Why do so many people think gold is a good investment?

sheriff733 · 02-21-2013, 06:46

Here is Dave Ramsey's take on it, and I tend to agree with him.

" It sucks. Gold is a horrible investment. It's speculating in precious metals, and you're going to lose you butt when you play with gold. The deal with gold is really simple.

Gold has a 70-year track record of 4.2% returns. That's about the rate of inflation. It's awful. All the rate of return that gold has made has been in the last seven years, and even then it will go up and down and up and down. It's very volatile.

If there are any end-time conspiracy theorist nutburgers who think that gold is stable and will cover us if the economy collapses, I tell you that gold and money are spiritual. Gold is only as good to you as someone else is willing to take it as payment. There is no guarantee that someone will take it as payment.

When Hurricane Katrina hit New Orleans and that economy collapsed, the first thing that happens is commodities become valuable. Paper money isn't valuable and gold isn't valuable. A bottle of water, a tank of gas or a pair of blue jeans in that mess was a big deal, but a bar of gold wouldn't have gotten you anything. People are after survival in those situations. The idea that we return to the gold standard after a crash is bogus."

Some more info:

"Once again, investors are reacting to the uncertainty in the stock market by investing in gold. Since the third quarter of 2010, the price of gold has jumped 40%, peaking at just over $1,900 an ounce. The “experts” are touting gold as the only “safe” investment in a volatile market.

So is now the time to buy gold?

No way!

Think about it: Why would you buy something at its all-time high? From 1833 to 2001, the compound growth rate of gold was 1.54%. Since September 11, gold has made record returns, averaging close to 16% a year. The gains that gold has made in the last 10 years can't make up for nearly two centuries of poor performance. There's nowhere to go but down—and history supports that.

Many people invest in gold out of fear. Think about how the value of gold has gone up as uncertainty in world economies has increased. With the ever-changing values of world currencies, some people see gold as more stable. But that's just not the case.

Today, like most commodities, the price of gold is driven by supply and demand, as well as speculation. The ongoing high political drama over the nation’s debt and the media-driven spirit of fear have also encouraged this recent spike in gold prices.

When prices are driven to artificial lows or highs out of fear and greed, investors create a bubble. And bubbles will always burst. Investing is not buying something based on fear or greed. At best, investing in gold is speculation. And, at worst, it's gambling.

So investing in gold is a bad idea, but selling it is not! Now is a great time to capitalize on the inflated prices and sell your unused gold and silver. Open up your old jewelry box and pull out those pieces you will never wear again. Use that money for your emergency fund, dumping debt, or investing in a good mutual fund.

Gold Stash is a quality company that will gladly buy any of your unused gold and silver. They do business the right way, going above and beyond. Dave wouldn't endorse them if they did any less. With Gold Stash, you can take advantage of the high gold prices in a safe and responsible way.

So don't waste your time by trying to invest in gold. Instead, make a little money off your long-forgotten gold pieces and take another step toward Financial Peace."

Why do you think gold is a good idea, GT? Help me see why I should consider investing in it.

stolenphot0 · 02-21-2013, 06:57

I think black metal, copper, and lead are a good investment in times of uncertainty.

kirbinster · 02-21-2013, 07:01

Its simple, you should not. Gold is a store of value, and not an investment.

sheriff733 · 02-21-2013, 07:03

Quote:

Originally Posted by kirbinster

Its simple, you should not. Gold is a store of value, and not an investment.

Ok, good. I'm glad I'm not the only one.

W · 02-21-2013, 07:04

Quote:

Originally Posted by stolenphot0

I think black metal, copper, and lead are a good investment in times of uncertainty.

eracer · 02-21-2013, 07:06

You want precious metals for investment. Think platinum and palladium.

Silver is not bad either, since demand is rising, and most analysts say it's still undervalued.

mgs · 02-21-2013, 07:06

I pefer water, food, ammo and guns in that order.

sheriff733 · 02-21-2013, 07:07

Quote:

Originally Posted by mgs

I pefer water, food, ammo and guns in that order.

This.

This is the only thing that makes sense to me.

Spiffums · 02-21-2013, 07:20

What always got me with the PM survival hedge is how you gonna make change? What are you gonna do when the Indian who runs the local store says no that pre 65 dime is worth 10 cents not whatever spot was that day.

Sure it might be a good way to protect your over all wealth but your taking the gamble that it will bounce back after whatever WHAMMY hits us.

sheriff733 · 02-21-2013, 07:25

Quote:

Originally Posted by Spiffums

What always got me with the PM survival hedge is how you gonna make change? What are you gonna do when the Indian who runs the local store says no that pre 65 dime is worth 10 cents not whatever spot was that day.

Sure it might be a good way to protect your over all wealth but your taking the gamble that it will bounce back after whatever WHAMMY hits us.

Yes.

When hurricane Sandy slammed into the northeast, were people paying for goods and services with gold nuggets or bricks?

No.

SleeperSS · 02-21-2013, 07:48

Quote:

Originally Posted by sheriff733

Yes.

When hurricane Sandy slammed into the northeast, were people paying for goods and services with gold nuggets or bricks?

No.

Another Kool-Aid drinker....glad I'm not alone. I think people look at it as a get rich quick program...like Dave says...the tortoise wins the race every time...lol

***Gallium*** · 02-21-2013, 07:52

In all things, balance is necessary. Having $100,000 in the bank and not having a generator, or a case of water or a couple cords of wood (if you live in a house) is nuts.

Having a house full of MREs, guns, ammo, navigational tools, ATVs/etc and not having any currency is likewise foolish.

Until society completely disassociates, currency will always be valuable, and the need for projecting (or using) force will also be an asset. In my near 1/2 century on earth I have not seen anything resembling the "Thunderdome" or "Book of Eli".

