http://www.financialsense.com/contributors/peter-schiff/numismatics-are-fools-gold
Damn. Just when I'd fallen in love. O faithless, cruel world.
Damn. Just when I'd fallen in love. O faithless, cruel world.
Schiff on Numismatics - Fool's Gold
- Thread starter JulieW
- Start date
1oz silver kangaroo is $50, the proof $65 if you buy them new.
This is the borderline between numismatic and bullion in the case of the carded kangaroo, but because the price is fixed at $50 and not moving with the spot the coin is numismatic in my view. The quantity also a borderline decision regarding CGT. The real question is; How many collectable items you can buy under $500 and not effected with the GST. They are not a set so the under $500 value is valid regardless of the quantity.
This is the borderline between numismatic and bullion in the case of the carded kangaroo, but because the price is fixed at $50 and not moving with the spot the coin is numismatic in my view. The quantity also a borderline decision regarding CGT. The real question is; How many collectable items you can buy under $500 and not effected with the GST. They are not a set so the under $500 value is valid regardless of the quantity.
Seems like a guy just trying to push gold. Numismatics is no worse or better than gold, if you invest in it without any knowledge of the market you'll eventually lose, the difference is, to the blind investor numismatics is riskier but is also associated with higher returns than bullion.
As with anything, diversify. The author wants people to invest in gold and only gold for obvious reasons (he probably has a lot of wealth stored in gold); Storing all your wealth in gold is as foolish as storing all your wealth in numismatics. The effective portfolio balances risk with return through diversification.
As with anything, diversify. The author wants people to invest in gold and only gold for obvious reasons (he probably has a lot of wealth stored in gold); Storing all your wealth in gold is as foolish as storing all your wealth in numismatics. The effective portfolio balances risk with return through diversification.
Forge
Member
wwwww said:
So.. do you propose diversification through investment at the pokies as well? And.. Peter Schiff a gold only bug? Do your research...
Diversification is something worth understanding and then avoiding in most circumstances. It removes any chance of doing well and makes you inherently vulnerable to systemic risk.
G
Guest
Guest
[youtube]http://www.youtube.com/watch?v=ZgQpchLtEFU[/youtube]
hotel 46 said:
LOL.
How true. I wonder how many people here are really investors - if you're an investor it's only percentages you worry about. Who cares what face or design is on the metal you're buying to sell. We humans get emotionally attached to our things and from Midas onward the allure of gold has been known.
Perhaps next week I'll sell my favourite piece for whatever the market gives, just so I can harden my heart to disposal of the rest.
.... caught you looking!
Forge said:
"...investment at the pokies..." hahah! love the juxtaposition there Forge!
Forge said:
...and can you explain the statement, how does diversification create a greater exposure to risk?
IMO diversification is the ONLY valid investment strategy, whether this is diversifying across various forms of researched investments or just through differing forms of the same researched investment. At the end of the day, we as low-end investors have very little control over the markets we invest in (whether that be property/cash/bond/share/bullion/etc), so effectively we are making educated guesses as to whether anything remains a good investment at any point in time. In the example of numismatic or graded proofs it is more than likely true that the premiums afforded to these types of investments will be negated in the SHTF scenario, though they will certainly bring greater margins in the lead up. Why not hold a stack for non-premium's (pure bullion/low premium) and a stack for premium/speculation (proofs/numismatics/etc)? look at liquidating the later during the lead up and holding the former for the SHTF scenario? In the circumstance that you are suggesting, in holding a single form of investment or not diversifying your investment portfolio, and lets say in this scenario we are talking about holding only pure low premium bullion, your margins would be diminished compared to the diversified model. Also what happens in the event, god forbid, there is no SHTF scenario and the price of silver drops to say 30% of its current? i could guarantee the numismatic/proof portion of your investment would fare better than the alternative... saying this i certainly don't buy numismatics at a high premium, and i would be looking at around 15-20% over spot and under $500 CGT limit for this sort of strategy.
Personally i would never invest 100% in any single asset class. period.
Forge
Member
Apollo said:
Systemic risk, not risk in general. I.E. risks to the overall system. Very few asset classes are not exposed to the current 'systemic risk' we see facing the financial system. As such, a lot of 'diversified' portfolios are not so, in the face of the current situation.
At the moment, the overriding risk is that there will be a collapse/serious diminution of the financial system. To effectively diversify against this risk, you must have assets that are not subject (or only minimally subject) to the risk.
Primarily that means physical gold, with commodities (silver, copper, foods) being a secondary option, along with companies tied to both of the above.
Collectibles, not so much.
Forge said:
Ok, so you are saying that diversification without an understanding of the true exposure of your investments is what you are against (ie diversification into asset classes with an exposure to paper backed assets), not so much diversification between asset classes as a portfolio strategy? I tend to agree with this for any long term strategy though as an investor there are still reasonable margins in these areas, I think the main mantra would be knowledge here, you need to know what you are investing in and what exposures those investments have (specifically to areas of risk), that way you can manage your own investment strategy for the short/medium/log term. I agree collectibles in general would be a very high risk investment in the current economic environment though i could definitely see low-premium numismatic bullion products as a good investment as the sheeple begin the enter the market in the lead up to bust.