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    Default Gold as a retirement vehicle

    After lots of thinking, I think this is my best option. I can cash out a little whenever I need it.
    It will continue to appreciate in value.
    It's really low risk.
    It's very liquid.
    And since I don't plan on waiting til I'm 65 to retire, no early withdrawal penalties.

    It seems like a wise choice for me. The only problem: Where on earth do I buy the stuff? And are bars better than coins or vice versa?

    I've seen it talked about a little bit here in DD - can anyone help me out?

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    WWW Re: Gold as a retirement vehicle

    Quote Originally Posted by cherry_sin View Post
    After lots of thinking, I think this is my best option. I can cash out a little whenever I need it.
    It will continue to appreciate in value.
    Past performance cannot predict future performance, but this chart would seem to say that continual appreciation in gold prices is not likely. In fact, this chart makes a compelling case that we are at or near a historical peak in gold prices. http://www.gold.org/value/stats/stat...rices1900.html

    It's really low risk.
    As compared to Albainian retirement schemes? Gold is not backed by any income producing asset. It's value rests solely on turmoil in other markets.

    It's very liquid.
    You can go where and sell it quickly?

    And since I don't plan on waiting til I'm 65 to retire, no early withdrawal penalties.
    As long as you don't by an asset with a tax advantaged retirement plan there are no penalties for early withdrawl. If you buy gold with your IRA, there is a penalty for early withdrawl.

    It seems like a wise choice for me. The only problem: Where on earth do I buy the stuff? And are bars better than coins or vice versa?
    I thought you said it was "very liquid". Or were you referring to its melting point?

    I've seen it talked about a little bit here in DD - can anyone help me out?
    You buy an asset for one of two reasons, income or capital gains. Gold produces no income so it has to justify its presence in your portfolio because of expected capital gains. To date, gold has not done that. A better investment strategy combines income producing assets and assets that have the potential for producing capital gains. You don't say what your age is, but the younger you are, the more weight you should give to assets that produce more capital gains.

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    Default Re: Gold as a retirement vehicle

    hmmm.. i never thought about buying gold, unfortunately i don't know where to buy it, but i bet if you google it... it will appear with results in 0.68 seconds

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    Default Re: Gold as a retirement vehicle

    Zofia,

    Sounds like I've been misinformed. Bad HR Block! Hmph.

    Thanks for the help.

    I did google, but it was mostly junk and online stuff.

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    Default Re: Gold as a retirement vehicle

    I would've thought that with the question you posed, you would have already had a retirement stash of gold. Your kinda buying in high even if it does go higher...

    My dad joked with me earlier today when I was planning my spring break trip to Colombia... he said I can get this little $700 gold detector kit that has a metal detector and a scale and volume scanner that will give accurate measurement to the purity of gold pieces (jewellery, etc..).. anyways, he said that if I can find gold jewellery while there I might be able to buy a large sum of it off the street markets there and pay pennies on the dollar, so-to-speak... He said I can easily make it a profitable trip. I'm gonna look into this further.
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    Default Re: Gold as a retirement vehicle

    Gold is a preserver of wealth. It will not get you any richer.

    Look at what goods an ounce of gold would have bought you 100 years ago. Compare that to what an ounce of gold would buy you today...roughly the same.

    Look at the price of gold in the 80s, then the 90s, now today. If you bought gold in the 80s you'd finally be breaking even.
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    Default Re: Gold as a retirement vehicle

    Quote Originally Posted by britneyireland View Post
    Gold is a preserver of wealth. It will not get you any richer.

    Look at what goods an ounce of gold would have bought you 100 years ago. Compare that to what an ounce of gold would buy you today...roughly the same.

    Look at the price of gold in the 80s, then the 90s, now today. If you bought gold in the 80s you'd finally be breaking even.
    That's exactly the argument against Gold.

    Look at what 1 Share of Coco-Cola (A cash producing asset) would have bought 100 years ago (A Week's worth of groceries) and look at what the same share of Coco-Cola would have bought you now (Probably a mansion)

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    Default Re: Gold as a retirement vehicle

    100 years ago, an ounce of gold would have bought 20 dollars of stuff in dollar-value at the time.

    since the dollar is worth practically nothing compared to then, the real value of those 20 dollars is more than the 45x an ounce of gold is currently selling for.

    gold isn't really comparable to 'cash-producing' assets, but neither is it the same as diamonds (which are basically only valuable because debeers established an early and VERY powerful monopoly to control the price). it's kinda its own weird little situation.

    which should also be kept in mind when looking to invest in it for any reason.

