Author Topic: Buying Gold/ Silver and Crypto before Market Crash  (Read 3422 times)

eli44

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Buying Gold/ Silver and Crypto before Market Crash
« on: December 09, 2018, 06:30:29 AM »
Hello my significant other thinks its a good idea to invest in Gold, Silver and Cryptocurrency before a market crash. Many are saying a crash is iminent.. Can you tell me your thoughts? is this a smart investment? we already have like 10k invested in Crypto. I am afraid of this and think its best to just stick to index funds. Tell me your throughts.
« Last Edit: December 09, 2018, 06:32:25 AM by eli44 »

eli44

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Buying Gold/ Silver and Crypto before Market Crash
« Reply #1 on: December 09, 2018, 06:33:58 AM »
MOD EDIT: Merged duplicate topics.
« Last Edit: December 12, 2018, 07:05:00 AM by arebelspy »

Sailor Sam

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #2 on: December 09, 2018, 07:42:46 AM »
Hey @eli44, I see that you're new. Welcome. Try entering this --> site:forum.mrmoneymustache.com crypto, into the Google search bar. You can start reading up on the MMM community's view on crypto. Change the search word to change the topic you'd like to read up on.

Also, just as a heads up, predicting a market crash on the forum is seen as fair point to ridicule you. You might want to integrate more, before starting down that path.

harvestbook

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #3 on: December 09, 2018, 09:19:25 AM »
Crypto is nothing but an idea. Gold/silver are useful metals that historically a lot of people have agreed to assign additional value to. None of these produce anything. It's said an ounce of gold would've bought you a nice suit a couple of thousand years ago, and will do about the same today.

Holding shares in the world's largest companies, especially when you own ALL of them, will give you ownership of some of their future revenues. Bonds give you a fairly reliable promise that the debt will be repaid on schedule. Growth, in other words.

"Many" are always saying something. As George Carlin says, "Think about how stupid the average person is, and realize half of them are stupider than that."

Axioligy

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #4 on: December 09, 2018, 09:28:47 AM »
No fiat currency has ever survived and I see no reason the dollar will be different, so from that perspective holding a smal portion of you portfolio (<5%) in prescious medals seems prudent, but it should be viewed as a way to store wealth... otherwise you’re just trying to time the market.

JAYSLOL

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #5 on: December 09, 2018, 10:28:53 AM »
Hello my significant other thinks its a good idea to invest in Gold, Silver anf Cryptocurrency before aa market crash. Many are saying a crash in iminent. Can you tell me your thoughts? is this a smart investment? we already have like 10k invested in Crypto. I am afraid of this and think its best to just stick to index funds. Tell me your throughts.

Crypto is a sinking ship, I dabbled in it for fun and even made a little money, but not because I made a smart investment choice - I GAMBLED AND WAS LUCKY.  Crypto does not create any sort of value on it's own, so the only way to make anything is to buy at the right time and sell at the right time to bigger suckers - the worst kind of market timing.  I strongly recommend to get that money out of crypto immediately.  Put it in a bond ETF if you think a stock market crash is coming, bonds typically increase in value when stocks go down, however moving money around because of emotional reactions to market conditions typically make you poorer than you would be buying and holding a set ratio of investments like stocks and bonds.  Gold/Silver are similar to crypto in that they don't create value, they can only be used as a "store" of value, but at least they do have some tangible and historic value, unlike crypto currency.  I currently have 6% of my (fairly small) net worth in gold and silver, and don't plan to let it get any higher than that (in fact, i won't buy any more until its back down under 5%).  I have a set Asset Allocation for my invested assets of 80% stocks, 15% bonds and 5% Precious metals that i plan to stick to no matter what.   

If you want truly great advice here, post a case study with your current net worth, how its invested, income, spending and how long you expect to keep working

Also read JL Collins Stock Series - https://jlcollinsnh.com/stock-series/

and The Worlds Worst Market Timer if you are worried about being invested in stocks during a crash - https://awealthofcommonsense.com/2014/02/worlds-worst-market-timer/


2Birds1Stone

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #6 on: December 09, 2018, 11:44:44 AM »
Definitely, just make sure to maintain a balanced asset allocation.

