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Pep talk: don't sell your PM now


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They are ALL about passive index funds and chasing the stock market. They worship VTSAX. If you are lucky you might find someone holding 20%

I hang out on reddit investing way too much. I can confirm. Sometimes it pays to be the contrarian. That being said my net worth is more in silver than it is in gold however the recent rise has made me realise that my gold allocation is way too small so I'm buying purely on the basis of diversifying more and increasing my allocation percentage.

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This poses an interesting question for someone like me, I have just started investing in silver and gold, and find myself questioning whether to buy more now, or drip feed the bit of money I have to invest in PMs. Thoughts on this?

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I have seen so many rises in value of various investments, followed by crashes and total wipe outs.
Once I bought shares for about £20k, saw them rise twenty-fold and drop to half what I originally paid even though the Company was rock solid.
I have just sold most of my gold because the current price is relatively high.
Maybe that will prove to be a mistake but I didn't sell my shares when I should have, because I was convinced they were going to rise even further.
No-one on the planet can forecast commodity prices and guarantee PMs as a safe investment - this is classed as high risk for a reason.

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15 minutes ago, Pete said:

I have seen so many rises in value of various investments, followed by crashes and total wipe outs.
Once I bought shares for about £20k, saw them rise twenty-fold and drop to half what I originally paid even though the Company was rock solid.
I have just sold most of my gold because the current price is relatively high.
Maybe that will prove to be a mistake but I didn't sell my shares when I should have, because I was convinced they were going to rise even further.
No-one on the planet can forecast commodity prices and guarantee PMs as a safe investment - this is classed as high risk for a reason.

Actually, gold is low risk... the opposite. That's why during times of turmoil and uncertainty, investors pile into gold... it's a "safe haven". Gold is similar to cash, but not dependent on volatile exchange rates.

There was another guy who was scared of gold, In December last year I think, and he sold all his gold... ouch. 

Of course nobody has a crystal ball, and you may end up being right. Time will tell.

Edited by goldmember44
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I believe at this moment in time a drip feed investment into PMs is probably a wise move. For me i see it more as a hedge against inflation, only really seeing it as a means to best safeguard against buying power loss with capital stuck in the bank. If i had enough funds i would split my PM investment between longterm inflation hedge, and the part would strictly be to buy and sell as i thought fit it regards to peaks and trofs of normal market movements... But as Pete said, at the end of the day it is a high risk investment

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7 minutes ago, goldmember44 said:

Actually, gold is low risk... the opposite. That's why during times of turmoil and uncertainty, investors pile into gold... it's a "safe haven". Gold is similar to cash, but not dependent on volatile exchange rates.

There was another guy who was scared of gold, In December last year I think, and he sold all his gold... ouch. 

Of course nobody has a crystal ball, and you may end up being right. Time will tell.

We amateur muggles may have different views but Martin Feldstein, a professor of economics at Harvard, was chairman of President Ronald Reagan`s Council of Economic Advisors and president of the National Bureau for Economic Research states - "Gold is a high-risk and highly volatile investment. Unlike common stock, bonds, and real estate, the value of gold does not reflect underlying earnings. Gold is a purely speculative investment. There is no way to know which it will be. Caveat emptor."

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1 minute ago, Pete said:

We amateur muggles may have different views but Martin Feldstein, a professor of economics at Harvard, was chairman of President Ronald Reagan`s Council of Economic Advisors and president of the National Bureau for Economic Research states - "Gold is a high-risk and highly volatile investment. Unlike common stock, bonds, and real estate, the value of gold does not reflect underlying earnings. Gold is a purely speculative investment. There is no way to know which it will be. Caveat emptor."

You will always get gold bulls and bears, and people with negative views on gold. However gold is definitely not as volatile as the stock market, and because it's a store of value it will always retain value -- it has for thousands of years, for much longer than stocks or fiat currencies even existed. Gold is seen as at the same level of risk as cash, as per the latest Basel rules, Tier 1 in capital adequacy. There's a reason why the biggest chunks of money in the world are aggressively moving into gold (central banks) -- because it's a safe haven, an insurance against risk of wars, economic troubles, etc.

