Author Topic: Precious Metals  (Read 113090 times)

chicklets123

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Re: Precious Metals
« Reply #750 on: February 24, 2021, 09:02:36 PM »
Is silver still a good buy now?


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celerystalks

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Re: Precious Metals
« Reply #751 on: February 25, 2021, 04:55:43 AM »
Is silver still a good buy now?


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The price of silver is very volatile. Who knows.

Imanuels

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Re: Precious Metals
« Reply #752 on: February 28, 2021, 10:18:25 AM »
I'm getting concerned about my gold allocation. I kept a bit with the reasoning that it is inversely correlated to stocks and thus would be useful for rebalancing in an event of a market drop. The rising yields issue recently is casting some doubts on this plan.

celerystalks

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Re: Precious Metals
« Reply #753 on: February 28, 2021, 12:27:22 PM »
Gold should be viewed as an asset class, not as a buy once and then get rich speculation. If the desired gold allocation drops in a portfolio due to the price going down or other asset values increasing, it is appropriate to rebalance into gold. And likewise if the allocation increases beyond the desired target one should consider rebalancing out of some of the gold holdings.

BicycleB

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Re: Precious Metals
« Reply #754 on: February 28, 2021, 10:18:35 PM »
I'm getting concerned about my gold allocation. I kept a bit with the reasoning that it is inversely correlated to stocks and thus would be useful for rebalancing in an event of a market drop. The rising yields issue recently is casting some doubts on this plan.

Explain?

I thought yields were rising because higher inflation is anticipated. Isn't higher inflation good for gold?

Meanwhile, inflation is expected due to resurgent demand during/after COVID improvements. Stocks think the overall news is good despite a little inflation. If they stay high, wouldn't you want something to balance out their later fall?

How does all this make gold less useful as the hedge you're looking for?

Not doubting you, I read this thread to learn. Just wanting to understand.  :)

vand

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Re: Precious Metals
« Reply #755 on: March 01, 2021, 01:18:24 AM »
Gold sometimes behaves as a currency, sometimes as a commodity, and sometimes as a flight to safety, which is why its relationship with interest rates and inflation is not straightforward or consistent.

That said, gold tends to negatively correlated with the direction of real interest rates, which is why it took off after Corona panic, and then has struggled since the summer as bonds yields have been rising at least as fast as inflation

Gold's run in the 1970s coincided with a period of negative interest rates which bottomed in 1980 - a period during which paper assets got crushed, of course. And likewise, we can see that the period 2000-present has had largely negative real rates which has helped drive the secular gold bull market since then.

https://www.longtermtrends.net/real-interest-rate/
https://www.sunshineprofits.com/gold-silver/dictionary/real-interest-rates-gold/

*real rates being defined by the spread between the 1yr Bill & the rate of inflation

In order to convince me that the investment case for gold is weakened, you will have to convince me that real rates are going to have a sustained run above 0% - and I don't see that happening any time soon.
« Last Edit: March 01, 2021, 06:43:17 AM by vand »

Imanuels

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Re: Precious Metals
« Reply #756 on: March 01, 2021, 03:37:22 AM »
Thanks, BicycleB, I'm also eager to learn and therefore very greatful for all the feedback.
This is my situation (according to my IPS). Considering my age (33) and risk tolerance, I had originally chosen to have 80% stocks/20% bonds portfolio. However, due to the present situation with tiny or negative yields, I decided to avoid bonds and use another asset class that has a negative correlation with stocks. As the result, I have currently 7% allocation to gold. I sold the difference a couple of months ago to rebalance (unfortunately, had to pay taxes of course) and because generally, I don't feel comfortable having a large portion of my portfolio in gold since IMO it does not generate any real income (such as paying dividends).
Now, I have a small paragraph in my IPS that says: "A remark concerning Gold. When real rates are sufficiently positive, gold does poorly because investors prefer assets that pay interest. But when real rates are very low or negative, gold does well because investors prefer not to lose purchasing power on a “safe” investment. Accordingly, I will move out from Gold when the real interest rates start to increase again."
It is illustrated in the chart from: https://portfoliocharts.com/2020/08/21/metal-money-and-the-measurable-value-of-gold/

