Bankers trying to talk down gold again

[Cointreau]

It's usually best to do the opposite of what they tell you to do.

http://www.mining.com/morgan-stanley-gold-price-wont-see-1300-again-92623/

[Pipers]

 Not a surprise to me.  With only HSBC Hong Kong predicting $1400 all the others are bearish.  What they don't understand is most investors buy Gold for long term investments.  Also Banks can't make money if people own Gold, for the banks equities, Bonds, unit trusts all make them more money as the bank gets a fee every time a client adjusts his her investments.   

[motorbikez]

Same old song trying to frighten the weak hands out of their gold, while Morgan Stanley will be buying all they can get their grubby hands on.

[HelpingHands]

''Morgan Stanley: gold price won't see $1,300 again''

 

It has today.  Their 'prediction' debunked within two days.

[motorbikez]

Yes I noticed that as well but didn't want to tempt fate.

[Jez]

The odd thing about this though...the other day in my economics class the teacher just started going on a random rant talking about gold and how he claims it is useless / archaic and that people / companies etc are better off investing their money into other more productive streams that can also yield possible greater returns and provide greater benefit to the companies.  

 

I'm not saying I agree with the guy and what he said.  But I do get the impression that this type of view is starting to become more and more prevelant among economists alike.

 

The one thing you can admit though that works in these guys favour, is how people who claim gold is a long term investment blah blah blah, but truth be told, gold has been a terrible long term performer (at least compared to stocks).  Look at the yields of gold over the last 100 years.  

 

"Money invested in stocks (the S&P 500 index stocks) all the way from from 1926 through June 22, 2013 has earned a compounded average of almost 7% per year in real terms. This money has been invested for 87.5 years. (By the way that compounds up to a total of 31,600% or 316 fold.)"

 

"Gold appears to have traditionally provided a real average annual compound return of 0 to 3%. The more recent figures for investments held since 2000 to 2009 are not long-term and have been higher but investments in Gold held since 2010 or 2011 have not done well. "

 

 Again, people can debate this as much as they want.  They can claim the stock market is going to collapse, the US dollar is going to collapse etc etc, but honestly, in all likelyhood, that seems like a long bet.  A big gamble, buying gold for the long term (and expecting big increases) is almost like betting on the collapse of the US economy.  Sure, the collapse might happen, but what's the actual % chance that it will?  0.01%? (just making this up here).  Still...0-3% is still a fairly good average return rate though.  So from that sense, gold is still a decent, albeit conservative investment.  I think there is a reason why people like Buffet are so against investing in gold though.

 

Again I can't predict the future, but at the same time I can't help but notice information like this and start thinking about the possible future of gold.

 

Honestly, I'm the type of guy who thinks gold should really be a part of a diversified portfolio.  People who claim they're putting ALL of their savings into gold / or silver are playing a risky game.  Sure, they can possibly make it big and earn a killing if gold or silver goes up alot.  But they can also lose alot if it doesn't.  OR more likely, they could have easily just made better returns elsewhere.  Gold / silver should just be a part of your portfolio, not your entire portfolio.  End transmission.   

[HelpingHands]

You should have said:

 

''Gold is Money.  Why would money have any yield?''

 

 

I would've said:

 

''Gold is Money.  Why would money have any yield, you freakin' half-witt?''

[motorbikez]

The odd thing about this though...the other day in my economics class the teacher just started going on a random rant talking about gold and how he claims it is useless / archaic and that people / companies etc are better off investing their money into other more productive streams that can also yield possible greater returns and provide greater benefit to the companies.  

 

I'm not saying I agree with the guy and what he said.  But I do get the impression that this type of view is starting to become more and more prevelant among economists alike.

 

The one thing you can admit though that works in these guys favour, is how people who claim gold is a long term investment blah blah blah, but truth be told, gold has been a terrible long term performer (at least compared to stocks).  Look at the yields of gold over the last 100 years.  

 

"Money invested in stocks (the S&P 500 index stocks) all the way from from 1926 through June 22, 2013 has earned a compounded average of almost 7% per year in real terms. This money has been invested for 87.5 years. (By the way that compounds up to a total of 31,600% or 316 fold.)"

