Ask a gold question

farouk

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I have been a gold bullion collector. But my primary interest has been in the Islamic gold dinar coins although I have a collection of maple leafs and and double eagles. I hope to share some knowledge here in the hope that I get more knowledge in other areas such as bonds and reits. So do ask me any gold questions that you may have especially now that prices are dropping.
 

Slowdown

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One forumer will be asking you one important question very soon. By the way, he don't ask in gram or oz but in kilos.
 

Shiny Things

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Sure, I've got a question.

Moves in the gold price correlate tightly with short-term interest rates in the USA - when rates go up, the gold price goes down; and vice-versa.

My question, then: should I own gold if I think the Fed's going to spend the next three years tightening policy? If so, why?
 

prophetjul

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Sure, I've got a question.

Moves in the gold price correlate tightly with short-term interest rates in the USA - when rates go up, the gold price goes down; and vice-versa.

My question, then: should I own gold if I think the Fed's going to spend the next three years tightening policy? If so, why?

Why do you think the Feds are going to tighten?
If so, why?
 

genie47

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OK put it simply. Don't claim to be an expert here. Don't come around telling people they can ask you questions. Because, many here don't trust experts.

The problem with being an "expert" means you know "certainty". The moment you claim "certainty" they become skeptical because they know certainty is bullsh1t.

Most people in this forum knows as I have stated earlier, you eat some now but save some for later. They will put money in gold but they won't put all their money into gold. They will put money in stocks but they will not put all their money into stocks.

Many already have a portfolio with target allocations. If they have gold, they will keep to their targets. No more, no less.
 

Dividends Warrior

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The Joker says...

joker_for_free.jpg


:D
 

Shahmatt

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OK put it simply. Don't claim to be an expert here. Don't come around telling people they can ask you questions. Because, many here don't trust experts.

The problem with being an "expert" means you know "certainty". The moment you claim "certainty" they become skeptical because they know certainty is bullsh1t.

Most people in this forum knows as I have stated earlier, you eat some now but save some for later. They will put money in gold but they won't put all their money into gold. They will put money in stocks but they will not put all their money into stocks.

Many already have a portfolio with target allocations. If they have gold, they will keep to their targets. No more, no less.

To stick rigidly to any portfolio target allocation is good discipline, but if such target allocation has no basis then it can be foolish.

Expert or no, I think we can make an educated guess as to the future. Consider the facts:

The U.S economy has miraculously avoided depression through "quantitative easing" - i.e. according to the government numbers. If QE can fix an economy then we need not have any industry/jobs etc - governments can print money from thin air to solve problems. History however shows us that this doesn't work.

What is actually happening is that the failed economy is allowed to continue and grow on QE money. The economy exists as long as QE exists. Ergo no QE -> no economy. So never mind the "numbers". Since are meaningless.

Consider rather the damage caused by QE. Naturally, an increase in supply of money leads to loss in purchasing power of said money. Naturally, loss in purchasing power can lead to owners of said money fleeing it for safer wealth vehicles (especially since the "easing" is so huge).

Gold, chosen by the market historically, is the safest wealth vehicle. On this basis we can make an educated guess that, whatever the short term numbers, gold must eventually climb to heights never been seeing before. On this basis revising those portfolio allocations may not be a bad idea.
 

chopra

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One forumer will be asking you one important question very soon. By the way, he don't ask in gram or oz but in kilos.

paging for me?

TS, why you buy coin? How do you mitigate the spread cost?

burstgoldcrash.jpg
 

MikeDirnt78

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To stick rigidly to any portfolio target allocation is good discipline, but if such target allocation has no basis then it can be foolish.

there is definitely no 1 right allocation that can fit all. so far the PP allocation may look good historically. going forward, we cant really tell. but 1 thing for sure is if you really stick to your initial allocation throughout your diversified portfolio, you are highly guaranteed with a reasonable returns per annum in the longer term because of the act of rebalancing ie forced to sell high and buy low assets.

Expert or no, I think we can make an educated guess as to the future. Consider the facts:

The U.S economy has miraculously avoided depression through "quantitative easing" - i.e. according to the government numbers. If QE can fix an economy then we need not have any industry/jobs etc - governments can print money from thin air to solve problems. History however shows us that this doesn't work.

What is actually happening is that the failed economy is allowed to continue and grow on QE money. The economy exists as long as QE exists. Ergo no QE -> no economy. So never mind the "numbers". Since are meaningless.

Consider rather the damage caused by QE. Naturally, an increase in supply of money leads to loss in purchasing power of said money. Naturally, loss in purchasing power can lead to owners of said money fleeing it for safer wealth vehicles (especially since the "easing" is so huge).