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    Default Re: Gold as a retirement vehicle

    Quote Originally Posted by likewow View Post
    I buy gold and silver as a hedge against inflation and to keep a stash in case of national or global economic meltdown.
    It is a nice idea, but is it really practical?

    Do you really think that having $2000 to $3000 worth of Gold will save you from global economic meltdown?

    It is almost saying that you are going to survive a nuclear holocaust (if it happens) by stashing away 6 boxes of Kelloggs in your basement.

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    Default Re: Gold as a retirement vehicle

    Look at what 1 Share of Coco-Cola (A cash producing asset) would have bought 100 years ago (A Week's worth of groceries) and look at what the same share of Coco-Cola would have bought you now (Probably a mansion)
    you can make the same argument for one share of Studebaker, one share of Zilog etc. The fact is that conditions change, and intelligent people shift their investments to compensate for that change. This applies to gold as well as to shares of stock in particular companies.


    In my book, gold is one of the few investments that does not involve a future promise to repay, as stocks and bonds and CD's do. This can be a very important property during difficult times.


    Historically, if you compare the value of gold to something tangible, one ounce of gold has always been worth the cost of a good men's suit ! It is a 'preserver' of wealth not a builder of wealth though - again a property that comes in handy during difficult times.

    Gold is a lot more 'liquid' than a CDO or hedge fund shares or real estate right now !


    One 'easy' online gold source is . However, in exchange for the 'easy' comes a bit of price premium.

    One of the lowest cost sources of gold I know of is . However, in exchange for the 'rock bottom' pricing comes a bit of hassle in regard to the purchase.


    In general, I buy and sell 1oz gold bars as opposed to coins, because coins involve an additional numismatic 'mark-up' that you cannot recover during a quick sale.


    I also agree that gold is probably due for a significant price pullback in the very near future ... due to speculators being forced to raise 'cash' to cover other 'bad bets', and due to central bank gold sales intended to raise 'cash' to cover the 'bad bets' of major banks etc! Thus you may be buying in at a price peak if you do so at this particular moment.

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    Default Re: Gold as a retirement vehicle

    If you feel you have to go gold, look into "bullion coins" with no appreciable collector value, like the Krugerrand. I've been told that any gold" object shaped like a simple bar, needs to undergo assaying tests to prove it is all gold. But my info may be out of date. Oh, remember a troy ounce is 12 to the pound; troy ounces or grams (or kg) is how gold is weighed.

    Any moment of big international uncertainty or srtife ups the price of gold; basically it isn't stable. It has to be stored safely and transported at a cost, and it pays no dividends. I suppose it is possible to find a dealer who guarantees to store your 'commodity' and who will buy it back without assay costs, but all that convenience will cost you too.

    However, gold is pretty.
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    Default Re: Gold as a retirement vehicle

    ^^^ actually, 1 oz gold bars that are 'factory sealed' in the original thick plastic wrapper do not need to be reassayed.

    Also, every gold 'coin' is potentially subject to the imposition of capital controls by the gov't ... which happened in 1933 in the USA and which could happen again. Gold bars are legally treated as a 'commodity' not a 'currency' - and are theoretically exempt from future capital controls.

    I would also add a personal comment that the major value of owning physical gold bars is having them in your hand ( home safe ) when armageddon arrives. If the major interest is to speculate on the commodity itself, then there are far better options i.e. gold ETF's, depository accounts ( available from Kitco and many others ) , stock shares in gold mining companies etc. However, like regular stocks and bonds and bank accounts, cashing in any of the gold ETF's / depository accounts / gold miner shares will still require an 'intact' financial system infrastructure.

    On the other hand, any pawn shop will gladly buy a gold bar in a pinch ! Car dealers and realtors will accept them as 'deposits'. You can even use them to post bail !

    and yes they look pretty !

    ~
    Last edited by Melonie; 02-11-2008 at 12:32 AM.

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    Default Re: Gold as a retirement vehicle

    excellent hedging strategy (keyword: hedge)
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    Default Re: Gold as a retirement vehicle

    Quote Originally Posted by XxAmber89xX View Post
    My dad joked with me earlier today when I was planning my spring break trip to Colombia... he said I can get this little $700 gold detector kit that has a metal detector and a scale and volume scanner that will give accurate measurement to the purity of gold pieces (jewellery, etc..).. anyways, he said that if I can find gold jewellery while there I might be able to buy a large sum of it off the street markets there and pay pennies on the dollar, so-to-speak... He said I can easily make it a profitable trip. I'm gonna look into this further.
    I'd be interested in hearing what you learn about this.

