So Who Still Thinks Gold & Silver Are Great Investments ?

[Pete]

One of the primary reasons I assume most of us ( but not all ) buy gold, silver and maybe platinum is to preserve wealth whilst hoping for some upside.
Looking at the table below I wonder if we are all still as fond of this "investment" compared to the 10% gains we could have had on stock market funds or even a few percent on savings accounts. Had I just kept my fiat in a shoe box under the bed it would be worth 12% more than the silver gathering dust.

                3 month     6 month    12 month

Silver       - 9.36%         - 4.62%      - 12.17%

Gold         - 4.69%        - 4.26%        - 4.52%

Platinum  - 4.10%       - 6.19%        - 8.71%

[VonHaida]

I do, what goes down will go up Great time to buy

[GrahamDiamond]

Gold and Silver on the Rise Today Coinsters !!

[fiveshotdon]

Hope it keeps falling so I can buy more 🤑

[mr-dead]

I dont buy that much silver but how much have premiums adjusted to absorb that -12% ?

 

I also wouldnt say 12 months a reasonable amount of time to consider getting a return from pm's.

 

[sixgun]

And for those who bought in early 2011 they are much worse off. Abandon ship, it's sinking.

i look back on coins i have bought, sometimes they have been in the positive, sometimes to the negative. Am i reaching for a sharp knife in a warm bath, Roman style? Nah this is the nature of the investment when we are at this stage of market. This is one reason i do not log what i paid - i am not selling. i only know by going through my messages on silverforum and email account. i can work it out but i don't. i collect on the basis of weight. That is my guide not a fiat price. i am not worrying myself over i am up or down £X thousands.

i admit i have not been buying so much this year but that is b/c i have been investing in metals through Kinesis. Now is the time to keep topping up - this is when you get your average price down. Someone paid £35/ounce back in the day, now they pay £15/oz. So they average £25. What a bonus i say. The price is not acting according to real physical demand and the cost of production. Maybe this year, maybe next - i truly expect sometime next year the physical market will tighten to the point where price will move higher. Physical demand will be higher - several crypto - digital gold and silver backed currencies are coming online - the big one, Kinesis is fully active in March. They will be drawing down more and more physical - they are digital meets fully allocated physical, not the paper ETF shams. So i keep my metal and if not interested in Kinesis i would keep adding to the physical stack. 

[Lowlow]

I don't even look at it the way the OP frames it.

For me, and it's been this way since I was pretty young, what I actually have is all I have, and paper is a promise for the future that can be broken.  I don't think it WILL be broken (at least not tomorrow) but I'm a realest, and I don't want to be one of the people sitting around wishing I had done more to protect myself than I did if the time ever comes.  It's all well and good to sit around blaming everyone when it goes south, we saw that in 2008/2009, the blame fell on banks, on mortgage lenders, and everybody but the people who were borrowing excessively ... but none of that puts food on the table when you're hungry.  Paper is a promise of food, not food ... it lacks a number of essential nutrients such as digestible calories and protein, though it's probably a good source of dietary fiber.

Pretend the tractor trailers stop bringing food to the stores tomorrow, and prepare, then hope that never happens and live today.

[Roy]

I've never thought as gold (or silver) as investments, great or otherwise.

I have some investments, of which some are indeed great.

I just like holding gold. 

There is a thread on here about disposing of material possessions, electrical junk and the like, well I don't hold many of those now that gold has become their replacement.

 

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Added 0 minutes later...

I do miss my motorbikes though 

[HawkHybrid]

when I bought my first energy saving light bulb it cost me ~£8

(from memory). I worked it out that it would pay for itself in

3-4 years of average use. the next year it's price dropped. another

price drop the year after etc. (you can get similar bulbs for <£2

now). how did my investment go? every year after year 4 the

light bulb saved me some money as it would according to my

initial calculations(investment strategy). if you work on a sound

strategy with a realistic chance of success within a reasonable

time frame, does it matter that prices can sometimes go against

you? it's not about winning every battle, it's about winning the war.

 

HH

[Money2Metal]

A few months ago I was speaking to someone who was buying gold for the first time and he was shocked when I mentioned that the price also goes down. Gold was a great investment pre 2008, now I see it as more of a preservation of wealth with the added risk that it could go either way. Silver is more risky as you've got to factor in VAT and bigger premiums.

I bought post 2008 so I haven't seen any growth yet on my gold investments overall, but hoping it works out in the long term. I sold some of my silver to raise some emergency funds a few years back and I made a loss on that. I've slowly been buying more silver to replace it and am back up to my target, but if I'm honest (in my individual case) I should've stuck with gold. I do like looking at my silver though! 😀

[Pipers]

IMO Gold may go down to 1000usd or below people must invest at that stage not get rid heartened! We really do not know where the £ is going. 