I think my concern has been answered by vand in the last post. Namely, the real rates is the key. I also don't think they will get positive in the nearest future.
« Last Edit: March 01, 2021, 10:15:24 AM by Imanuels »

ChpBstrd

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Re: Precious Metals
« Reply #757 on: March 01, 2021, 09:36:32 AM »
In order to convince me that the investment case for gold is weakened, you will have to convince me that real rates are going to have a sustained run above 0% - and I don't see that happening any time soon.

I also don't think they will get positive in the nearest future.

I think the chart demonstrates that high positive real yields are usually a detriment to gold's price, but also look at 2012-2018. If we are predicting a future this pessimistic for real yields, should we be surprised if gold doesn't rise, like it didn't during that timeframe of negative real yields?

IMO, this sometimes-it-correlates, sometimes-it-doesn't asset class is an inferior hedge compared to options, which are 100% predictable.

vand

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Re: Precious Metals
« Reply #758 on: March 01, 2021, 11:22:51 AM »
In order to convince me that the investment case for gold is weakened, you will have to convince me that real rates are going to have a sustained run above 0% - and I don't see that happening any time soon.

I also don't think they will get positive in the nearest future.

I think the chart demonstrates that high positive real yields are usually a detriment to gold's price, but also look at 2012-2018. If we are predicting a future this pessimistic for real yields, should we be surprised if gold doesn't rise, like it didn't during that timeframe of negative real yields?

IMO, this sometimes-it-correlates, sometimes-it-doesn't asset class is an inferior hedge compared to options, which are 100% predictable.

Its not a perfect short-term hedge. There's lots of stuff that drives the price of any asset and gold is no different, really.  If you want that then broad commodities and TIPs are also options, but again neither are perfect. Protecting your portfolio against inflation is difficult, which is why it presents a challenge to portfolio management.

Regarding gold's performance over the last decade, it was probably driven into its 2011 peak as the European debt crisis - you can see that real rates went very negative as 2011 unfolded, and then started clawing back to 0% by 2015. Gold itself bottomed at $1150 in the last part of 2015, so it fits pretty well. The real rate matters, but the direction of change also matters.. 2nd derivatives and all that which markets tend to price in way ahead of you can attatch a coherent narrative to the actual price movement so it makes it all seem rather random..

J Boogie

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Re: Precious Metals
« Reply #759 on: March 01, 2021, 12:43:00 PM »
Also good to keep in mind that an ever increasing percentage of the historical demand for precious metals as a store of value is being satisfied by crypto.

I am leaning into FNV right now because I think there will be some rotation out of the overheated crypto, but it remains to be seen if my thesis will play out.

I am actually against using crypto as a store of value because this causes it to become volatile which causes it to lose utility as a currency. And I am all for crypto, especially for those who live in nations with poorly managed economies / central banks.

BicycleB

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Re: Precious Metals
« Reply #760 on: March 01, 2021, 02:21:07 PM »
Thanks for the explanation, @Imanuels, and helpful additional comments, everyone. :)

waltworks

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Re: Precious Metals
« Reply #761 on: March 01, 2021, 02:29:47 PM »
Yeah, people currently think of crypto as electronic gold. That could hurt gold in the long run as older people die off/their gold is sold by heirs and younger people just go all in on crypto. Maybe.

It's a shame, because I'd love to see a useful/widespread/stable cryptocurrency kill off the credit card companies once and for all. If BTC had been designed intelligently that might be happening now.

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Re: Precious Metals
« Reply #762 on: March 01, 2021, 09:16:47 PM »
Also good to keep in mind that an ever increasing percentage of the historical demand for precious metals as a store of value is being satisfied by crypto.


