What portion of savings should be in PM

[DarkChameleon]

6 hours ago, vand said:

I've had about 300% of my net worth in PMs if I did that

Ain't that the truth, I think if you cross more then 50% of you net then it's time to diversify into a bug out shelter, long term bunker, food insirance, the whole pepper hog cos then we going way over 100% GDP and then we may as well be in the EU...lol.

[vand]

On 22/02/2019 at 20:58, KDave said:

Excellent video that has answered my question thank you. Belangp has already thought about and answered this, almost everything we have said in the thread is in that video. 👍

To paraphrase - as we increase holding of gold to 25% of a portfolio we get increased volatility. Not increased risk. Volatility is only a problem if you are forced to liquidate to meet cash expenses. If you are not forced to liquidate, volatility is not dangerous. A debt default or loss of confidence in the currency is also risk (in the context of bonds). That risk increases as your exposure to bonds increases. So the pay off on a bond/gold portfolio is volatility offset with systemic risk.

That was my understanding, he said it better than I could.

The 5-10% figure is too low for a pension or long term investment, but perhaps for the average investor, the volatility offset against risk makes it a better amount for psychological reasons. 15% would be better. 20% has been demonstrated to be enough to cover a reset event to recoup the losses on the rest of the portfolio - that would be my minimum then for the systemic risk as I see it. More gold only increases the volatility, but not the risk (dependant upon your situation in regards to forced liquidation of course).

It is interesting that over his selected timeframe, 40% gold and 60% stocks is less volatile than a portfolio of 100% bonds. You get reduced volatility and none of the risks associated with bonds. I guess my using 40% gold back in the day instead of bonds was not so mad after all then. Not that I understood this at the time, it was more that I didn't like the risk/return on bonds. It has always amazed me that people want bonds as a safe thing to hold against stocks when something better is available, but I guess not everyone is comfortable with the volatility that comes with holding so much gold. 

It is important to point out that belangp must be ignoring any reinvested dividend for his historical return in stocks, as stocks have returned much better than the quoted 3% figure he uses. 

Makes a big difference!

[KDave]

Yes I think he admits this in his old videos I think you are right. His latest he compares stocks with dividends against other assets I think, I'll need to watch it again. He has a higher returns figure for gold not sure where it came from, possibly inflation adjusted. 

[sixgun]

On 21/02/2019 at 12:06, Oldun said:

15% minimum of anybody’s monthly salary should go towards retirement. So as for pms, I would recommend no more than 1.5% of your monthly income split 10% ag to 90% au...but that is just my advice.

Agreed a 15% saving in a retirement 'fund' is a good idea.

i think for most people a 1.5% monthly investment in precious metal would be tiny for practical purposes.

Let's imagine someone made £60k - so after tax say £48K - so 1.5% is £720 a year. i really don't know what Joe Soup's pay is but i suspect my hypothetical salary is on the generous side.

It doesn't leave much for collecting treasure. i expect those here are hardcore addicts b/c i know i spend a few pence more than the £720 a year.

[KDave]

 

The tools for building a portfolio based on outlook. 

Looks like I need to get over my mistrust and start researching bonds instead of stocks this time around. 

[AuricGoldfinger]

Is there any threads on bonds? I’d like to get into bonds but not sure the best way to go about it as its new to me..

Not got the spare funds to jump in straight away but like to do a lot of research before i jump into anything. 

[Caratacus]

 Lots of investors appeared to have been spooked by the "Italian Bond" issues & DM's huge derivative pile; (not ignoring the GDP to debt ratio). QE seems to have been directed towards the wrong parts of the economy

[KDave]

I am spooked by the 50 year bull market and the lowest interest rates in the history of mankind. Only one way to go logically speaking, but there is nothing apparently logical about the bond market. Lack of understanding on my part on how this part of the system works and why it is so popular with investors. I obviously don't understand it and need to start learning.  

[DarkChameleon]

10 minutes ago, KDave said:

I am spooked by the 50 year bull market and the lowest interest rates in the history of mankind. Only one way to go logically speaking, but there is nothing apparently logical about the bond market. Lack of understanding on my part on how this part of the system works and why it is so popular with investors. I obviously don't understand it and need to start learning.  

When interest rates are low owe people money, when interest rates are high have them owe you money.

[KDave]

Bonds are all about the sell low and buy high? I am already good at that, this should be a doddle. 

[Oldun]

5 hours ago, sixgun said:

Agreed a 15% saving in a retirement 'fund' is a good idea.

i think for most people a 1.5% monthly investment in precious metal would be tiny for practical purposes.

