How does investing in gold work?

No one I know has had the majority of their portfolio in gold since 1965. This is a fantasy. Warren Buffet is consistently one of the richest men in the world and he has had the majority of his money in stocks for decades. Show us the Warren Buffet of gold and we'll talk. Otherwise please stop giving out inept "investment" advice.

 

did you know that in 2008 had the US government not bailed out the banks Warren Buffet and his Berkshire Hathaway would of gone bankrupt? He is not as smart as people credit him to be....my guess is he is rich more by luck than anything else!

A very littloe known fact is that Nutual of Omaha was "VERY CLOSE" to bankruptsy!

 

^^^^ and again for the 11th time I said......the 80's and the 90's was the era of paper assets........I wish you people would read my posts....this is so annoying trying to aducate the ignorant

 

Its called too big to fail. If you were dumb and shorted Berkshire Hathaway because you thought it was "bankrupt." You got hosed. Once again the Oracle made the right bet. That's why he is the best and you post gold advice on an internet forum.

 

being in the right circle of people makes you privaledged....not smart.....I guess you dont know the difference.......and your statement that I post on interent forums? your point is what?


I was smart enough to see the gold boom back in 2003......and I invested wisely......I really dont know what your problem is....sour grapes perhaps as all your money is in depreciating paper assets

 

I'll show you these charts again because I don't think you're reading them right. Dow increased from the early 1900s fairly steadily by more than 9,000 points. As of today's price Gold has only increased by just over 1,500 points and is quite spotty while doing so.

Gold is a terrible investment compared to the Dow average. Btw as for your comments about the value of the dollar no one said it was a good investment - it has one of the problems of gold in that it has no cash flow.

 

including the period from 1940 to 1965 makes no sence as at that time the dollar was still backed by gold...what part of that dont you understand? This is why I keep saying from 1965 to now....before that makes no sence as " THE DOLLAR WAS BACKED BY GOLD" so why include that period for...of course when you have sound money it better to be in paper assets....are you that clueless?

so I will say again.....EVER SINCE THE US WENT OFF THE GOLD STANDARD GOLD HAS OUTPERFORMED ALL PAPER ASSETS!

please dont be so clueless OK?

 

^^^^ you see....I see all the propaganda that is out there by the brain dead that obviously have no gold and dont understand gold. These are the guys that did not see the crisis coming in 2008 and most certainly dont see the currency crisis that is just around the corner!

You want to believe the propaganda...go ahead....I know better!

 

From 1965 until now gold has only climbed about 620% of it's value (using today's gold price). That's a terrible return. In the same period the Dow has increased from just under 1,000 points to about 10,000. It's not even close.

A dollars worth of gold bought in 1965 would be worth $620 today.
A dollars worth of Dow bought in 1965 would be worth $9,000 today.

 

Forgot to mention dividends. In addition to the above gain Dow dividends average 3 - 8% on average with highs as much as 15% so you'd make more just in dividends on your $1 Dow investment than you would in your $1 gold investment.

 

where the heck are you getting those bogus numbers from? In 1965 gold was still 35 dollars...if it only went up 600 percent as you suggest that would make gold worth only 200 LOL......please.....let me know where I can buy gold so cheap

gold is up 5300 % since 1965 and the DOW is up 1,000 % your math is way off LOL

 

We're talking inflation adjusted remember.

 

you also need to include taxes on those dividends and dividends are not much.....I would say from 3 to 5 % at best.....some pay even less like 1%

 

the DOW went from 1,000 to 12,000 thats 12 times

Gold went from 35 dollars to 1800.....53 times

 

You are using an inflation adjusted Dow number and an non-inflation adjusted gold number.

 

how is that possible? The DOW was 1,000 in 1965.....thats the ""ACTUAL" value...not inflation adjusted value.....same with gold.....in all fairness....neither is inflation adjusted!

 

If the Dow and gold are "currencies", the value is what the value is. Inflation only applies when a currency is exchanged for a commodity or service and the inflation rate of that commodity or service is significantly different from that of the Dow or gold. Dividends are a valid topic and need to be accounted for an a stock by stock basis.

I would be careful with regard to purchasing gold now. There are a lot of charlatans out there to steal your money. Stick to government purchases of gold coins directly from the government that manufactures the coin.

 

yup, gold maple leafs, american double eagles, krugerands, or british soverigns

 

Your time periods are irrelevant. Should we compare 2000 to 2011 and compare the Dow vs Gold?....

<crickets>

 

You're still comparing apples to oranges. Lets compare apples to apples.

Gold vs USD.

In 1913 a $20 gold eagle (1oz coin) could buy you a top of the line tailored suit.

In 2011 a $20 gold eagle (1oz coin) could still buy you a top of the line tailored suit (market value of $1900). Can the same be said for the same $20 USD?

Which is the better store of value? Gold or the dollar? Gold wins hands down. Your savings account should be in gold - not dollars. That is our argument.

Those who are recommending Gold as an "investment" today are saying that they speculate, due to the collapsing dollar, the value of Gold will go up at a higher rate than dollar based assets such as the Dow.

Gold is a hedge against inflation - and in certain periods of time can make you money via speculation (such as now). Gold is THE asset to own during high periods of inflation. One need only read When Money Dies to see the best collection of evidence to date.

 

The hustlers of gold make money at every turn. 1 ) they are bookies and make a percentage on every transaction.
2) should news spread of more financial panic they profit at every turn.
3) should you buy the actual metal there will be charges for documentation of value and a percentage as well.

GOLD GOLD GOLD...(*)(*)(*)(*) buy Silver I think.

 

it truly amazes me how little people understand gold and paper money!

 

Again NO ONE has bought and held the majority of their wealth in gold since 1965. This is a totally bogus argument. I can pick five stocks that if you bought in the 1980s or 90s could have massively out performed gold. Unfortunately if you didn't actually buy those stocks in the 80s or 90s the stupid theory is pointless.

You are like those people that sell those bogus trading "systems". They analyze a bunch of past data and then back fit a formula to match optimal returns. Next step the peddle their wonderful trading "system" that would have given you a "4000% return since 1965." Only problem is no one actually got that return and the stupid "system" won't predict anything in future markets. I've seen it a million and one times.

 

Really? During the ultra inflation of the late 1970s/early 80s if you had bought US treasuries when gold was trading at $800/oz you would have spent the next 30 years getting a nice safe 14% interest payment from the US government. Meanwhile your imbecilic gold bug friends would have seen their assets slashed by almost 75%.

 

I'm not. The two charts above compare the same time period using inflation-adjusted numbers for both gold and Dow.

And a Dow investment of $20 in 1913 would allow you to buy the whole tailor shop today.

No one is saying currency investments are a good idea.

The Dow is not a dollar based investment.

Look at the gold inflation-adjusted chart again. It's not a good hedge against inflation.