Do we know that for sure?  Are crypto investors the same people who would have been gold investors? 

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Re: Precious Metals
« Reply #763 on: March 01, 2021, 10:22:46 PM »
Thanks, BicycleB, I'm also eager to learn and therefore very greatful for all the feedback.
This is my situation (according to my IPS). Considering my age (33) and risk tolerance, I had originally chosen to have 80% stocks/20% bonds portfolio. However, due to the present situation with tiny or negative yields, I decided to avoid bonds and use another asset class that has a negative correlation with stocks. As the result, I have currently 7% allocation to gold. I sold the difference a couple of months ago to rebalance (unfortunately, had to pay taxes of course) and because generally, I don't feel comfortable having a large portion of my portfolio in gold since IMO it does not generate any real income (such as paying dividends).
Now, I have a small paragraph in my IPS that says: "A remark concerning Gold. When real rates are sufficiently positive, gold does poorly because investors prefer assets that pay interest. But when real rates are very low or negative, gold does well because investors prefer not to lose purchasing power on a “safe” investment. Accordingly, I will move out from Gold when the real interest rates start to increase again."
It is illustrated in the chart from: https://portfoliocharts.com/2020/08/21/metal-money-and-the-measurable-value-of-gold/

I think my concern has been answered by vand in the last post. Namely, the real rates is the key. I also don't think they will get positive in the nearest future.
There's nothing wrong with a small gold allocation per se. But you need to realize the 1) it's expected long term real return is 0.00 +/-15% per year; and 2) it has no correlation with stocks or essentially anything else, not negative correlation, zero correlation. 0 returns, 0 correlation. The best way to buy in is through dollar cost averaging over a long period, to avoid accidentally buying at a high.

I saw a good hypothesis about the price of gold here: https://www.bogleheads.org/forum/viewtopic.php?p=5395727#p5395727. Market timer is a person I have followed (well, at least noted) because he made a highly entertaining thread on leverage during the 2008 crisis and ended up deep in debt. Reading it which was a formative experience to my investing.

J Boogie

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Re: Precious Metals
« Reply #764 on: March 02, 2021, 08:49:07 AM »
Also good to keep in mind that an ever increasing percentage of the historical demand for precious metals as a store of value is being satisfied by crypto.


Do we know that for sure?  Are crypto investors the same people who would have been gold investors?

No and no. Crypto has attracted tons of people outside of the usual investing community. But I am increasingly hearing big name investors mention bitcoin as a store of value worth a place however small in one's portfolio. And we are seeing crypto go mainstream as banks and corporations warm up to it.

vand

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Re: Precious Metals
« Reply #765 on: April 19, 2021, 03:28:58 AM »
PMs have been correction mode since peaking last August, but I think we have broken the primary downtrend now in and we are due for the next leg up.

I am still very bullish on this play; 25% of my portfolio is in PMs and another 8% in miners.

celerystalks

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Re: Precious Metals
« Reply #766 on: April 19, 2021, 11:26:43 AM »
PMs have been correction mode since peaking last August, but I think we have broken the primary downtrend now in and we are due for the next leg up.

I am still very bullish on this play; 25% of my portfolio is in PMs and another 8% in miners.

Yes. I agree.  Especially in the U.S. the government is going on a money printing binge.  This would case the price of PMs to go up.  All commodities really.  I would expect oil to do fantastically well over the next decade, too.

Syonyk

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Re: Precious Metals
« Reply #767 on: April 19, 2021, 12:56:22 PM »
Especially in the U.S. the government is going on a money printing binge.  This would case the price of PMs to go up.  All commodities really.  I would expect oil to do fantastically well over the next decade, too.

When everything is going up in dollars, it's far more likely that the dollar is just going down. :/

And, yeah.  Print a few trillion here, a half dozen trillion there, eventually you're talking about real money!

vand

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Re: Precious Metals
« Reply #768 on: May 07, 2021, 03:46:21 AM »
PMs have been correction mode since peaking last August, but I think we have broken the primary downtrend now in and we are due for the next leg up.

