The risk of having too much Gold in your portfolio?

TreasureHunter

TreasureHunter

Well-Known Member
What are the risks of having "too much" of your savings/investments in solid Gold?

Peter Schiff recommends "only" 10-20 % PM's in the portfolio, 2/3 of which in Gold, 1/3 in Silver.
For a permabull gold seller (Schiff), his figures surely are modest.

Would you save 40-50 % or even 75 % in Gold? What could you lose after all?
(we're excluding properties/land/homes/cars/art, we're talking about the average person here, portfolios of max.50,000 USD)
 
TreasureHunter said:
What are the risks of having "too much" of your savings/investments in solid Gold?
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You are then reliant upon capital gains (or currency devaluation or however you want to look at it) for appreciation. Metals pay no dividends so you get no compounding over the long term.
 
If you had placed 100% of your capital into an investment house/houses in Melbourne in the early 2000's you would now be set for retirement.
There is nothing wrong with placing all your eggs in the one basket.....just make sure you keep a good eye on that basket.
Fractals show an eventual gold price around $8000 which would be close to the inflation adjusted high of 1980. This is 5 times the price of today. Invest in the gold mining stocks and you will get 10 fold or more. An investment of $150,000 now into a reputable gold miner will give you a decent pension when you eventually sell.
 
SilverDJ said:
You are then reliant upon capital gains (or currency devaluation or however you want to look at it) for appreciation. Metals pay no dividends so you get no compounding over the long term.
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True, but with Gold you can gain more than with a tiny interest savings account. We are talking from the average person's point of view.
Banks erode savings.
 
TreasureHunter said:
True, but with Gold you can gain more than with a tiny interest savings account. We are talking from the average person's point of view.
Banks erode savings.
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Sure, but when you talk dividends you are talking shares or interest paying indexes.
 
There is no risk to gold. It's the ultimate safehaven for a reason.
How can you be taking a risk with real money.
 
At this point in history, there's probably more risk of having too much cash or real estate in your portfolio.
 
JohnnyBravo300 said:
There is no risk to gold. It's the ultimate safehaven for a reason.
How can you be taking a risk with real money.
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If you had bought gold in the last gold bull run 1976-1980 and kept it, you are wayyyyy behind. Forty years later gold is still only the equivalent of $150. No rental return, no dividend, nothing. It is not 'THE' ultimate safe haven, it is 'A' safe haven. Raincoat for winter, thongs for summer. Everything has its time and place.
 
Slimey said:
If you had bought gold in the last gold bull run 1976-1980 and kept it, you are wayyyyy behind. Forty years later gold is still only the equivalent of $150. No rental return, no dividend, nothing. It is not 'THE' ultimate safe haven, it is 'A' safe haven. Raincoat for winter, thongs for summer. Everything has its time and place.
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That's very true. However the world is clearly heading into negative interest rates. Asset that hold value will be a safe haven. The 1970s and 1980s are nothing like today.
 
willrocks said:
That's very true. However the world is clearly heading into negative interest rates. Asset that hold value will be a safe haven. The 1970s and 1980s are nothing like today.
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What about dividend returning stocks and ETF's?
Are all companies going to suddenly stop paying dividends for the next decade?
 
Yes, things are different than the 70's and 80's. The circumstances may be different but the results are the same. The negative interest rates, the trade war etc will all feed into the reasons why gold will probably end up between $5000 to $10,000 dollars. As in all situations, for every force, there is an equal and opposite force. Nothing is ever stationery, so the forces create an oscillation. The point will eventually be reached where the direction of the world economy will mean gold will fall out of favour. Just like 1980. Then, once again the world will swing away from gold
 
Slimey said:
If you had bought gold in the last gold bull run 1976-1980 and kept it, you are wayyyyy behind.
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Gold was on average about $180~ oz AUD between 1976-79, now it's over $2200. Can you explain how that puts you wayyyy behind?
 
$10,000 in the share market in 1979 vs $10,000 gold in 1979. Wayyyyyyyyyyyyyyy behind ( You are correct leo....not wayyyy behind...I should have added a lot more yyyyy's )
 
SilverDJ said:
What about dividend returning stocks and ETF's?
Are all companies going to suddenly stop paying dividends for the next decade?
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Cheap money may push stock prices up, but it won't drive bigger dividends. Dividends will shrink under zero or negative interest rates.
 
Dividends are irrelevant. Look at Newscorp, it was made clear to them many years ago that you can have dividend or capital growth, take your pick....they went for growth. When you have capital growth, either real or imagined, greed will drive the price through the roof. A bit like split window V.W.'s. The price went through the roof because everyone wanted a piece of the pie. It didn't matter that it was still the same underpowered, unreliable, basic bit of junk that it was. It was the greed factor that drove it northwards in price.
 
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