Let's imagine someone made £60k - so after tax say £48K - so 1.5% is £720 a year. i really don't know what Joe Soup's pay is but i suspect my hypothetical salary is on the generous side.

It doesn't leave much for collecting treasure. i expect those here are hardcore addicts b/c i know i spend a few pence more than the £720 a year.

Again, this was directed at the original poster  

[Lowlow]

I would say the question shouldn't be how much of your savings should be in PM, but, rather, how much of your CASH should be in PM.

Most of your savings is going to be in investments that pay a return, either interest or dividends, probably.

Cash, on the other hand, basically just sits there losing money vs inflation unless you're rolling it over in short term debt, so it makes sense to keep a good portion of your cash in precious metals at near spot.  You have to factor in the transaction fee, of course, and keep in mind that you can't liquidate large amounts of bullion at once without losing money vs. spot, but at least you're not in paper.  Of course you have to have a certain amount of cash, including emergency funds, etc, in any case, paper is the legal tender.

Most of the people on this forum, btw, aren't bullion investors, and are not actually investing in silver and gold, most of them are investing in collectibles which is a different kind of investment than pure bullion investing.

[vand]

10 hours ago, Lowlow said:

I would say the question shouldn't be how much of your savings should be in PM, but, rather, how much of your CASH should be in PM.

Most of your savings is going to be in investments that pay a return, either interest or dividends, probably.

Cash, on the other hand, basically just sits there losing money vs inflation unless you're rolling it over in short term debt, so it makes sense to keep a good portion of your cash in precious metals at near spot.  You have to factor in the transaction fee, of course, and keep in mind that you can't liquidate large amounts of bullion at once without losing money vs. spot, but at least you're not in paper.  Of course you have to have a certain amount of cash, including emergency funds, etc, in any case, paper is the legal tender.

Most of the people on this forum, btw, aren't bullion investors, and are not actually investing in silver and gold, most of them are investing in collectibles which is a different kind of investment than pure bullion investing.

 

This is true today, but it is only really a recent phenomena in the evolution of the fiat petrodollar standard. Not long ago banks made a clear distinction between "current" accounts and "savings" accounts. Current accounts paid zilch but you could access your cash instantly. Savings accounts tied your money up for a minimum period (usually 30 days) and gave you a guaranteed return that was above the prevailing inflation rate.  This was the last time you could say that banks were fulfilling their economic role of matching the needs of borrowers with the needs of lenders.  Today no such distinction exists anymore, because bank loans no longer represent someone elses' savings, they are just issues of new debt  created digitally. Unfortunately is a large part of the reason why we have such a dysfunctional economy now.

 

 

[Lowlow]

On 14/03/2019 at 04:09, vand said:

 

This is true today, but it is only really a recent phenomena in the evolution of the fiat petrodollar standard. Not long ago banks made a clear distinction between "current" accounts and "savings" accounts. Current accounts paid zilch but you could access your cash instantly. Savings accounts tied your money up for a minimum period (usually 30 days) and gave you a guaranteed return that was above the prevailing inflation rate.  This was the last time you could say that banks were fulfilling their economic role of matching the needs of borrowers with the needs of lenders.  Today no such distinction exists anymore, because bank loans no longer represent someone elses' savings, they are just issues of new debt  created digitally. Unfortunately is a large part of the reason why we have such a dysfunctional economy now.

 

 

True that.

[silenceissilver]

On 14/03/2019 at 08:09, vand said:

Today no such distinction exists anymore, because bank loans no longer represent someone elses' savings, they are just issues of new debt  created digitally.

 

 

Correct me if I'm wrong but as far as I know the last time bank loans represented someone else's savings was ca. 800 years ago, in Venice.

 

[cravethatcoin]

I like to be around 20%, that works well for me let's me sleep easy and night without having all my eggs in 1 basket.

[Coolsmp]

Gold and silver are money everything else is credit. Said some wiseman.

Its always good to diversify your portfolio. Having more than one property is helpful, premium bonds are another but only worth it if youve got the maximum amount, investing in cryptocurrency is another. And prehaps buying some euros in cash from time to time throughout the year. Its stops you spending your pounds and is helpful when you go on holiday and then realise youve got all your spending money already. These are just a few of my investments but they work for me. I know other people will have lots of ideas and this thread has revealed.

Keep stacking people!!!

[DarkChameleon]

Keep it at 10%...that way the market falls your pm's offset some..if the market rises your pm's drop...if you have no money in the market and want returns then gold and silver are not it..you want set income like MUNI's.