The risk of having too much Gold in your portfolio?

Discussion in 'Gold' started by TreasureHunter, Aug 11, 2019.

  1. willrocks

    willrocks Well-Known Member Silver Stacker

    Joined:
    May 10, 2012
    Messages:
    6,028
    Likes Received:
    907
    Trophy Points:
    113
    SilverDJ asked about "dividend returning stocks and ETF's?", not about capital growth returning stocks.
     
  2. JohnnyBravo300

    JohnnyBravo300 Well-Known Member

    Joined:
    Mar 16, 2019
    Messages:
    603
    Likes Received:
    407
    Trophy Points:
    63
    All great reasons to buy gold. Thanks for making my point!
     
  3. Slimey

    Slimey Active Member

    Joined:
    Jul 20, 2019
    Messages:
    129
    Likes Received:
    155
    Trophy Points:
    43
    Yes sorry, I was just adding to your point about dividends falling. If interest rates go negative, the chase will be on for anything that has any kind of return. In turn the increase in share price at the expense of dividend return will attract those looking for short term capital gain. Like a positive feedback loop.
     
  4. leo25

    leo25 Well-Known Member Silver Stacker

    Joined:
    Jun 8, 2010
    Messages:
    2,938
    Likes Received:
    1,037
    Trophy Points:
    113
    Location:
    Sydney
    meh, All Ords was about $500 in 1979 (13x up) Gold was about $240 in 1979 (9x up). Give it 6 months and All Ords will be down and gold further up, then they might both be around 10x up from 1979. On average over time they perform about the same, so someone should pick whatever they feel more comfortable with. Pick half and half and you can't go wrong.
     
    oziwassabi and willrocks like this.
  5. JOHNLGALT

    JOHNLGALT Well-Known Member

    Joined:
    Apr 3, 2017
    Messages:
    2,247
    Likes Received:
    729
    Trophy Points:
    113
    Location:
    Country Victoria Australia
    Well, look what I just found in my YOUTube inbox.
    From Michael & Joe on Level 6 you know where.
     
    66rounds and Oddjob like this.
  6. SilverDJ

    SilverDJ Well-Known Member

    Joined:
    Nov 1, 2014
    Messages:
    3,665
    Likes Received:
    808
    Trophy Points:
    113
    Location:
    Australia
    But if you invested in a parcel of dividend paying shares that followed the index you'd be MUCH further ahead due to compounding, especially if you reinvested dividends into more shares.
     
    Slimey likes this.
  7. SilverDJ

    SilverDJ Well-Known Member

    Joined:
    Nov 1, 2014
    Messages:
    3,665
    Likes Received:
    808
    Trophy Points:
    113
    Location:
    Australia
    So a well run company that's making a profit will suddenly magically stop paying dividends because interest rates are negative? Why?
     
  8. leo25

    leo25 Well-Known Member Silver Stacker

    Joined:
    Jun 8, 2010
    Messages:
    2,938
    Likes Received:
    1,037
    Trophy Points:
    113
    Location:
    Sydney
    But but but.....If you invested in S1 lunar coins you would be better off still. We can go round and round.
     
    sgbuyer likes this.
  9. Timmy88

    Timmy88 Member Silver Stacker

    Joined:
    Mar 20, 2015
    Messages:
    38
    Likes Received:
    25
    Trophy Points:
    18
    Location:
    Melbourne
    It’s a circular argument and last time I checked circles don’t get you anywhere.

    Timmy
     
    66rounds, openeyes, JOHNLGALT and 2 others like this.
  10. JohnnyBravo300

    JohnnyBravo300 Well-Known Member

    Joined:
    Mar 16, 2019
    Messages:
    603
    Likes Received:
    407
    Trophy Points:
    63
    Wheels are circles. Their entire function is to get you somewhere. They have feelings too.
     
    Last edited: Aug 13, 2019
    66rounds likes this.
  11. willrocks

    willrocks Well-Known Member Silver Stacker

    Joined:
    May 10, 2012
    Messages:
    6,028
    Likes Received:
    907
    Trophy Points:
    113
    I don't think I said "suddenly magically stop paying".

    Phase 1
    This is just my opinion. I think those few well run companies that currently pay decent dividends will become overvalued. More money seeking inflation beating returns will move into those dividend producing stocks. Higher share prices and the same dividends will mean p/e ratios will suffer.

    Phase 2
    Economic slowdown will hurt a lot of sectors. Many sectors that return dividends right now probably won't during a recession.
     
    leo25 likes this.
  12. TreasureHunter

    TreasureHunter Well-Known Member

    Joined:
    Oct 29, 2012
    Messages:
    2,672
    Likes Received:
    246
    Trophy Points:
    63
    Location:
    Treasure Island
    So - should the "average person" focus on gold for long-term savings?

    I think 50 % PM's, 50 % currency is a simple, basically adequate strategy for the "normal" person who know nothing about
    sophisticated investment vehicles (like shares, bonds etc.).

