Should I Invest in Gold?

[Bullet1987]

I have to admit, I've always been interested in investing in something. I keep seeing these commercials from Merit Financial and other groups about investing in gold...so I thought I'd check it out. But I have to admit, I know very little about investing and since I know there are older people who post here...maybe someone can enlighten me about gold investments. Also, how do I know which group to go along with? And what advice do you give? Is investing in gold as smart as people say it is?

[wuushew]

1. No

the returns stink.

[Lost-in-FL]

2. No

I heard it is a very bad idea.

[firefox_fan]

3. Why don't you invest in ME? I have great potential!

Ahahahah!

[bemildred]

4. Sure, buy a bunch of it. Bury it in your back yard. nt

[youngdem]

5. Good rule of thumb. If someone has to ADVERTISE an investment, RUN.

If it were truly a good investment, smart money would find it.

Not generally considered a good investment, and the way that some of these houses sell investment in gold is TERRIBLE to say the least.

Invest in something you know is my advice. You are less likely to buy the hype.

[MrSlayer]

6. It would have been a good idea a few years ago.

But the price is high now.

[texastoast]

7. No

It debilitates the land and poisons everything with arsenic. There several mining superfund sites because of gold.

Invest now in renewable energy and its products.

[wuushew]

8. How old are you?

Find your risk level and invest in a sufficiently diversified portfolio.

[librechik]

9. not a good time. Gold has been sliding, but it's still high. at about $650.

I have heard a lot of talk about it going up again, but that doesn't seem to be happening. I had some that I sold last year on the day it hit $750, but it has been slowly deflating ever since. I bought it at $400, and it took three years to go that high and it was smoking the whole time, compared to history.
I'm convinced that it won't ever hit the highs true believers talk about, but it is pretty secure in a few ways. If you buy bullion, everybody recognizes and trusts it, and you can take your nest egg (or single coin) to the gold dealer and sell it at a world-recognized price and not get ripped off (can't say the same about Real estate or stocks) Also, traditionally Gold always keeps its value, so you are not likely to lose your investment (although you might not make a lot of money) Right now, I'm imagining that gold won't go back down as low as 250, which is what it was in the 80's. And I hope it doesn't go down below $400, cuz that would be bad for me , although if it does, buy as much of it as you can afford! It's a good investment for relatively poor people who keep their nest egg in a sock under the bed, not in a portfolio.

[Bullet1987]

10. I'm 20...but how can I keep track of the highs and lows?

[librechik]

11. theres' a good website called Kitco which has daily values and graphs

also good articles by experts on the role of gold and how to invest. Watch out, though, they all have an interest as gold investors to make it look a little better than it is. "Rich Dad's Guide to Investing" talks about gold, too--basically says just buy it if you can. I recommend all those Rich Dad books if you are just starting out trying to do investments.

Also, stop in at the STOCK MARKET thread at DU in the Latest News forum. There's a good group of posters there to ask an occasional question, they have the Gold values chart up daily, and their threads are quite informative.

[Sapere aude]

12. No, sell all you have and give to the poor to enter the gates of heaven!

With that the rich man turned away in sorrow. My wealth! my wealth! who will protect my wealth?

[BeHereNow]

13. Only as a way to preserve a PORTION of your assets.

If you have a little money on the side, in dollars-
investing in gold, silver or guitars (which I prefer)
is simply a way to put cash, which increases and decreases
in value into another form, if you follow me.
Gold and silver will always fluctuate in value- therefore, you must
be patient and not panic if the ounce you buy at $400.00 dollars
is suddenly worth $350.00- eventually it will increase again and
then you sell, if you are worried. The point is to preserve the value of the
original dollar you invested. I put around $7000 dollars in
silver a few years ago- those dollars have not only been
preserved as the dollar has dropped, they have actually
doubled. My gold investment has preserved the value of the
dollars I invested back then, but I am not counting on that as
a huge money maker, simply a way to preserve the value
of the dollars I invested at that point in time, which in fact have decreased
in value while the gold increased.
I don't think this is a particulary time to invest in gold
or silver, but do watch the Kitco charts and if it
goes down, why not- IF you have some money to spare?