I would do 33% gold, 33% silver, 33% Bitcoin, 1% cash.

JAYSLOL

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #7 on: December 09, 2018, 12:20:54 PM »
Definitely, just make sure to maintain a balanced asset allocation.

I would do 33% gold, 33% silver, 33% Bitcoin, 1% cash.

Haha, love it. 

Telecaster

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #8 on: December 09, 2018, 12:49:35 PM »
Hello my significant other thinks its a good idea to invest in Gold, Silver anf Cryptocurrency before aa market crash. Many are saying a crash in iminent. Can you tell me your thoughts? is this a smart investment? we already have like 10k invested in Crypto. I am afraid of this and think its best to just stick to index funds. Tell me your throughts.

Investing in crytpo is God's way of telling you that you have too much money.

Blueberries

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #9 on: December 09, 2018, 03:56:47 PM »
Hello my significant other thinks its a good idea to invest in Gold, Silver anf Cryptocurrency before aa market crash. Many are saying a crash in iminent. Can you tell me your thoughts? is this a smart investment? we already have like 10k invested in Crypto. I am afraid of this and think its best to just stick to index funds. Tell me your throughts.

No, no, and no.  I can't articulate how strongly I feel about the "no" other than to say, you should never make an investment decision on "many are saying a crash is imminent".  It's clear you don't want to do it and it's clear you wouldn't know how to handle it.  Why do it?  Your SO will thank you years from now.

Capt j-rod

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #10 on: December 09, 2018, 04:05:05 PM »
Metals historically beat inflation at best. This is assuming that you don't buy when it is high LOL. I have some silver, but I got it dirt cheap from someone who needed cash fast. If you go the metals route be sure to buy investment grade bars or rounds. Sunshine mint or RMC. Please don't do this planning on getting wealthy. If you lived in Venezuela then you would have been a genius. In the USA? Not so much. As far as Crypto? Hell NO!

Car Jack

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #11 on: December 09, 2018, 07:07:57 PM »
I just bought $11k of BRK/B on Friday.  That's about as risky as I ever get.  I bought silver about 6 years ago before I knew better.  It's been soooo fun getting rid of that crap at huge losses.  Should have put my money under my mattress.

popcornflying

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #12 on: December 09, 2018, 08:33:36 PM »
No one knows if there will be a crash in stocks or metals or both, nor how deep the next crashes will be if they happen. Still, we can look at the 2007-2009 market to get an idea.

https://www.bullionvault.com/gold-price-chart.do has a historic chart of gold prices. We can click on the 20Y view to see how it behaved from 2007 to 2009. Gold had a high of $1032/oz in Mar 2008, a low of $683/oz in Oct 2008, and was in the $890-960/oz range in Mar 2009 (the bear market low for US stocks). Overall gold was volatile, and not very correlated to stocks. You can do the same exercise for silver at the same web site if you want to check for yourself.

Obviously, if you invest in stocks during a crash you will lose money. The major US stock indices fell over 50% from Nov 2007 to Mar 2009, though they were back to break even by early 2013.  One could argue that gold fell at most 35% over that time period and recovered faster, so gold was a better investment than stocks. My friend bought silver over 2007-2008 and was very happy with it.

sol

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #13 on: December 09, 2018, 08:56:02 PM »
Obviously, if you invest in stocks during a crash you will lose money.

Technically, investing during a crash is a fantastic thing to do.  It's investing before the crash that loses you money.

Buy low and sell high, friends.  If stocks are down, that's the time to be greedy. 

Telecaster

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #14 on: December 09, 2018, 09:49:35 PM »
Obviously, if you invest in stocks during a crash you will lose money. The major US stock indices fell over 50% from Nov 2007 to Mar 2009, though they were back to break even by early 2013. 

Bullshit.

If you held stocks beyond 2013 (let's see, it is 2018 right now so that would include almost all of us) then you didn't lose money.   So, no it isn't obvious that if you invest in stocks during a crash you lost money. 