I am still very bullish on this play; 25% of my portfolio is in PMs and another 8% in miners.

While everyone is going FOMO over the crypto space, the precious metals have been quietly consolidating and have now confirmed they are in a new primary uptrend.

$2500 is the mid term target for gold.


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Re: Precious Metals
« Reply #769 on: May 07, 2021, 09:03:37 AM »
While everyone is going FOMO over the crypto space, the precious metals have been quietly consolidating and have now confirmed they are in a new primary uptrend.

$2500 is the mid term target for gold.

How much of the rise is gold rising, and how much is the dollar dropping as the trillions circulate looking for anything to buy?

vand

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Re: Precious Metals
« Reply #770 on: May 07, 2021, 10:16:49 AM »
While everyone is going FOMO over the crypto space, the precious metals have been quietly consolidating and have now confirmed they are in a new primary uptrend.

$2500 is the mid term target for gold.

How much of the rise is gold rising, and how much is the dollar dropping as the trillions circulate looking for anything to buy?

Well gold is going up measured in just about all currencies. I think that we are in a USD bear market and so the dollar will weaken against its trading partners, which will of course mean gold as well as other foreign assets will be relatively strong when measured in USD. 

My $2500 target is the equivilent of the 2011 top adjusted for inflation, but I think that will only mark the half way point of the bull market.

djadziadax

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Re: Precious Metals
« Reply #771 on: May 07, 2021, 11:30:46 AM »
I bought 1 oz of gold in the 2008 crash as an experiment. It was either gold or bitcoin (which was about $100 at the time I think, facepalm!) I bought the gold for $1825+tax. Todays price of gold, $1843, wohooo!

Plus, if I sell it, I have to pay 28% cap gains tax on any gain independent of where my income tax falls.

Glad I bought only 1 oz. If I had bought bitcoin at the time, well...

maizefolk

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Re: Precious Metals
« Reply #772 on: May 07, 2021, 11:36:43 AM »
I bought 1 oz of gold in the 2008 crash as an experiment. It was either gold or bitcoin (which was about $100 at the time I think, facepalm!) I bought the gold for $1825+tax. Todays price of gold, $1843, wohooo!

Plus, if I sell it, I have to pay 28% cap gains tax on any gain independent of where my income tax falls.

Glad I bought only 1 oz. If I had bought bitcoin at the time, well...

If it makes you feel any better, if you were making the decision on this experiment in 2008, bitcoin wasn't even an option option to you.

Bitcoin didn't come into existence until 2009, it wasn't easily purchasable until 2011 (I think? this one is more fuzzy), and its value didn't reach $100/coin for the first time until 2013.

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Re: Precious Metals
« Reply #773 on: May 07, 2021, 11:42:06 AM »
I bought 1 oz of gold in the 2008 crash as an experiment. It was either gold or bitcoin (which was about $100 at the time I think, facepalm!) I bought the gold for $1825+tax. Todays price of gold, $1843, wohooo!

Plus, if I sell it, I have to pay 28% cap gains tax on any gain independent of where my income tax falls.

Glad I bought only 1 oz. If I had bought bitcoin at the time, well...

Bitcoin didn't exist until 2009 and didn't hit $1 until February 2011.

RWD

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Re: Precious Metals
« Reply #774 on: May 07, 2021, 11:51:55 AM »
I bought 1 oz of gold in the 2008 crash as an experiment. It was either gold or bitcoin (which was about $100 at the time I think, facepalm!) I bought the gold for $1825+tax. Todays price of gold, $1843, wohooo!

Plus, if I sell it, I have to pay 28% cap gains tax on any gain independent of where my income tax falls.

Glad I bought only 1 oz. If I had bought bitcoin at the time, well...

If it makes you feel any better, if you were making the decision on this experiment in 2008, bitcoin wasn't even an option option to you.

