Need advice: Buy gold now or over time?

Discussion in 'Wealth Creation & Management' started by SuprmeLeadr, Oct 22, 2019.

  1. SuprmeLeadr

    SuprmeLeadr Member

    Joined:
    Jul 16, 2019
    Messages:
    70
    Likes Received:
    45
    Trophy Points:
    18
    Location:
    Melbourne
    I have ~15k AUD in bank and ~ 3k AUD and USD physical currency.

    I don't want to have any cash on me besides the 3k above.

    I have 3.5oz gold and 100oz silver, most of which I bough this year just after the big move in June/July.

    I definitely want to get my money out of the bank, but I’m not sure what to buy with it.

    Stocks = NO, way too overpriced and I think there will be a major crash before the 2020 election.

    Bonds = NO, they have negative real rates

    Super = NO, too regulated, rather have my own stock portfolio if I ever wanted to buy stocks in the future

    Real estate = YES, eventually. Massive bubble now so ideally I’ll hold gold and wait until the crash and scoop up property at the bottom.

    So my only option is gold and silver.

    Do you guys think I should get move my bank into gold ASAP or spread it out over months/years to cost average my stack?
     
  2. 66rounds

    66rounds Well-Known Member Silver Stacker

    Joined:
    Jun 22, 2019
    Messages:
    1,730
    Likes Received:
    1,704
    Trophy Points:
    113
    Location:
    Melbourne
    Cost averaging is always better, less risk. With big buys you can make greater profit but risk greater losses as well. Personally I would just buy what I can at close to spot off the forums on a weekly basis.
     
  3. ozcopper

    ozcopper Administrator Staff Member

    Joined:
    Jul 17, 2009
    Messages:
    16,768
    Likes Received:
    2,824
    Trophy Points:
    113
    Location:
    Australia
    Agreed. Over time is better!
     
  4. JulieW

    JulieW Well-Known Member Silver Stacker

    Joined:
    Oct 14, 2010
    Messages:
    13,411
    Likes Received:
    2,704
    Trophy Points:
    113
    Location:
    Australia
    I've always just bought when I had the funds, so if you've the money on hand and you want gold then go for it.

    I don't know any of your personal circumstances but I'd be hesitant to only have 3k on hand. Just my conservatism really.

    I went through a stage of emptying my bank accounts in fear of a long dark night and bail-ins etc. What I learned was economies and ocean liners don't turn on a penny, and a bank account is pretty safe, all things considered.
     
    Silver260, Jason1 and 66rounds like this.
  5. Jason1

    Jason1 Well-Known Member

    Joined:
    Aug 9, 2019
    Messages:
    540
    Likes Received:
    550
    Trophy Points:
    93
    Location:
    Qld
    ^^^^^^ its good having a biggish chunk of precious metals and assets, but sadly you do need to keep a good chunk of fiat, just because its common for people to put all their money into assets, which seems like a good move however if something unforeseen happens you maybe forced to sell assets due to an unforeseen reason because you dont have the money on hand, the problem that can often face people having to sell assets like precious metals at the drop of the hat is you dont often get lucky enough to sell them at the right time, so you can lose money. So keep a good chunk of fiat for safety, dont put all your eggs in one basket. stacking fiat is not a bad idea as well.
     
    sgbuyer likes this.
  6. wrcmad

    wrcmad Well-Known Member Silver Stacker

    Joined:
    Jan 2, 2012
    Messages:
    6,360
    Likes Received:
    634
    Trophy Points:
    113
    Location:
    Northern NSW
    Actually, dollar-cost-averaging as a strategy is a statistical dog. A load of bunk.
    I have outlined why before on this forum, and it is yet to be refuted.
    All-in or nothing, says the maths. :)
     
    Slimey likes this.
  7. 66rounds

    66rounds Well-Known Member Silver Stacker

    Joined:
    Jun 22, 2019
    Messages:
    1,730
    Likes Received:
    1,704
    Trophy Points:
    113
    Location:
    Melbourne
    You are absolutely correct, but only for those who are not lazy traders and can appropriately read charts and time their buys. For part timers like me, if I went all in in 2011 I'd still be at a loss. Those of us who can't trade have to rely on averaging out over time.
     