In fact the exact opposite is true.  If you invested right at the peak back in the fall of 2007 and simply did nothing you made a bundle of money.   If you continued to buy stocks you made even a bigger bundle of money.  Fall of 2007 was a good time to be buying stocks. 

Quote
One could argue that gold fell at most 35% over that time period and recovered faster, so gold was a better investment than stocks. My friend bought silver over 2007-2008 and was very happy with it.

Your friend has low expectations.  In 2007-08 silver was hovering around $14/oz.  Today, it is around $14/oz.  Congratulations?  Oh, and don't forget to adjust for inflation. 

If you cherry pick time periods, you can "argue" virtually any investment is better than stocks.  However, over any reasonable holding period (Holding periods like people here who are interested in a a lifetime of wealth have) gold and silver appreciate at about the rate of inflation. That is true as long as we have financial data, going back to Roman times. 

The only way to make money with gold and silver is by trading it.   Buying when prices are low and selling when prices are high.  Possible in theory, but the number of people who do it successfully and can prove it might be very close to zero.   

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #15 on: December 10, 2018, 04:14:28 AM »
No fiat currency has ever survived
The question is over what time frame - you could say no person has ever survived, either.  If the dollar fails 200 years from now, how is that relevant to your investment decisions?  How do you know it's going to happen in your lifetime?

soccerluvof4

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #16 on: December 10, 2018, 06:47:05 AM »
I don't think there is anything wrong with owning 2,3 or max 5% of your portfolio in some gold but not because your trying to time the market. Personally though to buy Crypto- Currencies no thanks!

MrOnyx

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #17 on: December 10, 2018, 06:59:11 AM »
Hey there, and welcome!

Moving some of your portfolio from one volatile investment (stocks) into an even more volatile investment (crypto) seems almost like the opposite way round to how it should be done - if, indeed, you do anything, as many of this forum yawn in the face of an incoming recession.

The market may crash, so be it. Just keep working and stuffing the greater portion of your salary into those index funds. Market crashes are a time of opportunity - there is no better time to invest in stocks than while they are on sale.

And no, do not pull out just because you think a storm is coming. People have thought a storm has been coming for years and still it hasn't. I feel sorry for those who are still nervously insisting "ANY MINUTE NOW!" with all of their cash drawn out of the market currently for the eighth month in a row, being nibbled away at by inflation while they wait for the time to pounce back into the market. Just wait it out. This is a buy-and-hold strategy. There's no dancing in and out here.

appleshampooid

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #18 on: December 10, 2018, 07:22:51 AM »
Gold/silver are useful metals that historically a lot of people have agreed to assign additional value to. None of these produce anything. It's said an ounce of gold would've bought you a nice suit a couple of thousand years ago, and will do about the same today.
I have also heard the same analogy but with a good rifle.

Indexer

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #19 on: December 10, 2018, 10:03:11 PM »
Hello my significant other thinks its a good idea to invest in Gold, Silver anf Cryptocurrency before aa market crash. Many are saying a crash in iminent. Can you tell me your thoughts? is this a smart investment? we already have like 10k invested in Crypto. I am afraid of this and think its best to just stick to index funds. Tell me your throughts.

Let's put this in perspective:

You are worried the prices of global businesses will fall. Those businesses produce millions of products, employ millions of people, own trillions of dollars worth of machinery, land, property, intellectual property, and they pay out billions of dollars per year in income to their investors(like you). You are so worried the prices of these businesses will fluctuate that you want to put your money in shiny metals and bits of computer code?


My store of value:  businesses(stocks), preferably the kind that operate in multiple countries and pay income. Sure, the prices fluctuate, but 20 years from now I'm more confident a diversified portfolio of global businesses will still be valuable(thanks to the income) than the debt of any country or the price of any particular commodity.