A great vintage guitar, on the other hand, is a SURE
investment as far as turning the dollars you invest
into profit. They only get more valuable with time.

Gold and silver?
No way to be sure... since the powers that be
have been manipulating the market forever.

And know this, Bush signed part of the
Patriot Act 2 into law, while the world was watching
the "capture" of Saddam.
What part? The part that requires all metal dealers
and banks to report metal purchases and deposits
into security boxes.
Remember the gold conscription?
If you do buy metal- be sure you only
buy NON-currency coins and forms.

BHN

[roamer65]

14. Yes, but prudently.

Look at gold as simply another floating rate currency, the "Anti-dollar". Gold most often follows an inverse pattern to the US dollar. So, I think you have to ask yourself the question, "How confident am I in the US dollar right now?". The long term prospects for the US dollar are horrible right now, so I am diversifying into a modest percentage of gold in order to protect some of my wealth. M3 money supply is now growing at a 13+ percent/year pace. Last time we had that level of money supply growth was just before the 1974-75 inflationary recession. John Williams "Shadow Gov't Statistics" website is a good read.

http://www.shadowstats.com/cgi-bin/sgs?

If one looks at US bonds and the US stock market since 2001, you really also need to figure in the dollar devaluation over the same period. But, then the picture is definitely not as pretty.

[CK_John]

15. Before you give any scam artist you money, call the Federal Reserve Bank in your area.

There are 12 in the country, and request info for buying US gold coins. Here is link <http://www.federalreserve.gov/otherfrb.htm> pick out your area and usually at the bottom of the page they have a contact us link. Deal only with the fed bank. Anybody between you and the fed adds a commission.

That would get you some actual gold, but then how are you going to keep it safe. Big problem! Think New Orleans.

But since you asked, I assume your mind is already made up, or you have already been conned.

[roamer65]

16. ..or he can contact the US Mint.

http://www.usmint.gov

The US Mint manufactures and distributes American Eagle gold and silver bullion coins to specific dealers. I'm sure they can send him in the right direction as well.

[AlienGirl]

22. Keeping the gold safe...

I prefer keeping it within reach of my bed, along with some other, more priceless things.

Tucker

[trekbiker]

17. the most convenient way to buy gold is

thru the GLD ETF. each share is 1/10 ounce of gold held in a vault somewhere. I made some money on GLD but gold is too high for my tastes right now. With the dollar on a slide who knows? Right now I like commodity related natural resource companies, especially the high dividend Canadian income trusts. The commodities bull has a few years left in it. also utilities. just starting out? probably best to diversify into some index funds. Also spread your portfolio out over foriegn funds, china, latin america, europe, etc., to shield yourself from the dollar decline. But your 20, you can take some pretty good risks. Unfortunately you will probably learn the way most of us did, trial and error, big mistakes and small ones. Get taken by a few scams along the way, invest in the latest greatest thing, etc. Like me, I'm 48 and have cobbled together my third (small) fortune. this time I intend to hang on to it. In 25 years of investing I've made some pretty stupid moves. Like the time I borrowed my mom's life savings and lost it all on a genetically engineered tomato (paid her back every cent but it was years before I could tell her the true story). Or the time I took every dime I had, borrowed against my 401K and pulled all the equity out of my house and put it all down on a company that I was "sure" had the cure for cancer. that was one hell of a cash bonfire... I lost $300,000 in 4 months

figure out what your risk tolerance is, your comfort level and go for it. Some people are not comfortable with anything riskier than a CD. But they pay the price down the road. You're only 20. dollar cost average, pack away as much as you can, max a Roth every year, max your 401K if you have one, dont stress on the inevitable setbacks. The main thing is to get started and the younger your start the better. Compounding is a hell of a thing

[Buttercup McToots]

18. Read and Read

Go to Kitco...lots of info and a discussion board...
I think the $ is in real trouble...
I am in gold, silver and uranium stocks...doing pretty
well. But do your DD before doing anything.
Good Luck

[Bullet1987]

21. That's another thing...

you say you're in uranium stocks. How do I get into different stocks?