Gold, chosen by the market historically, is the safest wealth vehicle. On this basis we can make an educated guess that, whatever the short term numbers, gold must eventually climb to heights never been seeing before. On this basis revising those portfolio allocations may not be a bad idea.

i am just curious. how much gold constitutes to your portfolio? 5%, 10% or 90% gold?
 

genie47

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Always stick to your plan. There is a basis for it if not then why plan for it at that allocated amount?

Whenever you buy any investment you are effectively guessing what the future will be. I cannot make that assumption. I don't recommend anyone to make that assumption.

Investing requires a plan. The plan in general is to buy highly varied instruments to defend against as many possible future outcomes as you can. Take it from Nick Taleb. My portfolio has to be robust. Making loads of money is not as important. Which means gold is part of it. But I'm not banking entirely on it.
 

Shahmatt

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i am just curious. how much gold constitutes to your portfolio? 5%, 10% or 90% gold?

40% physical gold, 8% physical silver, 16% GLD, 14% metals mining stocks (gold, silver, copper etc.).

So all in all around 80% in the entire business of precious metals and metals.
 

chopra

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40% physical gold, 8% physical silver, 16% GLD, 14% metals mining stocks (gold, silver, copper etc.).

So all in all around 80% in the entire business of precious metals and metals.

very rare.
how big is your portfolio. and what's your performance.
 

Shahmatt

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very rare.
how big is your portfolio. and what's your performance.

About 64% of my total wealth (not considering CPF) is invested. So 51% of my total wealth is in precious metals related instruments.

As for performance. As you may know the metals sector has done quite badly, and mining companies are doing poorly as well. But these are as yet unrealized investments.

From what investments are realized, I made about 27% over the last 12 months. This was from about 20% of my non CPF wealth.

I have gradually shifted to metals in anticipation of the correction. Sorry I don't usually reveal my portfolio size. :)
 

chopra

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About 64% of my total wealth (not considering CPF) is invested. So 51% of my total wealth is in precious metals related instruments.

As for performance. As you may know the metals sector has done quite badly, and mining companies are doing poorly as well. But these are as yet unrealized investments.

From what investments are realized, I made about 27% over the last 12 months. This was from about 20% of my non CPF wealth.

I have gradually shifted to metals in anticipation of the correction. Sorry I don't usually reveal my portfolio size. :)

any idea what's the beta between mining coys and the corresponding metal futures. eg, copper.

asking about the size because my impression is that you need a huge sum to invest in both precious and exotic metals in order not to get carrot by the admin charge.
 

farouk

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Sure, I've got a question.

Moves in the gold price correlate tightly with short-term interest rates in the USA - when rates go up, the gold price goes down; and vice-versa.

My question, then: should I own gold if I think the Fed's going to spend the next three years tightening policy? If so, why?

I think the past couple of years the prices of gold have largely decoupled from the Fed's monetary policies. Case in point desoite liberal monetary policies past two years gold has reached astronomical highs driven purely by sentiment. The entry of a mew middle class from India and the Middle east into the gold dinar market has xjanfed the dynamics for a foreseeable fitire
 

farouk

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paging for me?

TS, why you buy coin? How do you mitigate the spread cost?

burstgoldcrash.jpg
If anyone here is familiar with the gold dunar you wull understand that some coins habe an advantage over generic bulliins in that it has numismatics value. Some of the dinar gold coins in my collection are trading above the prevailing price of gold due to its numismatics
 

chopra

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If anyone here is familiar with the gold dunar you wull understand that some coins habe an advantage over generic bulliins in that it has numismatics value. Some of the dinar gold coins in my collection are trading above the prevailing price of gold due to its numismatics

sure. then that's not purely speculating on the future value of gold.

and how much premium does one pay for the numismatics? does numismatics inflate over time? not an expert, hence won't invest.
 

MikeDirnt78

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40% physical gold, 8% physical silver, 16% GLD, 14% metals mining stocks (gold, silver, copper etc.).

So all in all around 80% in the entire business of precious metals and metals.

with such an overweightage in gold, i wonder have you done any backtesting with such portfolio? if you look at the long term data, inflation adjusted returns of gold are mediocre compared to stocks.

just run some data from 1990, 1980, 1970 to current and compare the returns of gold with S&P.

Inflation Adjusted Gold Return Calculator

but if you run from 2000 to current, gold has outperformed stocks. i guess you believe the gold super bull cycle will still continue. but if it isnt?
 

Wildreamz

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I guess he is just holding out for a huge correction in the stock market before he gets in.

That said, I am curious about long term gold bulls, aren't they afraid of a repeat of history, 1980s to early 2000s gold bear?
 
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