What are your thoughts on investing in gold coins?

[Anonymous]

Gold is countercyclical, which is why the poster who bought a few years ago did so well. Now does not seem the time.

Liquidity: it is always liquid, but dribs and drabs, not so much at a decent rate. Plus, the "coins" that are "currency" - they really aren't.

OP - do not get your investment advice from DCUM.

[Anonymous]

Anonymous wrote:

hedgehog wrote:

Anonymous wrote:I shudder at the thought. My parents bought a ton of gold and silver coins when gold and silver were high in the 70s, thinking they were making a good investment. Gold and silver prices then plummeted. They held onto those coins, hoping they would recover the losses. Boxes of coins in the basement, lugged with them every time they moved. I inherited them a few years ago, and since we don't have space for them we dragged those heavy, moldy boxes to a coin dealer when I was 8 months pregnant to finally get rid of them - for less than my parents paid 30+ years earlier.

Then you sold at a bad time. Look at this chart which shows the history of gold prices since 1970: http://en.wikipedia.org/wiki/Gold_as_an_investment

The pp doesn't say when they sold, but it looks like they probably sold about 2000 and really missed out. Should have kept lugging those boxes....

OP here - My feelings exactly. Gold was at a high around 1974 at $200 oz. It was never below that in the 2000's. Don't know how you could have lost money on them.
/news.bbc.co.uk/2/hi/business/7284184.stm
Here is an interesting story about gold prices and historical events.

No, that's not true. I remember gold taking off around 79. It was 800 an ounce. If you bought then, you were screwed. Gold is taking off again. How do you know you won't be like those suckers in 79 or 80?

[Anonymous]

Is platinum a better investment?

[Anonymous]

Anonymous wrote:Is platinum a better investment?

Precious metals are speculative investments. In 2008, platinum prices dropped more than 50%. The next year they doubled. In the next year, it could drop by half or double, and you can't know which is going to happen. Does this match your expectations of a good investment?

[Anonymous]

The thing about gold and TSHTF is: if things are really going to hell like that, who is going to be out there buying gold? Isn't its value somewhat subjective? I mean, sure it is pretty and all, and rarity will always drive up value, but if people are hungry, they're probably not going to be buying shiny objects. Or am I totally missing something? I just think that it's all risky. All investment is risky.

[Anonymous]

You need to distinguish between investing and speculating. investing is when you research a company and buy its shares or bonds after determining that it has good growth prospects, management etc. Sure, there is always some risk, but there is much less risk in buying, for example, shares in proctor and gamble than there is in speculating.

Buying gold is pure speculation: the only way you can make money is if you find a bigger idiot to buy it off you. shares like proctor and gamble actually generate an income through the profits of the company which go into dividends etc.

[Anonymous]

Anonymous wrote:The thing about gold and TSHTF is: if things are really going to hell like that, who is going to be out there buying gold? Isn't its value somewhat subjective? I mean, sure it is pretty and all, and rarity will always drive up value, but if people are hungry, they're probably not going to be buying shiny objects. Or am I totally missing something? I just think that it's all risky. All investment is risky.

Gold is a very good conductor. But there's not likely to be much of a market for electronic products if people are hungry.

[Anonymous]

I would not invest in gold. If your #1 concern is preservation of money and immunity from inflation, invest in an I-bond. If you must invest in gold, invest in a fund.

[Anonymous]

My broker says "commodities" are a good investment, inc. gold. But you should always balance your risk across multiple commodoties and multiple other investments. Don't bet the farm solely on gold.

[Anonymous]

I'm currently investing in gold coins from time to time. Mostly as a hedge, though -- I'm expecting (and kind of hoping, truth be told) to lose money on gold coins at current prices. If that happens, it's ok with me -- it means my other, larger investments are probably still doing fine. But we're in times that are scary from a debt perspective, and historically, debasement of currency is the go-to move for governments that can't afford to meet their obligations. I think of my gold as an insurance policy that I hope never to need, and if I take significant losses on it and pass the coins along to my kids someday, that's just fine. Also, I wouldn't buy any until I had a good cash emergency fund, and had paid off all of my high-interest debts.

[Anonymous]

A little off the subject. I inherited lots of gold- both coins and jewelry. Where is the best place to sell these things?

[Anonymous]

Anonymous wrote:The thing about gold and TSHTF is: if things are really going to hell like that, who is going to be out there buying gold? Isn't its value somewhat subjective? I mean, sure it is pretty and all, and rarity will always drive up value, but if people are hungry, they're probably not going to be buying shiny objects. Or am I totally missing something? I just think that it's all risky. All investment is risky.

This is also true, I think there was a post-apocalyptic movie when someone tried to buy some food with a gold coin, and was refused since the seller wouldn't do anything with

Also if we return to some sort of economy where money is being used as it was in 500 BC, we'd probably use what was relatively common: silver and copper coins from the before times, and then the emerging authorities will figure out how to make a mint (literally), melting down old US coins to make new coinage.

Again, for this to happen in this post-Depression economy, there'd be a phase where POTUS asserting her/himself as such in Manassas or Frederick would be a stretch, and would be at risk of invasion from Baltimore's warlord.

[Anonymous]

I don't think gold would be particularly useful in a TSHTF scenario, and think that a grid-down Max Max kind of deal is extremely unlikely in any event.

But gold explicitly backed the U.S. dollar until 1971 -- much more recent than 500BC -- and to me its an open question as to what extent sovereign gold reserves still matter as implicit backing of major currencies, even though there is no official role for gold anymore. It is not outside the realm of possibility that competitive currency devaluations could create an opportunity for gold to serve a significant monetary role in the not-too-distant future.

Gold has been money throughout human history, and can't be inflated away, so to me holding a little bit of physical gold is just being prudent. But I'm not a fanatic on the point, and reasonable minds can disagree. Certainly debt reduction is likely a far superior investment to gold, so for a lot of people the question is moot anyway.

[Anonymous]

Anonymous wrote:I don't think gold would be particularly useful in a TSHTF scenario, and think that a grid-down Max Max kind of deal is extremely unlikely in any event.

But gold explicitly backed the U.S. dollar until 1971 -- much more recent than 500BC -- and to me its an open question as to what extent sovereign gold reserves still matter as implicit backing of major currencies, even though there is no official role for gold anymore. It is not outside the realm of possibility that competitive currency devaluations could create an opportunity for gold to serve a significant monetary role in the not-too-distant future.

Gold has been money throughout human history, and can't be inflated away, so to me holding a little bit of physical gold is just being prudent. But I'm not a fanatic on the point, and reasonable minds can disagree. Certainly debt reduction is likely a far superior investment to gold, so for a lot of people the question is moot anyway.

Agree with you on the Mad Max thing, and let's face it: 99% of us would be dead in that case. I had to leave some survivalist fora or boards that became survivalist because well, a number of the posters were right-anarchists who deep down were hoping this would happen.

Gold will likely hold its value (to some extent) in an inflationary scenario, and a 1970s Britain scenario is far more likely: crumbling empire, 10-20% inflation, some folks on the short end of the stick getting very angry, maybe we head off hat in hand to the IMF ... except who's backing the IMF? China has its bubble, the EU is busy propping up the PIIGS ... might end up being we suck less than the others and hence the "winner."

[Anonymous]

Read up about France and the gold standard. Big mistake.