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1 hour ago, Groundup said:

Not when you earn minimum wage.😭😭

MORE so THEN! my friend - although I fully appreciate its harder to get together the funds for purchases - - BUT BUY even its only small amounts 

If you do you -- you will be "miles" in front of those who dont even have ANY

and they (those without) will propel YOU forward if not in FIAT numbers but "IN YOUR PURCHASING POWER

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1 hour ago, Groundup said:

Not when you earn minimum wage.😭😭

There's always light at the end of the tunnel. 

Im in the same boat, but there is money to be made out there. Get the fractionals of gold. 

 

Thanks @vand for the motivation and reassurance.

  

 

 

 

 

 

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1 hour ago, BDShome said:

This poses an interesting question for someone like me, I have just started investing in silver and gold, and find myself questioning whether to buy more now, or drip feed the bit of money I have to invest in PMs. Thoughts on this?

Here's some of my cruddy mathematics that may / or may not help! sorry its a bit algebraic!!I

If  you have X amount to invest  - and you place 1/3 in at Y price NOW,  you will have 1/3X @Y price  - 

the price rises 10% - you have gained whatever 1/3X  equals plus 10% of that figure  - Easy to see I know

But Now you put another 1/3 "fiat" in  - you have 2X amount of holding with 1/5 (sorry 5% spread across 2X investment)  growth/profit/gain  - you have 2x amount INvested but with resilience to bail if you see info saying its coming back

You can at least "BAIL" if worried at No loss or Gain but "CAPITAL PROTECTED!"

If it goes onward more, you are now doubling original RATE of the RoCI (Return on Capital invested) but as you are already 5% plus  up - this will be at an increasing rate of growth

its "kinda " like having a "trailing stop" in place to give a little bit of built in resilience to your investment 

at a further 10% increase you can - if desired, add final 1/3 of total "originally" committed (allocated) and follow same rules with even more resilience going forward

Hope this kinda explains "MY TAKE" on chasing safely a rising market of volatility

ONLY my thoughts NOT ADVICE!! May help or Not with thinking HOW TO! 

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There can be no doubt that gold is due a serious uplift at some point. The problem is knowing when that will be.

The recent rise could be the start of that major bull market or it could be a minor side show, soon to return to it's previous range bound existence.

It is sufficiently different to it's recent years' behaviour to suggest that selling now is certainly a risk.

The major problem for me is that gold is expensive in GBP terms and will fall relatively when sterling recovers.

Myself, I'm a hold but would hesitate to recommend buying more in GBP, at the moment.

Profile picture with thanks to Carl Vernon

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Gold is a defensive play (protection) against currency devaluation and a lack of confidence in governments. In reality, things relative to gold rise or fall. When “a thing” falls, the value (rather than the price) of gold relative to that thing rises, but most people only focus on the number attached to gold in their own currency as an indicator, and naturally so.

Edited by Oldun
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https://www.youtube.com/watch?v=iYuWlcLxCuE

GoldSilver (w/ Mike Maloney) Premiered Aug 8, 2019
 
Some scanned in documents when Mike bought Gold eagles $326 oz and then later on at $396 upset at the time when bought at $396 because it was close to the high price had to wait seven months before spot went back to that level and broke through it.
 
IMHO I believe Gold on a long term uptrend and saving in Gold for the next couple decades will be the right financial decision. Going to be many volatile moves in the price Gold and don't need the funds best to purchase and forget. All my physical Gold bullion safety deposit box out of sight out of mind safe and secure. I am not selling but by the same token not buying just sitting on the sideline waiting for opportunity to buy more.
Edited by Abyss
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13 hours ago, goldmember44 said:

You will always get gold bulls and bears, and people with negative views on gold. However gold is definitely not as volatile as the stock market, and because it's a store of value it will always retain value -- it has for thousands of years, for much longer than stocks or fiat currencies even existed. Gold is seen as at the same level of risk as cash, as per the latest Basel rules, Tier 1 in capital adequacy. There's a reason why the biggest chunks of money in the world are aggressively moving into gold (central banks) -- because it's a safe haven, an insurance against risk of wars, economic troubles, etc.