  8. wrcmad

    wrcmad Well-Known Member Silver Stacker

    Joined:
    Jan 2, 2012
    Messages:
    6,360
    Likes Received:
    634
    Trophy Points:
    113
    Location:
    Northern NSW
    JulieW, sgbuyer and 66rounds like this.
  9. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

    Joined:
    May 25, 2018
    Messages:
    2,193
    Likes Received:
    1,241
    Trophy Points:
    113
    Location:
    Singapore
    I use a hybrid cost averaging strategy - don't know a better term. As in when the price is obviously cheap, I would buy a bigger batch and smaller bites when I feel that the price is high and it might correct. This would help with ROI while at the same time giving some comfort if the price plunges.

    The difficult is how to know that the price is cheap. For example, is $900 platinum cheap?? It's easy to see it on hindhight after the price has jumped. We all know $1200 gold is cheap, but when gold was at $1200, people are talking about sub-$1k.
     
    66rounds likes this.
  10. Revils

    Revils Active Member Silver Stacker

    Joined:
    Jun 20, 2013
    Messages:
    906
    Likes Received:
    62
    Trophy Points:
    28
    Location:
    Australia
    I like having a goal for a set % of your total assets in gold/silver/whatever. So when you have $$ put it in the asset class that is furthest under from your goal % if you don't have $$ then sell the asset that is most above. If you have all $$ then lump sum into your desired asset classes.
     
    66rounds likes this.
  11. JNS

    JNS Active Member Silver Stacker

    Joined:
    Oct 8, 2015
    Messages:
    490
    Likes Received:
    117
    Trophy Points:
    43
    Location:
    Traveller, Lives in hotel
    Yes, if i am on your position, will do it slowly overtime. Buying gold or silver is not an emergency unless there is a best deal. Meaning somebody is liquidating metals for an emergency. Having cash is always good in most cases.
     
  12. SilverDJ

    SilverDJ Well-Known Member

    Joined:
    Nov 1, 2014
    Messages:
    4,038
    Likes Received:
    1,254
    Trophy Points:
    113
    Location:
    Australia
    I'd say go for it too. You have decided to get it out of the bank, so get it out of the bank and buy metal.

    The solution to that is easy, get unallocated Perth Mint account and put in there. You can sell and have cash back the next day if needed.
    You can also move the cash over and set automatic buy limits and then wait. Could do it in say $2k chunks or something.

    Agreed. If the fear is the bank collapsing or whatever, that is unfounded paranoia.
     
  13. jroly

    jroly New Member

    Joined:
    Mar 31, 2013
    Messages:
    25
    Likes Received:
    11
    Trophy Points:
    3
    Location:
    Australia
    In the 2008 GFC, ANZ bank ATMs stopped working for a couple of days and people couldn't get their money out, some people thought they were insolvent if I remember things correctly.

    I don't believe in cost averaging nor buying everything at once but something between, you should try to buy when the prices are lower. I don't think holding gold is very good either because there is a lot of costs involved with buying and selling unless you do it through this site. I think Perth Mint unallocated gold is best, it's more liquid than physical gold, cost is 1% with a little spread and with the GoldPass you can transfer your Gold at no cost to other members so now you can make payments in gold. The Barring of Gold is expensive through the Perth Mint which is converting the unallocated to physical, but because you can use GoldPass there is no reason why someone would or would not want to swap you physical in exchange for GoldPass, I don't think this has ever happened before, I would like to see it.