[bluemoon]

I don't think the premiums on silver are a huge issue as long as you sell on the premiums too. You just need to sell to the right people at the right places (i.e not bullion dealers).

But gold and silver aren't really investments. Property, shares, stocks, etc are investments. I think the long shadow of 2011 is still making people hope for mega profits in PMs. That was a crazy bubble. I wonder if gold and silver were considered investments in the speculative sense before then, say in 2004. It was before I started collecting so I don't know what the vibe was then.

[Lowlow]

2 hours ago, bluemoon said:

I don't think the premiums on silver are a huge issue as long as you sell on the premiums too. You just need to sell to the right people at the right places (i.e not bullion dealers).

But gold and silver aren't really investments. Property, shares, stocks, etc are investments. I think the long shadow of 2011 is still making people hope for mega profits in PMs. That was a crazy bubble. I wonder if gold and silver were considered investments in the speculative sense before then, say in 2004. It was before I started collecting so I don't know what the vibe was then.

I think that depends on your definition of "investment".

If you're talking a typical trading view of investments, precious metals can be.

If you're talking a financial planner view of investments, precious metals can be.

If you're talking an "investment" like a college education, or a car to get you to work is an "investment", precious metals can be.

But if you're talking about an investment on an MBA philosophical kind of level, I'd agree, precious metals are not investments.  Investments in that sense are typically things you put your money into that improve the world and create wealth.  Examples would be things like investing to start a lemonade stand where there was none, putting people to work, creating a product that wasn't there, helping people have something to drink, and engaging in the economy for the betterment of all.  Precious metals "investing" doesn't really do that ... as Warren Buffet famously said " Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."

[RoughDog]

16 hours ago, Roy said:

I've never thought as gold (or silver) as investments, great or otherwise.

I have some investments, of which some are indeed great.

I just like holding gold. 

There is a thread on here about disposing of material possessions, electrical junk and the like, well I don't hold many of those now that gold has become their replacement.

 

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Added 0 minutes later...

I do miss my motorbikes though 

True.  I have never owned a smartphone or a vehicle.  Must of saved a fortune not buying those items.  Some smartphones are more expensive than an ounce of gold.  

[Pete]

Having read all the earlier comments it appears as if some members do not consider PMs as an investment.
About 8 years ago what got me stacking was the fact that there were dozens of financial advisers and financial gurus convincing us to invest in gold and PMs. Every day there was an email or a phone call from someone ( many from the USA ) trying to make a powerful case for buying gold.
If you wanted to buy a coin you possibly used Chards or BullionbyPost, the latter who had a very limited range of maybe 5 or 6 different coins.
They might have at any one time only 1 gold Maple and 2 gold Britannias in stock and HGM also had very limited inventory.
Now compare - lots of dealers and even advertising on TV from BullionbyPost and Rosland.
There was no Silverforum but there was an Australian forum that was similar.

My point about PMs as an "investment" is that had I spent the same quantum of cash in average performing UK equity funds at the same time as PMs then I would have seen my "investment" double almost in stocks & shares compared to flat-lining in gold and halving in silver.

[RoughDog]

According to the dictionary an investment is the investing of money or capital in order to gain profitable returns, as interest, income, or appreciation in value.

Gold and silver do not give returns as interest or income.  Some people will argue that it is not gold and silver that increase in value but money the decreases in value.  It's not really investing.  You could buy numismatics that increase in value, maybe.

[Lowlow]

14 minutes ago, RoughDog said:

According to the dictionary an investment is the investing of money or capital in order to gain profitable returns, as interest, income, or appreciation in value.

Gold and silver do not give returns as interest or income.  Some people will argue that it is not gold and silver that increase in value but money the decreases in value.  It's not really investing.  You could buy numismatics that increase in value, maybe.

By your strict read, a house can't be an investment ... unless you're renting it out.

[Lowlow]

2 minutes ago, Lowlow said:

By your strict read, a house can't be an investment ... unless you're renting it out.

In fact, by your read technically options, futures, and other assets that don't produce income or interest can't be investments, and that would include non-dividend paying stocks I would assume.  Stocks that don't produce income can rise in fall in price the same way that gold and silver do, and they do not generate any kind of income.

[sixgun]

29 minutes ago, RoughDog said:

According to the dictionary an investment is the investing of money or capital in order to gain profitable returns, as interest, income, or appreciation in value.

Gold and silver do not give returns as interest or income.  Some people will argue that it is not gold and silver that increase in value but money the decreases in value.  It's not really investing.  You could buy numismatics that increase in value, maybe.