Axioligy

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #20 on: December 11, 2018, 03:29:54 AM »
No fiat currency has ever survived
The question is over what time frame - you could say no person has ever survived, either.  If the dollar fails 200 years from now, how is that relevant to your investment decisions?  How do you know it's going to happen in your lifetime?
I believe the British pound is the pound is the oldest fiat currency in existence (though its worth something like 1% of it’s original value) and the average life of fiat is around 40 years.  If I thought the dollar was about to collapse I would be recommending way more than 5% in precious metals, but it certainly could fail in my lifetime.

UnleashHell

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #21 on: December 11, 2018, 05:40:24 AM »
Hello my significant other thinks its a good idea to invest in Gold, Silver anf Cryptocurrency before aa market crash. Many are saying a crash in iminent. Can you tell me your thoughts? is this a smart investment? we already have like 10k invested in Crypto. I am afraid of this and think its best to just stick to index funds. Tell me your throughts.

your significant other can predict market crashes? and knows that gold and silver will go up. then what. knows when to sell? and buy what? I assume they are a multi billionaire and don't need to work ever again.

how about you sell the crypto and put 1/2 in index funds and 1/2 in gold. see which does better.

I'd be the one holding index funds if it was me.


PS - if in doubt then why not ask to see their crystal ball?

MaaS

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #22 on: December 11, 2018, 01:46:52 PM »
Hello my significant other thinks its a good idea to invest in Gold, Silver anf Cryptocurrency before aa market crash. Many are saying a crash in iminent. Can you tell me your thoughts? is this a smart investment? we already have like 10k invested in Crypto. I am afraid of this and think its best to just stick to index funds. Tell me your throughts.

Let's put this in perspective:

You are worried the prices of global businesses will fall. Those businesses produce millions of products, employ millions of people, own trillions of dollars worth of machinery, land, property, intellectual property, and they pay out billions of dollars per year in income to their investors(like you). You are so worried the prices of these businesses will fluctuate that you want to put your money in shiny metals and bits of computer code?


My store of value:  businesses(stocks), preferably the kind that operate in multiple countries and pay income. Sure, the prices fluctuate, but 20 years from now I'm more confident a diversified portfolio of global businesses will still be valuable(thanks to the income) than the debt of any country or the price of any particular commodity.

What an incredible way to phrase that. Great post.

Scandium

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #23 on: December 11, 2018, 02:21:52 PM »
Gold/silver are useful metals that historically a lot of people have agreed to assign additional value to. None of these produce anything. It's said an ounce of gold would've bought you a nice suit a couple of thousand years ago, and will do about the same today.
I have also heard the same analogy but with a good rifle.

A good rifle would have bought a nice suit thousand years ago? Guess it's true today too, unless you run into someone with two good rifles..

GuitarStv

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #24 on: December 11, 2018, 02:31:15 PM »
Buy tons of crypto.  A guy on youtube in a lambo surrounded by women in bikinis in front of a mansion told me to.  Seemed legit.

Abe

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #25 on: December 11, 2018, 08:31:54 PM »
Buy lots of crypto and you can do this:

https://breakermag.com/trapped-at-sea-with-cryptos-nouveau-riche/


Also, check out Bitcoin's and Ethereum's value over the last year. I think they already crashed!

Wintergreen78

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #26 on: December 11, 2018, 10:07:18 PM »
Hello my significant other thinks its a good idea to invest in Gold, Silver anf Cryptocurrency before aa market crash. Many are saying a crash in iminent. Can you tell me your thoughts? is this a smart investment? we already have like 10k invested in Crypto. I am afraid of this and think its best to just stick to index funds. Tell me your throughts.

It is good you are smart enough to see this coming and get out in time. I’m cashing out all of my index funds and buying cryptokitties. You have to make sure to get different types of kitties so you diversified.

Car Jack

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #27 on: December 12, 2018, 06:45:11 AM »
Crypto.....  You make me laugh so much. 

ATMD

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Re: Buying Gold/ Silver and Crypto before Market Crash
« Reply #28 on: December 12, 2018, 07:27:47 AM »
Crypto.....  You make me laugh so much.

Yes, it depends on mass adoption by governments and banks

It does not have intrinsic value.