Discussion in 'Markets & Economies' started by 66rounds, Dec 15, 2019.
Please share your thoughts and insights below!
New member @jalbyau asked about a risk assessment for gold in another thread. According to this video (and the Gold to Dow Ratio), gold is cheap now and will be cheap regardless of spot price movements if the DOW continues to rise. Goes to show how deep the rabbit hole can get if one wants to time their large (100k+ buys) of gold and thus the benefits of cost averaging over time. For the average joe buying a couple grams a week, the main focus should be buying as much as one can afford as often as possible to build that stack up. When the shit hits the fan you wont care what you paid for it as its value will be multitudes more than what it cost you.
And heres a video explaining the importance of stacking fractionals and holding long term, measuring your wealth in ounces and not toilet paper fiat.
A common mistake many new stackers make (myself included) is over-extending purchases of gold and being forced to sell to pay for costs of living (rent, fuel, bills, groceries). By following a budget and buying a set amount of gold at regular intervals, one can buy their wealth in gold without having to ever be forced to sell. A good method is to build up a few ounces of fractionals and low premium gold, then switch to buying unallocated gold from your closest trusted dealer in regular small amounts. The important thing to remember is to never leave more in unallocated than you can afford to lose. You should convert to physical regularly (once a month or everytime you hit an ounce in unallocated). If you dont, you risk missing out in periods of peak gold demand if your dealer has no stock and can only exchange for the now worthless fiat. The benefit of unallocated is the low participation cost (no premiums, low conversion fees) and the ease of converting to fiat if you absolutely have to sell some gold in an emergency.
This channel is an absolute goldmine, so please forgive the thread spam. This video highlights the benefits of regular buying vs attempting to time the markets. Your downside risk is greater than your upside risk.
Really good videos and I share alot of his views.
I like how he makes the case for regular buying and how it averages out. I've always wondered about that and it seemed very close in my math. It's why I dont stress much over spot even tho its fun to watch and discuss.
The last few years every single week at payday Ive spent all my money on either paying down my mortgage and/or buying metals as regularly as I can.
My mortgage pay off plan is number one priority so I dont always get to buy metals after that but when I can I do.
I've only been keeping a minimum of cash at hand but Fridays are another payday so not a big deal.
Seeing what spot is at now I'm glad that I've been doing that!
I averaged down enough when silver was at $14 now I'm ahead on that too.
It's a fun game to play if you keep the faith.
Cost averaging works, but only if you don’t sell. I did a rough calculation of my gold which I bought in bulk quantities around 12 May 18, 25 Oct 18, 21 Jul 19 and 2 Dec 19, my average is around $1360 per ounce (spot). If I’ve bought everything in Oct 18 instead I will average less than $1250 per oz but it will be impossible for me to time it so well.
In my opinion, at the end of the day, it’s not so much on the cost price since pm will rise over the long term, but the number of debt free ounces accumulated during the period of lower prices.
To give an example, Warren Buffett can buy 10 million ounces of silver a couple days ago for spare change and even if he sells today, he will still make more than all of us on this forum combined has made from pm since day one. Of course he won’t do this because he isn’t interested in making a couple millions dollars at all.
I like to reflect on the past. If you look at it, while prices were marginally lower in Oct 18 ($1250 vs $1450 today), the sentiment was very much against gold then. The economy was good, the Fed was still raising rates, people were saying the Fed would raise rates like X more times in 2019, the stock market is going up (as it is today), bank interest rates were still on the rise (as compared to falling like a rock today), there's no talk of recession, you got to be crazy to buy gold at that time. I remembered Jim Rogers talking about sub-$1000 gold, Dent was talking about $700 gold. People on forums were talking about $5 silver....
But he would also take an associated risk with such a purchase. There is alway a risk reward relationship. The main point is to save isn’t it?
Gold and silver is a waste of time rude that share market high built on qe money
Well that made sense.
> Hates precious metals
> Spends all day on a precious metals forum
I see this as a contrarian indicator. Stocks can have a bubble, why not gold and silver? Think about this for a moment.
Yes of course, the billionaires are now busy with stocks (as they say ride the trend. Even Warren Buffett with 200 billion cash cannot ignore the trend - look how he is pushing the Apple bubble now) while slowly shifting to metals quietly.
Once the stock bubble blows finally, and there is no more to play, they will play the metal bubble, after they have accumulated tons quietly.
At the end of the day, it’s just a game so have fun!
I dont spend all day i browse the site while im on the toilet thinking about silver and how similar it is to what IM currently doing and hence I end up here. I honestly think this wave of QE money will last another few years yet so why buy a lump of metal the produces nothing generates nothing and goes nowhere.
Gold up. Silver up. Because of QE.
Any more insightful comments whilst you’re dumping instead of working?
Not like the stock market and I get dividends how much again does your silver earn you sitting there
I don’t own silver.
I own stocks for capital gain. Dividends are for losers.
You get both with stocks that's the point
Nope. It’s dividends or it’s capital gains.
I don't think anyone here is against stocks. Metals are for hedging and only part of the portfolio. I own some stocks, sold most of it a year ago. I still own some to collect dividend but very small amount. I'm still looking to buy stocks that are undervalued - most are not ,except for maybe the energy sector.
If I buy a stock at $ 100 and sell it for $1000 after 3 years that is a capital gain and if that stock pays dividends as well I can have my cake and eat it too.
Of course you can. But you won’t pick stocks that have the potential for that capital gain because you want dividends.
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