    What do you think?
     
    mrsilverservice likes this.
  13. Slimey

    Slimey Active Member

    Joined:
    Jul 20, 2019
    Messages:
    129
    Likes Received:
    155
    Trophy Points:
    43
    You may end up with 50% paper weights and 50% bits of paper (plastic) that inflation mice have eaten a part of. Just like you would have if you had used this strategy in 1976-1980. By the mid 80's it would have been very apparent that this would be the worst choice. I believe the best you can do is not to fixate on an unbending formula based on guess work. Take the time to investigate, invest in what you know and understand and not to be greedy. Easy in theory of course. Those of us that have been watching this gold bull slowly develop over the last 18 years can see that end game is developing. This could take 6-10 more years to play out but it will have an end. It is a good time to take positions now keeping in mind that there will be a lot of pullbacks before it is all over.
     
    66rounds likes this.
  14. JohnnyBravo300

    JohnnyBravo300 Well-Known Member

    Joined:
    Mar 16, 2019
    Messages:
    603
    Likes Received:
    407
    Trophy Points:
    63
    The only risks people take is in making bad choices, not in the metals themselves.

    Buy when it's cheap and theres no risk. Buy when everyone hates it and its undervalued and theres no risk. Avoid numismatic nerd stuff and big premiums and theres no risk.

    Of course if someone buys on a spike they take a chance to lose but that doesnt have to be us. We will be selling at that time.
     
    66rounds likes this.
  15. mrsilverservice

    mrsilverservice Well-Known Member

    Joined:
    Feb 10, 2019
    Messages:
    842
    Likes Received:
    358
    Trophy Points:
    63
    Location:
    North of Tasmania
    Gold is a time proven insurance and looking at it as a stone cold investment is wrong in my opinion :)

    Other than cash what else can you put your hands on at a minutes notice that will get you out of a jam :confused:

    You wouldn't want over 80oz's of silver in your pocket when just 1oz of gold will do :D

    Gold is the worlds greatest insurance other than knowledge :)

    So can you have too much gold = No :D

    -

    -

    -

    -

    -

    The Book of Psalms Chapter 144 verse 4

    Man is like a breath,his days are like a passing shadow :)
     
  16. 66rounds

    66rounds Well-Known Member Silver Stacker

    Joined:
    Jun 22, 2019
    Messages:
    736
    Likes Received:
    622
    Trophy Points:
    93
    Location:
    Melbourne
    Gold is not an investment. It is a hedge against inflation and a store of wealth. Silver is not an investment. It is an industrial metal useful as a currency that many people gamble will rise significantly.

    Investments in physical precious metals make no sense. Savings in PMs do. Investments need to earn you money, not store or lose money.
     
  17. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

    Joined:
    Nov 15, 2010
    Messages:
    18,560
    Likes Received:
    1,902
    Trophy Points:
    113
    Location:
    昆士蘭
    Crypto?
     
  18. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

    Joined:
    May 25, 2018
    Messages:
    1,324
    Likes Received:
    673
    Trophy Points:
    113
    Location:
    Singapore
    Probably in comparison to property? How much is a typical house in sydney in 1976? Assuming $40k. How much would it be worth today? $1 million? So, it's 25x gain. Based on current trend, do you see an Australian house be worth $25 million in 45 years?

    If anyone knows about economics, this is not possible because real wages are not going to increase much further, and mortgage rates can't drop below zero. Or maybe it can?

    https://www.smartcompany.com.au/ind...he-median-australian-house-price-was-in-1976/

    But if mortgage rates can drop below zero, it might be more profitable to invest in bitcoin?

    More likely, what will happen is in 45 years, most jobs will be replaced by robots and the majority of people are jobless, living a basic wage that won't even buy you a house. Governments will build camps to house these people.

    This is for wealthy democratic country like australia. For non-democratic or poor country, there will be no basic wage and majority of people will be living in squatters.
     
    Last edited: Sep 13, 2019
    mrsilverservice and 66rounds like this.
  19. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

    Joined:
    Nov 15, 2010
    Messages:
    18,560
    Likes Received:
    1,902
    Trophy Points:
    113
    Location:
    昆士蘭
    No jobs? Who are these factories full of robots going to be producing goods for then? :)
     
    sgbuyer likes this.
  20. leo25

    leo25 Well-Known Member Silver Stacker

    Joined:
    Jun 8, 2010
    Messages:
    2,938
    Likes Received:
    1,037
    Trophy Points:
    113
    Location:
    Sydney
    20 years ago people said there won't be enough jobs because of the advancements in agriculture, robotics in factories and computers. Lucky people are "innovative" and the financial sector and government expanded massively with new jobs. I mean who else is going to move paper around, have 2 hour lunch breaks and scam other people? I doubt a stupid robot can handle those jobs. :rolleyes: oh and lets not forget all the YouTube and Instagram influencers!

    Yep the future looks very bright indeed...
     
    Last edited: Sep 13, 2019
    sgbuyer, openeyes and mmm....shiney! like this.

Share This Page