[Buttercup McToots]

31. Schwab

I have a Schwab accnt and I buy stocks...
As I said...start with Kitco and read up on
all stocks your interested in...
Good Luck

[AlienGirl]

19. How much, over how long?

I advocate buying small amounts of gold here and there when you have extra cash. By "small amounts" I mean things like 1/10-oz coins at $70 each every so often, when you have that kind of money to use for entertainment. This is more a hedge against things completely going in the shitter and a way to keep yourself from spending your excess money than an investment strategy though--you'll have to hold onto it quite a while to profit much.

If you aren't a catastrophist who is certain the 1930's are breathing down the back of your neck and who needs the psychological comfort of heavy metals, mutual funds and bonds make more sense as investments. If you are that kind of catastrophe-thinker, gold, a packed suitcase, and basic skills like gardening and sewing are good bets.

Tucker

[taught_me_patience]

20. Absolutely not

Gold does not move with any rhyme or reason. Transactional costs are also high, as you, in most cases, purchase the actual coin. My long term investment play is OIL. We are at peak oil folks. World supply will start declining and cost per barrel is only going to rise. COP, HAL, and RIG are good oil plays.

[Bullet1987]

23. To AlienGirl...

That's the type of person I am. I want to buy every now and then and save up over years. Plus, I'm getting a fat refund check from college this coming semester. Even though I won't blow it all on gold (obviously)...I do see myself buying a few cheap bullion coins (around the 70-200 price range).

COP, HAL, and RIG

How do you invest in those things? Like Oil (even though I can't stand our dependence on it)?

[AlienGirl]

26. I lost money on HAL...

[taught_me_patience]

27. It has been struggling recently

getting a lot of bad press (heck... even I have a picture of myself urinating on a "Halliburton Headquarters" sign in Houston). But they are so cheap relative to other oil drillers. My cost basis is $30, so I've made a good 15%. I'm thinking about doubling down.

[taught_me_patience]

28. These are stock ticker symbols

COP = Conoco Phillips
HAL = Halliburton
RIG = Transocean
USO = Oil price ETF (it is not very good and don't recommend it)

You buy through a brokerage (I highly recommend scottrade).
YOU MUST DO YOUR OWN DUE DILIGENCE!!! Do not take recommendations from a message board.

[skids]

24. If you want to invest in commodities, which is what gold is...

...without turning your basement into a mini trading war room, you might be best off looking for a managed fund that runs a "basket" like a "commodity linked note" to get the same effect that "gold bugs" rave about.

Never throw all your money anywhere -- commodities have their problems too -- they stand up pretty well to simultaneous inflation and stock panics, but they will crash if the amount of total trade crashes (a real "economic downturn") and also the IRS has been causing those funds some grief with rule changes lately.

If the global market of silver wasn't being horribly manipulated, I might suggest that as an alternative because silver is actually used by industry (and effectively destroyed) so it is hard for there to be too much of a supply glut.

(Don't take my word for it I don't invest, I just read a bit about it. Personally I'm just trying to keep my money
relatively mitigated from inflation by keeping it in CDs as I wait for real estate's collapse to unfold, then "buy low" and hope I manage to hit at or near the bottom. Don't know whether I'll actually buy a house, or just interest in some real estate related fund. In any case I'm cash heavy so if the dollar really crashes I lose out. Not too comfortable with that, but not everyone can afford the time to move money around as much as they probably should.)

[Jed Dilligan]

25. I would buy rare coins instead,

because they are cool and always hold their value.

[BrightKnight]

29. no - n/t

[roamer65]

30. Here's a BIG WARNING that I should add.

DO NOT BUY pre-1933 US gold coins unless they are in the plastic holders (or "slabs") of the 4 major coin grading services. These services are PCGS, NGC, ICG or ANACS and they authenticate the coins when they grade them. Old US gold coins are widely counterfeited and I have held a couple in my hand. You have to be a professional to tell the difference on a lot of them and the ones I've seen are quite good. Don't get taken.