 

While I am a fan of PMs, I am also scrupulously fair to other investments, and what you say is not entirely accurate. Gold tends to be more volatile than stocks, which tend to be more volatile than bonds.

Yes, gold is proven very long term store of value, but its shorter term cycle swings can be wild.

That is why in most asset allocation plans they allocate quite a small chunk to gold and much larger quantities to bonds. It is because of the inherent volatility of these assets classes.

 

While I think PMs are well positioned to deliver strong gains, it will be a wild ride with plenty of corrections, and you should not hold more than your risk tolerance allows. This is true of any asset. Humans are emotional creatures; losses hurt more than gains make you feel good, meaning that most people are best served with a balanced and well diversified portfolio that smooths out the ride while still capturing much of the upside.

 

Edited by vand
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i fully expect a return to some sort of gold backed currency system. We can see it in Asia. Governments buying gold at unprecidented levels as they move away from the USD. i hear plenty of rumours about the Chinese and Russians backing their currencies and State cryptocurrencies. i am involved in Kinesis which Indonesia is fully onboard with and is making it 'obligatory' to save in Kinesis and so save in gold.

There is a new dawn for precious metals. i will not be sitting on my hands - i will be more active than ever before. i see the selling section is very active like it gets when prices get high - it won't be a seller. i understand those who are selling - we have seen false dawns before and it was a prudent move to take some profits but not today i think. When the going gets tough, gold gets going. Recessions are good for real money - even deflation when the buying power of currency goes up in the face of falling asset prices. Gold initially fell in 2008 as we saw distressed sales and the necessity to liquidate assets to bail out crumbling paper asset positions. Then we saw QE gear up and the run up to 2011.

Have you noticed how gold gets a smack down and then quickly comes back - it wasn't like that before - we would have seen prices tumble for months. The world is changing. Gold is coming out of the shadows - we have seen the dawn of a golden age.

Always cast your vote - Spoil your ballot slip. Put 'Spoilt Ballot - I do not consent.' These votes are counted. If you do not do this you are consenting to the tyranny. None of them are fit for purpose. 
A tyranny relies on propaganda and force. Once the propaganda fails all that's left is force.

COVID-19 is a cover story for the collapsing economy. Green Energy isn't Green and it isn't Renewable.

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4 minutes ago, sixgun said:

i fully expect a return to some sort of gold backed currency system. We can see it in Asia. Governments buying gold at unprecidented levels as they move away from the USD. i hear plenty of rumours about the Chinese and Russians backing their currencies and State cryptocurrencies. i am involved in Kinesis which Indonesia is fully onboard with and is making it 'obligatory' to save in Kinesis and so save in gold.

There is a new dawn for precious metals. i will not be sitting on my hands - i will be more active than ever before. i see the selling section is very active like it gets when prices get high - it won't be a seller. i understand those who are selling - we have seen false dawns before and it was a prudent move to take some profits but not today i think. When the going gets tough, gold gets going. Recessions are good for real money - even deflation when the buying power of currency goes up in the face of falling asset prices. Gold initially fell in 2008 as we saw distressed sales and the necessity to liquidate assets to bail out crumbling paper asset positions. Then we saw QE gear up and the run up to 2011.

Have you noticed how gold gets a smack down and then quickly comes back - it wasn't like that before - we would have seen prices tumble for months. The world is changing. Gold is coming out of the shadows - we have seen the dawn of a golden age.

I noticed the bounce back. It doesn't normally do this.It did start me thinking.... I'm not a technical or chart reader (I do follow price) but I think someone somewhere mention that there's a resistance line approaching, the way that bounce back happened and so quickly...maybe some more upside to be had regardless.

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