in revenue qtr over qtr, and drive for larger stock appreciations those equations are worthless.

 

Hahaha...I like the disclaimer, do you REALLY think for 1 second that ANYONE (at least any sane person) is going to make an investment decision based on what discussion this thread brings?

 

Invest in Corn Nuts. PM's are overrated.

 

Hey man it's called a CYA. There are people that do dumb things all the time and place the blame on others. That's what brought about the stickers on hairdriers, HOT on coffee cups, etc. Anything is possible. I mean I didn't expect anyone to come here to ask a rhetorical question with no purpose to feel like they have some and try to give the illusion that they have answers. If one did they'd probably just share them. Like others here have. But hey, I got one. Look at that.

 

Stock market is up today
So is Gold and Silver ....

 

I could not watch the market all day everyday. I will admit that I did when I first got into it, but unless I'm making a move I'll check it once or twice a week. For me it's what it closes at not the intraday movement. Also, it depends on what your gauge is as far as the market doing well or not. Just today, at close it looks pretty stagnant to me. Metals...not bad.

At close
DJIA +.45%
RUT -.56
SPX +.04

Au +.84%
Ag +.97

 

It didn't look stagnant if you owned Boeing stock. Seriously, the market is anything but stagnant now.

 

My point was you can't judge the current status of the market by one day's performance. I've yet to dabble in aviation/airline stock. At the time I was looking it was a bad move. I dove into orphan pharma and focus on that. Sounds like it's doing well for you though. Congrats!