    You want to have Cash, I would keep 33%-50% in Cash so you can take advantage of opportunities when they arise, 25% in PMs and 25% in Gold mining companies. If you are up to it, you can earn between 2%-4.5% paid in gold by investing with a fund https://monetary-metals.com/

    You want your savings working for you, but hoarding gold is the same as keeping money in a bank account, it's unimaginative and will hinder you and possibly wrong and bad thinking when you consider some philosophies, take for example The Parable of the Gold Coins which Jesus told when he was near Jerusalem, he told the story of a noble man whom left on a journey to become a king who gave a gold coin to each of his servants to entrust untill he returned. When he returned he summonsed his servants, the first one said he turned the gold coin into 10 gold coins, the man was pleased and gave him control of 10 cities. The second servant said he turned the gold coin into 5 gold coins, he was awarded 5 cities. The third servant still had the one gold coin, he said he went out and buried it so it couldn't be stolen. The man was very angry with him and said he can't be trusted with anything and took his gold coin and gave it to the man who had 10.

    So you have to be active and try to grow your gold, the correct way to value your net worth is the gold value of your assets, not the dollar value amount, unfortunately once you convert all your dollars into Gold, your net worth in gold is frozen and does not grow, so holding physical gold is only good for 10%-20% for insurance, other 80% should be in investments to increase your gold net worth.
     
    ozcopper likes this.
  14. alor

    alor Well-Known Member Silver Stacker

    Joined:
    Jun 16, 2011
    Messages:
    8,749
    Likes Received:
    1,951
    Trophy Points:
    113
    Location:
    Pulau Alor ;)
    you can buy, when there are available coins or blobs
    try to buy 4-5 items each time
    when the price drop
    this year 2019
     
    66rounds likes this.
  15. madaw1

    madaw1 Well-Known Member

    Joined:
    Dec 5, 2011
    Messages:
    1,453
    Likes Received:
    963
    Trophy Points:
    113
    Location:
    Great Western Country
    Definitely -buy closer to spot on forum or 1/10 or 1/4oz au lunar mouse 2019-as many as you can afford.
     
    66rounds likes this.
  16. JohnnyBravo300

    JohnnyBravo300 Well-Known Member

    Joined:
    Mar 16, 2019
    Messages:
    1,352
    Likes Received:
    1,025
    Trophy Points:
    113
    I'd buy metals and keep $200. Next week is another payday anyway.
     
    sgbuyer and 66rounds like this.
  17. dragafem

    dragafem Well-Known Member Silver Stacker

    Joined:
    Jan 16, 2012
    Messages:
    5,186
    Likes Received:
    454
    Trophy Points:
    83
    Location:
    Sunshine State
    And how do you determine the gold value of any asset(without putting any dollar value on it)?
     
  18. rap53

    rap53 New Member

    Joined:
    May 21, 2020
    Messages:
    7
    Likes Received:
    1
    Trophy Points:
    3
    I disagree. Your arguments are incorrect. For starters, returns on silver have historically run at less than 3% pa over the past 29 years, not 12.5% pa as you claim. This sinks your argument. Silver prices are very volatile, and given the relatively low long term returns, you risk making significant losses over the long term if you do not dollar cost average. Imagine if you had brought silver at $55 / ounce in 2011 in one hit........ The same applies to gold, although gold has returned around 5% pa over the same 29 year period.
     
  19. GoldenEye

    GoldenEye Well-Known Member Silver Stacker

    Joined:
    Dec 31, 2014
    Messages:
    1,227
    Likes Received:
    876
    Trophy Points:
    113
    Location:
    Melbourne, Australia
    I think that silver has had the disadvantage of previously being used as currency, and so many governments would have been selling their silver for the last few decades, and this would have suppressed prices.
     
  20. wrcmad

    wrcmad Well-Known Member Silver Stacker

    Joined:
    Jan 2, 2012
    Messages:
    6,360
    Likes Received:
    634
    Trophy Points:
    113
    Location:
    Northern NSW
    Nice that I grabbed the attention of half of your first 4 posts! Sheesh.

    Have a look when this was written - things have changed over the last few years as silver has shown itself to be a rubbish performer.
    If you are basing your argument on a projected 3% pa return, then you are would be idiot to put ANY capital into a silver investment, DCA or no DCA.
    I can return better than 3% per quarter with my eyes closed, and am disappointed if I return less than 3% per month - that's why I got out of silver all together.
     
    rap53 likes this.

Share This Page