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    Default Re: Gold as a retirement vehicle

    Wow, so much info! I guess I'll look for other ways to retire. I'm not the type to play the stock market, so it looks like CD's or bonds.

    Thanks you guys so much!

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    Default Re: Gold as a retirement vehicle

    Thanks for updating me on how it is now packaged, Mel. In 1933 the US govt was on the gold standard (gold backed the dollar) and in the worst world-wide depression ever; I would doubt that the US would be able to (or have a need) control any gold 'currency' other than those fake "coins" the US mint (and others) currently sells to collectors, especially foreign coins. Gold always gets public attention when the price goes up, and people ignore it when the price is down. Also good luck keeping your 'safe' safe.
    I loved going to strip clubs; I actually made some friends there. Now things are different for the clubs and for me. As a result I am not as happy.

    Customers are not entitled to grope, disrespect, or rob strippers. This is their job, not their hobby, and they all need income. Clubs are not just some erotic show for guys to view while drinking.

    NOTE: anything I post here, outside of a direct quote, is my opinion only, which I am entitled to. Take it for what you estimate it is worth.

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    Default Re: Gold as a retirement vehicle

    Quote Originally Posted by cherry_sin View Post
    Wow, so much info! I guess I'll look for other ways to retire. I'm not the type to play the stock market, so it looks like CD's or bonds.

    Thanks you guys so much!
    You don't have to 'play' the stock market. Just buying S&P500 Index with dividends reinvested beats most of the investment asset classes and trading strategies over a long period

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    Default Re: Gold as a retirement vehicle

    Quote Originally Posted by Melonie View Post
    ^^^ actually, 1 oz gold bars that are 'factory sealed' in the original thick plastic wrapper do not need to be reassayed.

    Also, every gold 'coin' is potentially subject to the imposition of capital controls by the gov't ... which happened in 1933 in the USA and which could happen again. Gold bars are legally treated as a 'commodity' not a 'currency' - and are theoretically exempt from future capital controls.

    I would also add a personal comment that the major value of owning physical gold bars is having them in your hand ( home safe ) when armageddon arrives. If the major interest is to speculate on the commodity itself, then there are far better options i.e. gold ETF's, depository accounts ( available from Kitco and many others ) , stock shares in gold mining companies etc. However, like regular stocks and bonds and bank accounts, cashing in any of the gold ETF's / depository accounts / gold miner shares will still require an 'intact' financial system infrastructure.

    On the other hand, any pawn shop will gladly buy a gold bar in a pinch ! Car dealers and realtors will accept them as 'deposits'. You can even use them to post bail !

    and yes they look pretty !

    ~
    If armageddon arrives,
    i) If you hold Gold in paper, it is usually worthless
    ii) If you hold in Bullions, you can't go to Walmart and scrape Bullions at the cashier to pay
    iii) If you go to a pawn shop, they'll pay you in 'dollars' not groceries or other assets
    iv) You'll get looted of your gold anyway
    v) Else, the govt. will seize all your gold or tax them at 99%
    vi) If your family, relatives and friends are suffering from hunger, you'll suffer the guilt of surviving alone.

    Having said that it may be worthwhile to hold Precious Metals/Commodities in your portfolio (not more than 2% of your net-worth). However, it will never going to save you during global meltdown or armageddon.

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    Default Re: Gold as a retirement vehicle

    Britney nailed the true point of owning gold ... it is a hedge against financial / political turmoil. When financial / political turmoil levels are rising, so does the price of gold. When financial / political turmoil levels are improving, the price of gold usually drops. So from that point I have to agree with Xan that investing more than a small percentage of your investment portfolio in gold / silver for the 'long haul' probably isn't the most promising investment. However, there ARE times when it makes a great deal of sense to greatly increase the percentage of gold / silver holdings (like the last several years !)

    Unlike Xan and many others I do not completely agree with the 'diversification' theory. I would sooner rotate sectors to seek cyclical winners rather than riding a broad average that is guaranteed to include a lot of losers along with the winners.

    And as far as worrying about looting my personal gold bars, anybody who has the balls to try had better bring a bullet-proof vest , and I'll still shoot the bastard in both feet !!! Of course that scenario doesn't work nearly as well if you live in an urban apartment versus a house in the 'country' located right next to the town judge LOL !