I don't have any gold in my portfolio for SHTF. I have it on my finger and on my wife's finger to symbolize our union.

The only silver we have are a couple of bullets and arrowheads - you know, for the werewolfs.

Flying-Dutchman · 02-21-2013, 08:03

Quote:

Originally Posted by sheriff733

Here is Dave Ramsey's take on it, and I tend to agree with him.

" It sucks. Gold is a horrible investment. It's speculating in precious metals, and you're going to lose you butt when you play with gold. The deal with gold is really simple.

Dave Ramsey needs to conduct an intervention with Obama and Congress. The Ben Bernank can sit in too. If they would take his advice we would not need to worry about gold.

If gold is a silly way to store wealth, why did they go off the gold standard just a mere 42 years ago?

Why do central banks store it? Why does China, Russia...George Soros...John Paulson...buy it?

Remember, all fiat currencies like Fiat cars have a lifespan.

eb07 · 02-21-2013, 08:07

Gold was a great investment... for those who bought before 2005 and have been selling now. The people who bouight large amounts before 2005 are the ones who are now "gold experts" and running ads selling the sheep on how buying gold is such a great investment.... only one side in that deal is making the money.

I invested heavy in PM from 02-04. I Liquidated all of my mutual and retirement funds. I invested in gold and silver heavy. In 2010 I cashed in and I am now investing in real estate. That will go up in 10 or so years and I can cash in on that and find the next cheap thing to invest in.....

People buying PM now are crazy

M2 Carbine · 02-21-2013, 08:19

I've made money with Gold and Silver.
I've lost money with stocks.
I made the most money with land. (actually the best money was made through dumb ass luck because they finally found natural gas around here)

I have nothing to do with stocks anymore.

In my lifetime paper money has done nothing but become worth less and less and less.

If I NEED Gold and Silver I figure I'll need food, water, clothes, shelter, ammunition and guns a lot more.
Don't think someone is going to trade their food or ammo for a useless metal.
I may trade a sack of corn for a gallon of gas.

My guess is if the S does HTF city people will be shooting each other for a gallon of water inside three weeks. People won't be trading their stuff for useless Gold, Silver or worthless paper money.

If you don't have at least a years worth of ammo and food put up all the time, forget about stocking Gold or Silver, it won't do a thing for you.

.

sheriff733 · 02-21-2013, 10:38

bump.

Waiting on those who called me an idiot for this stance last time I brought it up to show up. I'm trying to see it from their point of view.

ChuteTheMall · 02-21-2013, 10:49

I notice that Dave Ramsey is endorsing a company which is buying gold, not one which is selling gold.

427 · 02-21-2013, 11:01

We've already seen an economic crash with argentina. Hyperinflation got them but they had the us dollar to fall back on. They also had gold. If/when hyperinflation happens and as the fed continues to print money and the dollar devalues, if not gold, what are the other alternatives for us?

sheriff733 · 02-21-2013, 11:05

Quote:

Originally Posted by ChuteTheMall

I notice that Dave Ramsey is endorsing a company which is buying gold, not one which is selling gold.

That's right. I'd sell some I had laying around, but sure wouldn't buy any.

scottz0369 · 02-21-2013, 11:11

I bought gold in the 90s when it was cheaper, now I'm selling it to finance durable goods.
I'm a Ramsey fan, I hadn't heard his take, but I agree with it. Now that gold is so high, I'd be reluctant to buy. One thing that strikes me is that there are soooooo many businesses that are now willing to trade their valuable gold for our soon to be worthless dollars. Sort of reminds me of the real-estate market a few years ago.....
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vart · 02-21-2013, 11:16

I'm investing heavily in gold; or, investing in the acquisition of it through panning and sluicing...

I've spent about $200 over the past year on sluices and tools and have found about $30 worth of gold doing very little prospecting. It's fun and gets me into the outdoors exercising.

That's about the only way I'm going to acquire any gold...

sheriff733 · 02-21-2013, 11:18

Quote:

Originally Posted by vart

I'm investing heavily in gold; or, investing in the acquisition of it through panning and sluicing...

I've spent about $200 over the past year on sluices and tools and have found about $30 worth of gold doing very little prospecting. It's fun and gets me into the outdoors exercising.

That's about the only way I'm going to acquire any gold...

Now that's thinking.

DevilDocsGlocks · 02-21-2013, 11:19

I invested in Brass, Lead, and Steel over the last few years.. My investement has doubled in worth...
.223, .40, .22, AR, KelTec, Glock, Walther...

OctoberRust · 02-21-2013, 11:19

Quote:

Originally Posted by sheriff733

bump.

Waiting on those who called me an idiot for this stance last time I brought it up to show up. I'm trying to see it from their point of view.

I see gold/silver as more for wealth preservation, than anything else. It's also good to not keep all your eggs in one basket. IE have some money in stocks, have some in the bank for liquidity, and have some in silver/gold sitting in your safe.

You and I both know, if SHTF in the way most on here make it to be, you and I both will be bending over and kissing our butts good bye anyways.

...Something tells me though, SHTF won't go the way most here fantasize it to go.

sheriff733 · 02-21-2013, 11:22

Quote:

Originally Posted by OctoberRust

I see gold/silver as more for wealth preservation, than anything else. It's also good to not keep all your eggs in one basket. IE have some money in stocks, have some in the bank for liquidity, and have some in silver/gold sitting in your safe.

You and I both know, if SHTF in the way most on here make it to be, you and I both will be bending over and kissing our butts good bye anyways.

...Something tells me though, SHTF won't go the way most here fantasize it to go.

I can agree with that. But some people seem to think "If I have gold, I'll be on easy street when a massive hurricane comes through." (Example scenario)

Yeah, there are some dreamers here for sure.