 

"Gold appears to have traditionally provided a real average annual compound return of 0 to 3%. The more recent figures for investments held since 2000 to 2009 are not long-term and have been higher but investments in Gold held since 2010 or 2011 have not done well. "

 

 Again, people can debate this as much as they want.  They can claim the stock market is going to collapse, the US dollar is going to collapse etc etc, but honestly, in all likelyhood, that seems like a long bet.  A big gamble, buying gold for the long term (and expecting big increases) is almost like betting on the collapse of the US economy.  Sure, the collapse might happen, but what's the actual % chance that it will?  0.01%? (just making this up here).  Still...0-3% is still a fairly good average return rate though.  So from that sense, gold is still a decent, albeit conservative investment.  I think there is a reason why people like Buffet are so against investing in gold though.

 

Again I can't predict the future, but at the same time I can't help but notice information like this and start thinking about the possible future of gold.

 

Honestly, I'm the type of guy who thinks gold should really be a part of a diversified portfolio.  People who claim they're putting ALL of their savings into gold / or silver are playing a risky game.  Sure, they can possibly make it big and earn a killing if gold or silver goes up alot.  But they can also lose alot if it doesn't.  OR more likely, they could have easily just made better returns elsewhere.  Gold / silver should just be a part of your portfolio, not your entire portfolio.  End transmission.   

 

 

I tend to agree with most of your statement,the old saying don't put all your eggs in one basket in my view is a very good one.To me personally PMs are a pleasure to collect and look at they are also another diversification of your wealth and one of the eggs from the basket.

 

Buying your own property,starting and running your own business are also other eggs from the basket, as is a portfolio of shares, antiques etc.

 

You put all of your wealth into any( single) one of those and you are setting yourself up for a fall IMHO.

 

But at certain times in any financial cycle you may invest more in certain sectors,currently I am putting nothing into the stock market (the markets are sky high) but I am buying PMs funnily enough mainly with dividends from my share portfolio.

[Cointreau]

You should have said:

 

''Gold is Money.  Why would money have any yield?''

 

 

I would've said:

 

''Gold is Money.  Why would money have any yield, you freakin' half-witt?''

But money does have a yield HH. It earns interest in the bank.

However the meager interest it earns at present is not worth your while and does not reflect the risk involved in letting the zombie banks have ownership of it.

[HelpingHands]

But money does have a yield HH. It earns interest in the bank.

However the meager interest it earns at present is not worth your while and does not reflect the risk involved in letting the zombie banks have ownership of it.

 

Does it? The investment (risk) in the bank returns the yield.

[motorbikez]

Taking into account real world inflation (not the crap the government comes out with) the average yield of 2.5% on savings is actually a negative return.

[Cointreau]

Does it? The investment (risk) in the bank returns the yield.

Not sure what you mean, sorry.

[HelpingHands]

Not sure what you mean, sorry.

 

You said cash earns a yield due to the interest at the bank.  Money doesn't have a yield but the financial product you've invested in does even if it's lending money to the bank by putting it in a current account.

 

Money (cash or gold) isn't going to sit there and multiply like a Gremlin getting wet unless it's put to work.

[ChrisSilver]

Money moves from one area to another. Anyone who invests for 87.5 years into gold or the S&P is foolish as they are exposed to both the bearish and bullish cycles. And if your a buyer you only make money when you sell for a higher price than when you bought for. Looking at the silver and gold charts you can see that both gold and silver are very cheap right now, and in my view are a very good investment as I believe they are undervalued.

Depending on when you sell I think you will get more than an average 0-3% annual return. To be honest I will be happy as long as silver & gold make a return that counters out inflation, therefore holding there value. I look at it as more of a long term storage of wealth than a long term investment.

In my opinion you can make a far larger return investing in your own business (if your successful) and a safer guaranteed return investing in property. My ideal portfolio would be my own business(s), property, and 10-20% of my wealth in Precious metals as insurance (though PM is currently the majority of % my holdings) I don't currently trade the financial markets, and am not planning to, as for me personally I found it hard for myself to make reliable low risk profits in the market, you could build u your capital slowly all year and make a few % gain just to give it all back in a few loosing trades. And thinking a hedge fund is going to do a better job investing your money than yourself is foolish, if they were so successful they wouldn't need your money. they want your money as they get a huge % of the profits if they win, 70%+ on average and if they loose they loose nothing. My advise would be to only invest in assets which you have some sort of knowledge about, as risk comes from not knowing what you are doing.