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    Default Re: Gold as a retirement vehicle

    Quote Originally Posted by Melonie View Post
    Unlike Xan and many others I do not completely agree with the 'diversification' theory. I would sooner rotate sectors to seek cyclical winners rather than riding a broad average that is guaranteed to include a lot of losers along with the winners.
    Except nobody can predict who the winners and losers are going to be. You are essentially playing lottery and you waste money on transaction costs, resources on studying useless macro-economic factors, and sleep on timing the market

    Bottomline, if you think a sector is cyclical the market would have already priced it and you earn market returns on those assets.

    If you are doing Value Investing like Amber, then it is a different matter.

    Note: Value Investors like Warren Buffett never believe in cyclicals, macro economic factors and other bull-shit which nobody can correctly use to predict prices

    Here's an open question to you.
    If you believe in cyclicals, which stocks do you think will underperform and which will overperform in the next two years?

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    Default Re: Gold as a retirement vehicle

    underperform ... non 'monopoly' US software makers, midscale US retailers - also investment banks have a long way to fall before getting close to a bottom

    overperform ... natural gas or coal producers (depending on election results - democrats = gas, republicans = coal) - Also, the US automakers may have finally bottomed out

    Your point about cyclical markets having already priced in good or bad news is only valid to the degree which the financial news media 'admits' that problems are brewing or fundamentals are improving. Yes the 'smart' money is ahead of the curve on this ... but Wall St trends are also heavily driven by Joe Sixpack 401k's and foreign investor sentiment these days.


    As to your claims about the S&P being the best bet in the long haul, that depends on your definition of 'long' I suppose. YTD, you now have a negative 8% 'hole' to climb out of. Over the past 3 months or 6 months you now have a 15% 'hole' to climb out of. Is this a good point to buy back in ... maybe, or maybe there's another 8% decline waiting in the wings next month.

    ~
    Last edited by Melonie; 02-12-2008 at 05:20 AM.

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    Default Re: Gold as a retirement vehicle

    I was going to avoid posting in this thread because most of you must know my opinions on metals by now. However...

    Asset allocators recommend that gold / hard assets should make up between 5 and 10 percent of a portfolio. However, that should then be further split between bullion, coins with numismatic value (different investment properties to bullion) and mining shares. This means that holding gold and / or silver can be a pretty tricky thing to do for an average person. There is significant specialised knowledge in doing this.

    As an idea for 'a retirement fund', I would suggest that this is incredibly high risk.

    However, there are further things I'd like to point out...

    Quote Originally Posted by xanfiles1 View Post
    If armageddon arrives,
    i) If you hold Gold in paper, it is usually worthless
    ii) If you hold in Bullions, you can't go to Walmart and scrape Bullions at the cashier to pay
    iii) If you go to a pawn shop, they'll pay you in 'dollars' not groceries or other assets
    iv) You'll get looted of your gold anyway
    v) Else, the govt. will seize all your gold or tax them at 99%
    vi) If your family, relatives and friends are suffering from hunger, you'll suffer the guilt of surviving alone.

    Having said that it may be worthwhile to hold Precious Metals/Commodities in your portfolio (not more than 2% of your net-worth). However, it will never going to save you during global meltdown or armageddon.
    I would respectfully suggest xan that you re-think your opinions. If the world turns to crap, the main means of obtaining the basics will be theft, force and barter. Silver coins or bullion would be almost perfect for this. As would cigarettes, alcohol and foodstuffs.

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    Default Re: Gold as a retirement vehicle

    Quote Originally Posted by xanfiles1 View Post
    Except nobody can predict who the winners and losers are going to be. You are essentially playing lottery and you waste money on transaction costs, resources on studying useless macro-economic factors, and sleep on timing the market

    Bottomline, if you think a sector is cyclical the market would have already priced it and you earn market returns on those assets.

    If you are doing Value Investing like Amber, then it is a different matter.

    Note: Value Investors like Warren Buffett never believe in cyclicals, macro economic factors and other bull-shit which nobody can correctly use to predict prices
    Sorry to seem like I'm picking on you, but there is sooooo much wrong with this that it isn't true! You contradict yourself terribly.

    On the one hand, you say that nobody can pick winners and losers, but then cite Warren Buffett - the ultimate picker of winners - as your example. You also equate this to playing the lottery. That would make Warren Buffett the world's luckiest lottery winner. I appreciate that you are trying to relate this to cycles rather than stocks, but still...

    If you scroll back up and look at Amber's post, she is going abroad and hoping to find bargains in another country. This isn't value investing. This is known as arbitrage. Similar idea, but not the same.

