Reddit's silver "apes" now targeting silver, opportunity or fool's gold?

[disneysteve]

A snapshot (page 1 out 2) of my holdings in my precious metals IRA over the years totaling about $73k worth showing the cost basis, market value,

Is "market value" what you can truly sell it for? I know the dealers/middlemen take a cut of the process.

Do you track the annual return of your precious metal holdings to see how that compares to traditional investments? The numbers on the chart are meaningless with no context of time.

[QuarterMillionMan]

Is "market value" what you can truly sell it for? I know the dealers/middlemen take a cut of the process.

Do you track the annual return of your precious metal holdings to see how that compares to traditional investments? The numbers on the chart are meaningless with no context of time.

Good questions, I think the market value doesn't take into account the dealers cut. The dealers make money selling and buying, sort of like foreign currencies where the price we see is not the price we get. For example Mexican pesos are 18.50 to $1 USD. But at the banks it'll be 18.40 or 18.60 to buy or sell where they'll make money both ways.

As for tracking, not really do I track the precious metals to regular investments or others such as bitcoin. I've been investing in precious metals maybe for the past 5 - 7 years but not every year do I make contributions to it. One year I opened a bitcoin IRA and max'd at $7500 (when bitcoin was at $40k). As we know today a bitcoin is only worth $23k, so that $7500 is about half the value today. I haven't checked precisely how much it is worth because I don't want to know, lol.

[QuarterMillionMan]

Speaking of mark ups check out this 1/1000 of an ounce goldback for $5. Equates to $5000 an ounce of gold, silly to pay that kind of mark up.

Buy Utah Goldbacks for Sale - 1/1000th oz Gold UT (New) | BullionMax

[disneysteve]

Good questions, I think the market value doesn't take into account the dealers cut.

That was my guess but I wasn't sure. In that case, you need to discount the listed market value for whatever the typical sales cost is.

As for tracking, not really do I track the precious metals to regular investments or others such as bitcoin.

How do you then decide if it is a good investment, worth holding onto, and worth buying more?

For the 10-year period ending 12/31/22:
US stocks had an average annual return of 12.44%.
Gold had an average annual return of 0.92%.

Even a super boring total bond market index returned 1.39% over the past 10 years.

[QuarterMillionMan]

This is my way of hedging or more precisely my way of prepping should the USD lose its status as the world reserve currency. I don't have full faith in fiat currencies. But I'm only about 10% in precious metals of my total net worth. Cryptos less at maybe 5%.

[disneysteve]

This is my way of hedging or more precisely my way of prepping should the USD lose its status as the world reserve currency. I don't have full faith in fiat currencies. But I'm only about 10% in precious metals of my total net worth. Cryptos less at maybe 5%.

I assumed that was your mindset. It pretty much always is when anyone explains why they buy gold. It's a lousy investment.

[james.hendrickson]

Let's talk about gold and crypto.

My understanding is that a minimally appropriate amount of alternative investments can add diversification to one's overall portfolio of assets. Thus while gold itself doesn't have the same compounding effects as say...shares of Coca Cola or Microsoft, gold does make a portfolio more diverse.

[QuarterMillionMan]

Good redirect James, I was about to go further on how every fiat in history has ...... (but yes gold & cryptos to remain on topic).

[james.hendrickson]

Disneysteve is correct - an ounce of gold is lousy in the sense that it doesn't produce dividends. So unlike a highly successful company like say...MMM or Starbucks you won't be able to compound the dividends.

While we are on the subject - there is something to be said for holding an asset that's been used for thousands of years. Gold has been a reliable medium of exchange since agricultural civilization started. So, there is nothing wrong with having a few ounces of gold.

[disneysteve]

My understanding is that a minimally appropriate amount of alternative investments can add diversification to one's overall portfolio of assets.

I don't disagree with that. There are also ways to invest in precious metals without buying physical metal like mutual funds, mining stocks, etc. We used to own a precious metals fund in one of my wife's retirement accounts but sold it off when we did a rollover of that account.

[LivingAlmostLarge]

I had a client who bought real bullion gold and silver dollars. To give as gifts to his grandkids

[QuarterMillionMan]

it's more of an insurance measure rather than investing in precious metals. Sort of like car insurance and it's great if I won't need to file a claim but it'll be there if needed.

[QuarterMillionMan]

Precious metals have been on the move higher, not sure what is causing it.

[QuarterMillionMan]

Gold's spot price closed at $1989 the highest ever. I predict when it reopens on 3/19/23 at about this same time it'll go over $2000.

[QuarterMillionMan]