Bitcoin didn't come into existence until 2009, it wasn't easily purchasable until 2011 (I think? this one is more fuzzy), and its value didn't reach $100/coin for the first time until 2013.

Gold wasn't $1,800 in 2008 either (topped out just above $1k). Are you sure you got your dates right, @djadziadax ?

The Palladium I bought back in 2010 for ~$800 has done very well (roughly equal to the stock market). The Platinum for $1700+ not so much...

chasesfish

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Re: Precious Metals
« Reply #775 on: May 07, 2021, 11:54:22 AM »
It would be nice to see Silver be able to hold closer to $30.

All of this is strange given the amount of money in supply...I'm not into all the precious metal conspiracy theories, but gold/silver should be something to maintain purchasing power and it really isn't right now.

djadziadax

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Re: Precious Metals
« Reply #776 on: May 07, 2021, 11:59:12 AM »
I bought 1 oz of gold in the 2008 crash as an experiment. It was either gold or bitcoin (which was about $100 at the time I think, facepalm!) I bought the gold for $1825+tax. Todays price of gold, $1843, wohooo!

Plus, if I sell it, I have to pay 28% cap gains tax on any gain independent of where my income tax falls.

Glad I bought only 1 oz. If I had bought bitcoin at the time, well...

If it makes you feel any better, if you were making the decision on this experiment in 2008, bitcoin wasn't even an option option to you.

Bitcoin didn't come into existence until 2009, it wasn't easily purchasable until 2011 (I think? this one is more fuzzy), and its value didn't reach $100/coin for the first time until 2013.

Gold wasn't $1,800 in 2008 either (topped out just above $1k). Are you sure you got your dates right, @djadziadax ?

The Palladium I bought back in 2010 for ~$800 has done very well (roughly equal to the stock market). The Platinum for $1700+ not so much...

You are right, maybe I bought it in 2010 or 2011...it was around the time of the crash and maybe I paid $1600. The point is it has not moved that much...

Syonyk

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Re: Precious Metals
« Reply #777 on: May 07, 2021, 03:37:15 PM »
It would be nice to see Silver be able to hold closer to $30.

All of this is strange given the amount of money in supply...I'm not into all the precious metal conspiracy theories, but gold/silver should be something to maintain purchasing power and it really isn't right now.

Quite a few people in the metals wing of thought argue that paper silver is what's keeping prices down.  We'll see, but it certainly does seem underpriced.

chasesfish

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Re: Precious Metals
« Reply #778 on: May 07, 2021, 04:57:01 PM »
It would be nice to see Silver be able to hold closer to $30.

All of this is strange given the amount of money in supply...I'm not into all the precious metal conspiracy theories, but gold/silver should be something to maintain purchasing power and it really isn't right now.

Quite a few people in the metals wing of thought argue that paper silver is what's keeping prices down.  We'll see, but it certainly does seem underpriced.

That's been the argument forever...then the bullion stuff is still around for a spread over the spot price depending on demand and where you buy it.


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Re: Precious Metals
« Reply #779 on: May 07, 2021, 05:06:33 PM »
Yeah, but the "over spot" amount has been alarmingly large lately...

chasesfish

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Re: Precious Metals
« Reply #780 on: May 08, 2021, 04:26:49 AM »
Yeah, but the "over spot" amount has been alarmingly large lately...

The physical stuff is difficult to sell without a middleman.  I'm only getting $0.50 below spot at my local store and closer to spot less shipping to sell to APMEX.  Ebay has its own set of risks and they take a big cut too.

Anything else takes up a bunch of my time

vand

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Re: Precious Metals
« Reply #781 on: May 08, 2021, 05:57:01 AM »
I bought 1 oz of gold in the 2008 crash as an experiment. It was either gold or bitcoin (which was about $100 at the time I think, facepalm!) I bought the gold for $1825+tax. Todays price of gold, $1843, wohooo!

Plus, if I sell it, I have to pay 28% cap gains tax on any gain independent of where my income tax falls.