Investments in gold and silver in the Kinesis currency system will produce a yield - so correct they do not give returns as interest or income but they will from March 2019 on wards.

i wrote on another thread that " The last circulating sovereigns were produced in 1925. A sovereign is £1 - the cheapest sovereign today at Hatton Garden Metals is £220. Over the last 93 years the paper Sterling currency has 1/220th of its 1925 value.  "

Do you consider that an investment? The dictionary defines investment as an intent - the intent to put money or capital into something to make profit. That is the intention but as we know many investments don't make a profitable return. Some call gold and silver a hedge against inflation - this is an investment. It is part of a strategy in an investment portfolio.

So according to the dictionary what is an investment is determined by the person performing the act. One man may buy a dozen sovereigns b/c he likes sovereigns and collects them, one might do it for speculative reasons looking for gold to rise relative to other investment vehicles, another might do it in case the bottom  falls out of the world. So if you don't see gold as an investment it isn't and if you do it is.

 

[RoughDog]

I only have one GCSE and they didn't teach any economics at the school I went to so you may be right.    I listen to what other people say and form an opinion.

I don't see a house as an investment, I see it as a home. 

If someone was to purchase something like junk food in bulk and sell it to people at a price higher than they paid, is it investing?  I don't think it is, like I said I've never had any lessons.

It would be increasing their money as they would make a profit.

The junk food could be houses, clothes, PM's or any stocks.

 

[RoughDog]

4 minutes ago, sixgun said:

Investments in gold and silver in the Kinesis currency system will produce a yield - so correct they do not give returns as interest or income but they will from March 2019 on wards.

i wrote on another thread that " The last circulating sovereigns were produced in 1925. A sovereign is £1 - the cheapest sovereign today at Hatton Garden Metals is £220. Over the last 93 years the paper Sterling currency has 1/220th of its 1925 value.  "

Do you consider that an investment? The dictionary defines investment as an intent - the intent to put money or capital into something to make profit. That is the intention but as we know many investments don't make a profitable return. Some call gold and silver a hedge against inflation - this is an investment. It is part of a strategy in an investment portfolio.

So according to the dictionary what is an investment is determined by the person performing the act. One man may buy a dozen sovereigns b/c he likes sovereigns and collects them, one might do it for speculative reasons looking for gold to rise relative to other investment vehicles, another might do it in case the bottom  falls out of the world. So if you don't see gold as an investment it isn't and if you do it is.

 

What is happening March 2019?

[sixgun]

1 hour ago, Pete said:

My point about PMs as an "investment" is that had I spent the same quantum of cash in average performing UK equity funds at the same time as PMs then I would have seen my "investment" double almost in stocks & shares compared to flat-lining in gold and halving in silver.

There is good evidence that gold is counter cyclical to stocks. Accepting that, you started buying at the wrong time - you chose gold when you should have chosen stocks. Now you should be ditching stocks and putting it into gold. Mike Maloney did a piece in one of his videos comparing gold with the Dow index - and how if you switched between the two at the right time you could have had tremendous gains but if you switched between the two at the wrong time you would have miserable gains or losses. It is easy with the retrospectoscope of course.

[RoughDog]

Wouldn't they both rise in price in the long term anyway?

[sixgun]

9 minutes ago, RoughDog said:

What is happening March 2019?

The Kinesis currency system fully launches - title of ownership over gold and silver in the Allocation Bullion Exchange vaulting system is digitised and recorded on a fork of the Stellar blockchain. These coins will be kept in a wallet and will be sendable, spendable, including through Visa/Mastercard and tradeable. There is a small transaction fee when the coins change hands and if you put fiat or metal into the system depending how you did it you will get a share of these fees. So having bought gold, created digital blockchain title of ownership as Kinesis coins (mint) which you send, spend or trade into the world and you will get a monthly income stream paid in coins as your share of the total pool of coins in circulation. i created a thread on Kinesis and put up videos etc etc on a regular basis.

[Pipers]

1 hour ago, sixgun said:

There is good evidence that gold is counter cyclical to stocks. Accepting that, you started buying at the wrong time - you chose gold when you should have chosen stocks. Now you should be ditching stocks and putting it into gold. Mike Maloney did a piece in one of his videos comparing gold with the Dow index - and how if you switched between the two at the right time you could have had tremendous gains but if you switched between the two at the wrong time you would have miserable gains or losses. It is easy with the retrospectoscope of course.

This is why most people lose money and they are bad investors.  The investor looks at the markets he then chooses the market he likes, the one that has a already risen, the one that Bloomberg and nearly all the pundits are stating is the best to invest in.  The punter puts his investment into the hot market only for that  market to fall within 2 years.  What the pundits do not tell you is they  do not make money telling investors to invest in dull markets.  Also the professionals need to unwind there positions so using Bloomberg plus pundits to bring inspired money to the table is a tactic used.  Example how many people invested in oil at or over $100 before the big sell off!!   I never once heard bloomberg stating oil was over priced!