    Further up in this thread, you suggest that buying the S&P 500 works. Great. You are an index investor. Good for you. But here your argument is that value investing is the way to go. Great too. But is the plan just to pick and win fights by moving the goalposts? How can you argue that you have the correct opinion when you can't even decide on what those opinions are?

    Even in the post I quote here, you suggest that picking winners isn't possible and then that value investing is the way to go. Value investing as a theory is built entirely on an ability to select companies that display certain characteristics which provide above average chances of profitability because assets are underpriced.

    I realise that you are very theoretical in all this, but I think you need to understand the theories a little better before your next diatribe.

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    Default Re: Gold as a retirement vehicle

    Quote Originally Posted by StuartL View Post
    Sorry to seem like I'm picking on you, but there is sooooo much wrong with this that it isn't true! You contradict yourself terribly.

    On the one hand, you say that nobody can pick winners and losers, but then cite Warren Buffett - the ultimate picker of winners - as your example. You also equate this to playing the lottery. That would make Warren Buffett the world's luckiest lottery winner. I appreciate that you are trying to relate this to cycles rather than stocks, but still...

    If you scroll back up and look at Amber's post, she is going abroad and hoping to find bargains in another country. This isn't value investing. This is known as arbitrage. Similar idea, but not the same.

    Further up in this thread, you suggest that buying the S&P 500 works. Great. You are an index investor. Good for you. But here your argument is that value investing is the way to go. Great too. But is the plan just to pick and win fights by moving the goalposts? How can you argue that you have the correct opinion when you can't even decide on what those opinions are?

    Even in the post I quote here, you suggest that picking winners isn't possible and then that value investing is the way to go. Value investing as a theory is built entirely on an ability to select companies that display certain characteristics which provide above average chances of profitability because assets are underpriced.

    I realise that you are very theoretical in all this, but I think you need to understand the theories a little better before your next diatribe.
    There is no contradiction

    If you have no time, energy and resources or have a hard time understanding balance sheets, Income statements, basic probability and some intuition about management(99% of the World Population). S&P 500 Indexing is the way to go. If you havn't started investing that is the simplest way to accumulate your egg nest

    Once you have put the above plan in place, then you start mixing it up, 80% of World 1000, 20% of World Bonds. Then you can go a little crazy and mix up some REITS and Metals/Commodities

    After observing the market for some time and really see how Stock market is irrational and you can confidently 'value' a company, you start value investing. Less than 1% of the population can successfully Value Invest. It takes hard work, smartness and discipline.

    What Melonie is suggesting is Momentum investing (proven not to work) and no way near Value Investing. She isn't reading Balance Sheets, but having a view. Unless she is the only person in this world who has that view and she is confident about that view (possible only through inside information), she can profit. else she can't beat the market

    Arbitrage is making money by investing $0. What Amber is doing is not Arbitrage but still Value play.

    In Summary,
    - Don't Waste your time following Macroeconomics, Technical Investing, or any Price based strategy. Put all your money in an Index
    - If you have the patience to read Annual reports, Understand basic Probability and can do research on a company, Value Investing may work for you. But again, you start small

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    Default Re: Gold as a retirement vehicle

    Quote Originally Posted by xanfiles1 View Post
    If armageddon arrives,
    i) If you hold Gold in paper, it is usually worthless
    ii) If you hold in Bullions, you can't go to Walmart and scrape Bullions at the cashier to pay
    iii) If you go to a pawn shop, they'll pay you in 'dollars' not groceries or other assets
    iv) You'll get looted of your gold anyway
    v) Else, the govt. will seize all your gold or tax them at 99%
    vi) If your family, relatives and friends are suffering from hunger, you'll suffer the guilt of surviving alone.

    Having said that it may be worthwhile to hold Precious Metals/Commodities in your portfolio (not more than 2% of your net-worth). However, it will never going to save you during global meltdown or armageddon.
    Agreed 100%. The best things to have in case of a meltdown would be guns, iodine, de-salinators, several years stash of those army food kits, medical supplies, etc....

    If the meltdown is nuclear, the best thing you can have in addition to the above is a whole lot of faith that you won't be subject to fallout.

    Few of us here are survivalists. Most of us would perish. I'm not going to live my life thinking like that. Gold may or may not have any barter value in a meltdown until society re-establishes itself primitively and determines that gold will have value. Then again, they may just use acorns and coconuts.

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
    "And do the cats give a shit? No, they do not. Why? Because they're cats."-from The Onion

    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

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