Glad I bought only 1 oz. If I had bought bitcoin at the time, well...

If it makes you feel any better, if you were making the decision on this experiment in 2008, bitcoin wasn't even an option option to you.

Bitcoin didn't come into existence until 2009, it wasn't easily purchasable until 2011 (I think? this one is more fuzzy), and its value didn't reach $100/coin for the first time until 2013.

Gold wasn't $1,800 in 2008 either (topped out just above $1k). Are you sure you got your dates right, @djadziadax ?

The Palladium I bought back in 2010 for ~$800 has done very well (roughly equal to the stock market). The Platinum for $1700+ not so much...

You are right, maybe I bought it in 2010 or 2011...it was around the time of the crash and maybe I paid $1600. The point is it has not moved that much...

so you can't even remember when you bought it or how much you paid for it.. are you even sure you bought 1oz? I mean, get you should probably get your facts very straight before posting something like that.

Syonyk

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Re: Precious Metals
« Reply #782 on: May 08, 2021, 09:47:15 AM »
so you can't even remember when you bought it or how much you paid for it.. are you even sure you bought 1oz? I mean, get you should probably get your facts very straight before posting something like that.

Yeah... 2008, low gold price in USD was $692, high was $1023.

If you bought for $1800, it was probably a "Regan Signature Series Proof Edition Value Guaranteed" or something similar that the various gold peddlers keep trying to push, promising they'll buy back at higher prices in the future, that have nothing to do with the actual price of gold.  An ounce at spot should have been around $800 for most of the year - I was in grad school and recall hearing ads for it on the 2AM radio coming back from the research park.  Would have been nice, I think that would be around 7% annual returns for the past 12 years or so, pretty low risk.  I was busy trying to figure out where ramen money was coming from and hypermiling a $150 car, so wasn't really in the cards.

The Bitcoin Genesis Block includes the phrase, "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks" - which was a newspaper headline on that date, and it was a long while before you could actually do anything with the stuff other than trade valueless representations back and forth.

It could have been 2011, in which gold did peak over $1800 before falling rather substantially, but Bitcoin was around $1-$15 during that timeframe, not $100.

So, the claim is either deliberately false trying to prove how gold isn't a good investment with false numbers, or is a misrecollection of having gotten totally screwed over by someone selling sucker coins for 2-3x spot.  I don't feel like looking for $100 BTC and $1800 gold, but maybe they crossed there together at some point...

maizefolk

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Re: Precious Metals
« Reply #783 on: May 08, 2021, 10:26:36 AM »
Both the gold and bitcoin prices are consistent with buying in 2013.

I know as I've gotten older it's easier for me to get the years of when things I remember happened wrong, particular within windows of living in the same place/working the same job. 2013 still felt rather crises-y with debt ceiling crisis and the federal government shutting down.

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Re: Precious Metals
« Reply #784 on: February 15, 2022, 08:45:21 AM »
Sorry for bringing up a dead thread.

I have several barrels of copper wire that need to be stripped. Would it be worth it right now with the way inflation is going?

ChpBstrd

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Re: Precious Metals
« Reply #785 on: February 15, 2022, 03:16:09 PM »
Sorry for bringing up a dead thread.

I have several barrels of copper wire that need to be stripped. Would it be worth it right now with the way inflation is going?
Just sell it dirty. The scrap yards will take it at a slight discount that isn’t worth your time.

JAYSLOL

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Re: Precious Metals
« Reply #786 on: February 15, 2022, 04:48:46 PM »
Sorry for bringing up a dead thread.

I have several barrels of copper wire that need to be stripped. Would it be worth it right now with the way inflation is going?

