Why buy gold and silver as investment? - Coin Community Forum

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greenprint Valued Member United States 151 Posts	So I don't really get it. If you have some extra money then you should invest it instead of just letting it sit around and do nothing because money inflates. If you buy something and over time the money you spent to buy that something inflates, then the value of that thing also inflates. So why gold and silver when you can buy anything? You can store your wealth in anything? There are so many other things you can buy then bullion that you can actually use and make your life easier. If I had an extra $200, why should I buy some PM when I could like buy a textbook, an extra computer monitor, etc.?
Pillar Of The Community Australia 6787 Posts	Anyone who invests takes risks. Doesn't matter if it is your own business, education, shocks and scares, interest bearing deposits, bonds, pork belly futures, or whatever. The motivation is to make a profit, eventually. Same with PM's. Invest in a market that you like, and have greatest knowledge in, and what you think will benefit you the most. If you don't really know, and still wish to invest, diversify. I have had advice from a professional advisor, that it would not hurt in most cases, to put some, but no more than 5%, into PM's. Sounds rational to me! My 5% is not into PM's, but into numismatic items. One problem for me. It has to be a lifetime investment. That's OK; I have had a lifetime interest in numismatics.
Moderator United States 4094 Posts	Quote: greenprint If I had an extra $200, why should I buy some PM when I could like buy a textbook, an extra computer monitor, etc.? textbooks go out of date and technology advancements make computer monitors become obsolete quickly. PM's may increase or decrease in value, but they don't go out of date or become obsolete.
Pillar Of The Community United States 654 Posts	The concept I think you're hinting at is opportunity cost. Both durable and consumable goods are used up over time. A textbook is information and information is notorious for growing stale very quickly. However, you said, "You can store your wealth in anything?" That's not quite true. The goods that you and I buy everyday, the goods that make our lives more comfortable, have value but that value has a finite time frame. There's no way to "store value" in a pizza, or a month's worth of A/C in the middle of summer. Sure we benefit, but once consumed, these goods are gone and must be replaced. There is no "store of value" in these expenditures. So what about gold and silver? Well, for centuries precious metals have been the go to store of wealth in times of trouble and uncertainty. Additionally, for much of human history, gold and silver has, quite literally, been "money" or the base of exchange for all transactions throughout much of the world. The reason for this is pretty simple: gold and silver (unless damaged or otherwise lost) doesn't physically degrade. They are durable and thus a store of wealth. So, what to do with that $200.00? Well, if you need to eat? I'd buy food. If you need to pay rent to keep a roof over your head? I'd pay rent. If all of your basic needs are met, I'd put that money toward a retirement plan in stocks or another age appropriate investment vehicle of your choice. Once all of that is covered? I'd consider buying gold and silver... or Beanie Babies...or Magic the Gathering cards...or whatever sounds right for you. In other words, put it toward something you understand, and more importantly, something you enjoy. Edited by coinwatch Today 10 Hrs 29 Min ago
Pillar Of The Community United States 6817 Posts	Sel gave some really good adivce. Just to add on a bit I would suggest diversifying even if you are sure of what youre doing. Some stocks, some in the bank, more than one stock ect. No one hits on every investment they make, but diversifying gives you protection when you do miss. A lot of what you hear on about investing in PMs is from people trying to sell you them or people with a financial interest in them doing well. There is value to having a small percentage like sel mentioned just in case, but they arent the get rich quick scheme theyre made out to be. If you look at prices for the last 100 years there have been a couple periods of price run ups when things arent going good. The problem is those runs up are decades apart. If you buy heavy during a run up and hang on to it youre underwater in the investment for a long period of time. Even when the price returns to where you bought youd be out a lot of years of interest payments or dividends from stocks ect. The time to buy for someone wanting to do that is during a booming economy when the prices are at rock bottom. Even then it will like be several years or longer before it pays off. Even if you just look at the last 2 years theyve been losing value overall for a while after the big price spike.
Pillar Of The Community United States 1248 Posts	BB's thoughts pretty much echo my own, which generally tends to be the case. It's not a popular stance to take on a PM forum but I believe buying PMs as an investment vehicle is a losing proposition unless one is fortunate enough to buy when silver- for instance- flatlines below $10, its traditional stabilization point. Even if one times things perfectly, its a potentially decades-long waiting game before metals once again explode into prominence and the opportunity arises to make a substantial profit commensurate with one's initial grubstake (that's an odd word, isn't it?). My personal interests lies in buying limited release numismatics below market price and (hopefully) watching these coins increase in value over time. If they don't, and here's the key, I only buy coins I personally like. I view them more along the lines of family heirlooms than true investments. In the last year, I've had the opportunity to sell a coin for $2000 that I paid $75 for and never once seriously considered pulling the trigger. That test case leads me to believe that most of the coins I own will likely remain in my possession for generations to come, barring some future unforeseen tragedy that forces my hand. If you haven't noticed by now, I don't proofread veery well and I apollogize profusely. (;>D
Valued Member Japan 448 Posts	Gold and silver are not an investment vehicles! they are for savers ... period to save of at lest 5 years ... the more the better. The thing is with the metals - they never, I repeat, THEY NEVER GO TO ZERO. Your bank may go bankrupt, stocks may disappear, dollar might be extinct with the inflation, but metals will be there for you. I have very small core of physical gold and silver ... on average every month I'm adding about 20 oz of silver: somenumiz, some semi-numiz, some junk silver coins ... trying to trade them for better ones all the time
New Member Romania 14 Posts	The idea is to split risks and not keep all your wealth in paper money/bank accounts, because they are extremely risky. Gold and silver are known to hold value better, but as you see, their prices kind-of crashed recently... so many who bought gold and silver lost part of their investments. I think it's great to buy real estate, because prices now are very low - compared to earlier years. So go for land, homes and also buy some gold. No, I wouldn't buy another computer, if I were you... it eventually gets old, obsolete and might not even work after a while. Static hard values are best buying: gold, silver, land, homes... etc. Or, invest in a business that produces profit for you. The idea is to buy some of this and some of that... I don't believe 100 % in anything.
Valued Member 156 Posts	I see what you're saying greenprint. And personally they aren't for me because I have no real interest in bars or bullion 'coins'. They aren't what I consider to be part of numismatics, because to me what you collect needs to have been produced to circulate as a coin, to be spent or saved. That's what makes coins interesting to me, their use in society, how they passed from person to person, what they could buy and what they say about the world in which they were made. But mankind had admired precious metals for millennia and if people want to collect the stuff I guess I get that. And Eagles, Pandas and Britannias are certainly more fun (in my eyes) than a certificate saying you've paid for 10kg of silver stored in a vault and that you'll never see! As a relative noob here I find there are those on the forum interested in PMs and NCLT commemoratives etc and those interested in good old-fashioned circulating coins. Sometimes there's an overlap, a lot of the time, it seems not. But that's fine. As coinwatch says, once your essential needs are met, well people are free to spend their money as they wish. And I can certainly see the appeal of precious metals lasting longer than say, Beanie Babies!
Pillar Of The Community United States 654 Posts	I'd add a couple of thoughts to bekiz and VintageRacer's comments. First, unlike real estate, small amounts of gold and silver don't have a carrying cost (annual taxes, maintenance) while still having durability and appreciation potential. Second, outside of buying a wedding band or two, and maybe a few pieces of nice jewelry for the wife over the years, buying gold and silver isn't for everyone. Especially for non-numismatic gold and silver, buying ETF's often makes more sense than buying physical. Be honest with yourself. If gold and silver isn't for you, that's completely okay.
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