Depends how hard it is to strip the wire, and how much of a discount they pay for dirty copper.  I had a bunch that was super easy to strip and it was totally worth it, but I wouldn’t spend 30 hours stripping wire to save $100.  As for if it’s worth cashing in at the moment wether you strip it or not, would you buy a couple barrels of copper wire at the scrap yard price to speculate in copper?  If not, then you should probably just sell it and invest per the asset allocation in your IPS

vand

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Re: Precious Metals
« Reply #787 on: February 17, 2022, 11:27:45 AM »
Back through $1900, and everyone is still ignoring it and looking at other things... bodes well for a bigger move ahead.

vand

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Re: Precious Metals
« Reply #788 on: February 17, 2022, 11:31:40 AM »
I posted this elsewhere, but I just like the analogy so much I belongs on this thread too.

Gold is Dennis Rodman. It plays defence and keeps everything together.
https://www.youtube.com/watch?v=fdP6FxvZv5E

v8rx7guy

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Re: Precious Metals
« Reply #789 on: February 17, 2022, 12:15:33 PM »
Gold heading up again, probably cross $2,000 in the next couple of months maybe another all time high on the way.  My physical gold is one of those love/hate things, glad I have it right now though...

waltworks

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Re: Precious Metals
« Reply #790 on: February 17, 2022, 02:17:58 PM »
If my parents had purchased me an ounce of gold on my birthday in 1976, I'd have turned $130 into $1900 today.

Not bad at all!

If they had invested that $130 in the S&P 500 and never touched it/reinvested the dividends, I'd have $19,700.

-W

BicycleB

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Re: Precious Metals
« Reply #791 on: February 17, 2022, 04:40:26 PM »
If my parents had purchased me an ounce of gold on my birthday in 1976, I'd have turned $130 into $1900 today.

Not bad at all!

If they had invested that $130 in the S&P 500 and never touched it/reinvested the dividends, I'd have $19,700.

-W

If!  :)

Jokes aside, that's a great example of stocks' powerful growth.

***
I'm using gold as one of several diversifiers in my portfolio though. Started all too recently a few weeks ago when investing home sale proceeds but got lucky on timing. So far my gold miner (Barrick) and Other Commodities Producer (a potash and potassium company) have been the best performers in my whole portfolio. Including an allocation to physical gold, these three are up a combined 16% already, comprising the majority of portfolio gains in that time even though that group has less than 10% of my invested capital. Diversification and specifically the gold-and-commodities combo has caused my portfolio to rise despite rickety stock prices. It's very nice to have something that is rising when stocks and bonds both fall.
« Last Edit: February 17, 2022, 04:54:24 PM by BicycleB »

v8rx7guy

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Re: Precious Metals
« Reply #792 on: February 17, 2022, 04:45:02 PM »
If my parents had purchased me an ounce of gold on my birthday in 1976, I'd have turned $130 into $1900 today.

Not bad at all!

If they had invested that $130 in the S&P 500 and never touched it/reinvested the dividends, I'd have $19,700.

-W

https://portfoliocharts.com/2021/12/16/three-secret-ingredients-of-the-most-efficient-portfolios/

I'm not claiming that gold has high returns, but it can do amazing things when properly added to a portfolio.  Food for thought.

BicycleB

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Re: Precious Metals
« Reply #793 on: February 17, 2022, 05:16:26 PM »

https://portfoliocharts.com/2021/12/16/three-secret-ingredients-of-the-most-efficient-portfolios/

I'm not claiming that gold has high returns, but it can do amazing things when properly added to a portfolio.  Food for thought.

Wow! @v8rx7guy, that's an amazing article.

v8rx7guy

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Re: Precious Metals
« Reply #794 on: February 17, 2022, 05:18:27 PM »

https://portfoliocharts.com/2021/12/16/three-secret-ingredients-of-the-most-efficient-portfolios/

I'm not claiming that gold has high returns, but it can do amazing things when properly added to a portfolio.  Food for thought.

Wow! @v8rx7guy, that's an amazing article.

It's being discussed by members here.  I thought the same... very eye opening.

https://forum.mrmoneymustache.com/investor-alley/psa-read-tyler-of-portfolio-charts'-recent-blog-post-on-portfolio-construction/

waltworks

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Re: Precious Metals
« Reply #795 on: February 17, 2022, 06:20:32 PM »
https://portfoliocharts.com/2021/12/16/three-secret-ingredients-of-the-most-efficient-portfolios/

I'm not claiming that gold has high returns, but it can do amazing things when properly added to a portfolio.  Food for thought.

I stopped at "reports the 15th-percentile inflation-adjusted CAGR"... come on, that's crazy town.

-W

Radagast

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Re: Precious Metals
« Reply #796 on: February 17, 2022, 07:05:02 PM »
If my parents had purchased me an ounce of gold on my birthday in 1976, I'd have turned $130 into $1900 today.

Not bad at all!

If they had invested that $130 in the S&P 500 and never touched it/reinvested the dividends, I'd have $19,700.

-W

If!  :)

Jokes aside, that's a great example of stocks' powerful growth.

***
I'm using gold as one of several diversifiers in my portfolio though. Started all too recently a few weeks ago when investing home sale proceeds but got lucky on timing. So far my gold miner (Barrick) and Other Commodities Producer (a potash and potassium company) have been the best performers in my whole portfolio. Including an allocation to physical gold, these three are up a combined 16% already, comprising the majority of portfolio gains in that time even though that group has less than 10% of my invested capital. Diversification and specifically the gold-and-commodities combo has caused my portfolio to rise despite rickety stock prices. It's very nice to have something that is rising when stocks and bonds both fall.
Nice! Barrick is the only individual company I have ever recommended. That was back in 2015 though. I have actually spent a significant portion of my career as a consultant for Barrick, they probably account for about a fifth of all income I have ever earned. Not in the past couple years though. Personally, I favor the ETF RING.

Radagast

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Re: Precious Metals
« Reply #797 on: February 17, 2022, 07:08:23 PM »
https://portfoliocharts.com/2021/12/16/three-secret-ingredients-of-the-most-efficient-portfolios/

I'm not claiming that gold has high returns, but it can do amazing things when properly added to a portfolio.  Food for thought.

I stopped at "reports the 15th-percentile inflation-adjusted CAGR"... come on, that's crazy town.

-W
Yeah, I agree this is highly misleading. Portfolios with the worst 15th percentile returns should obviously correlate somewhat with those that have a high ulcer index. All of Tyler's metrics are pessimistic, and so plotting them against each other is pointless because they are measuring to a large extent the same thing. To be meaningful it would need to be plotted against mean or median 15 year returns.

vand

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Re: Precious Metals
« Reply #798 on: February 18, 2022, 01:59:23 AM »
https://portfoliocharts.com/2021/12/16/three-secret-ingredients-of-the-most-efficient-portfolios/

I'm not claiming that gold has high returns, but it can do amazing things when properly added to a portfolio.  Food for thought.

I stopped at "reports the 15th-percentile inflation-adjusted CAGR"... come on, that's crazy town.

-W
Yeah, I agree this is highly misleading. Portfolios with the worst 15th percentile returns should obviously correlate somewhat with those that have a high ulcer index. All of Tyler's metrics are pessimistic, and so plotting them against each other is pointless because they are measuring to a large extent the same thing. To be meaningful it would need to be plotted against mean or median 15 year returns.

I would argue that for the purposes of retirement planning, you absolutely need to be very conservative, so the 15th percentile is an idea level to pitch at. Why else does everyone here err on the side of caution of even the 4% rule when that is already a near worse case scenario?

Or to ask it another way, what is the minimum amount of insurance you want to be have should a worse case scenario unfold?
« Last Edit: February 18, 2022, 02:02:23 AM by vand »

waltworks

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Re: Precious Metals
« Reply #799 on: February 18, 2022, 07:05:37 AM »
People are stupid so they work way too long, but that doesn't mean paranoia is a good strategy.

Time can't be bought back, money is easy to make, you might as well bet on yourself. Investment results favor the optimistic, too.

-W