Investing in Gold

[Lord LaLa]

I am currently looking to get a full time job, and am debating about making a 10 year investment in gold. I.E. Spending 10% of my yearly income on bullion for 5 year's and have it sit for the next 5 years. Once i get the full time job, my net expenditure for the 5 year period should be ~$12676.

What do you think of investing like this, and would you say it would generate a sizable income?

Just looking at the increase's in 2003 gold price's per troy ounce were $319.75 on average. Current price = $1693.50

Say i spent $12676 on gold today. That would equate to 7.485 Troy Ounce's. If the gold price increased in the next 10 years like it has the past at ~529% that would be a gain of $67,056.04 total gold worth with a end of profit of $54,000.

My main concern is do you think gold price's will keep raising up by the end of 10 year's, or do you think they will crash for whatever reason.

 

[Matresa]

Only way gold would crash would be if they suddenly uncover a vastly inmense gold mine, which doesn't seem likely.

Gold just keeps running less and less... It's definitely not a bad idea to invest in it.

 

[Apith]

This is just another bubble waiting to pop. Gold will not increase 500% to $8000 per ounce.

If you expect it to increase to $8000 (500%) like it has in the past decade, well you will spend more than $12600 as you would be buying it over a 5 year period.

It will, and has to, crash. Gold is useless really and is nothing compared to silver. Silver is in demand and is used in a lot of things. Just like the Real Estate bubble that popped around the world.

Warren Buffet has said that he would never invest in gold, and his company once bought out majority of the silver. I believe he purchased 100M ounces of it, he was forced to let go of it. He was that sure of Silver. Google the things Silver can be used for. You might want to invest in that

 

[video]

You're cherry-picking your data very heavily. Instead of thinking of it as 500%+ rise over 10 years, why not look at it in the longer-run as a much-smaller 190% rise over the past 30 years? Also, considering that $1.00 in 1980 is worth $2.73 today (http://www.measuringworth.com/uscompare/relativevalue.php), if you had bought gold in 1980, and sold it at its very peak today, you would have made only 17% on your 30+ year investment. I've cherry-picked my data too to demonstrate a point, I'll admit that. Point being you can't just look at a small chunk of data and project it onto the future.

You're also not the only one who has noticed this upward trend and is thinking of investing. Millions of people have. And eventually this overhyped demand for gold will cause it to fall. What we're looking at is some sort of perverse demand curve that is increasing as price rises, and that can only lead to a crash or at the very least, instability. I wouldn't necessarily recommend silver either, but I do think the gold market is a very risky one at the moment. In the long-run, price will certainly increase, but in my mind it's bound to decrease heavily sometime in the next few years

 

[jordlea1]

Fairly bad idea. The price of gold has been manufactured especially over the last couple of years. Gold for quick profit works fairly well, whilst working in Jersey (UK) for a large bank i was buying untaxed gold at merchant value in bar form from anything from £14,000 to £55,000 and bringing it back through the terribly inefficient border services in Island to UK airports or ferry terminals. The profit was instantly 33% when sold to a ready and waiting contact.

The risk of getting caught with £55,000 worth of gold being smuggled into the UK was simply to great. Although i would have no criminal charges as they would have to proove i'd purchased it in Jersey and not in the UK but the rigmarole of getting it back would be too high. So i stopped using this method as it also interfered with my job

 

[chr1$]

I would hop into both investments Maybe more of silver over gold.

I cant give you fancy numbers but I can say that silver you can stack in multiples easy. For instance a roll of Mercury dimes, If the price raises then ever single dime individually raises. Either a really really good thing or silver drop then all you'r unit's prices have fallen all in one. But that doesn't mean sell it. Silver is something you really have to watch. Gold imo. has been that fallback that pawn shops always buy.

I hope I made a little since. Im not a profesional explainer if I completely confused ya then completely ignore me .


I have dabbled in silver before, so im not a complete noob. But its all about what and where your buying it for or from.

 

[Lord LaLa]

I have already looked into silver, and while it is not as high as gold, i currently have ~500 gram's in pure Sterling Silver.

 

[Fendle]

Silver, silver and more silver my friend. You can thank me in a few years after you invest.

 

[R2Pleasent]

Bitcoins > Gold coins

 

[Fendle]

Bitcoins > Gold coins

Bitcoins confuse the hell out of me, I know this guy who was into them and they sound complicated. Have you invested in them, also the cashing out process seems hard.

 

[arong]

Silver, used in production much more then gold, will definantly be scarcer than gold in future. At the GSR at over 50/1, I say buy silver and if you really want, swap for gold when the GSR hits around 40/1. To be quite honest you shouldn't look at bullion as an investment, it is more a wealth storer. Only buy physical, do not buy paper bullion. Also do some more research and ask yourself, why do you want to buy it? What is your exit strategy? I do believe silver will out do gold within the next 10 years but gold seems to be a safer option. If pm's rise silver will do better, if they fall gold will do better. My opinion only

 

[Fendle]

Would investing in silver even cover you in terms of inflation.

 

[iAGZzzz]

Prices have risen due to high consumer confidence and high demand. There has always been a relatively low supply of gold, and there always will be. However I predict this is just a stage. It's been hyped up and talked about so much, many people are investing, which is meaning there is higher demand and prices have risen.

You have to not only think about what gold is going to do in the market, but what substitute investments will do.

Oil is another obvious investment good, and if investment in oil increases for whatever reason (say more reserves are discovered), then investment in other areas will decrease.

Even the greatest Economists will struggle to answer this question for you. It's about predicting the future, and at the moment shares can be incredibly volatile.

High growth rates, whether it's for an economy of for a commodity and never sustainable in the long run. Take the British pound (sterling), for example. It had a very high value during the economic boom in England, which ended in 2007. The value shot up for about 7 years, but the rise wasn't sustainable in the long run, which has lead to the huge dip and the recession we are currently in.

The business cycle basically shows your options:

Go for something with a slower but more sustainable growth rate in the long run. Gold is better for short term investing due to the daily fluctuations in price.

have a look around and see what over the last 30 years, has experienced constant growth. It will be safer, and will likely bring better returns in the long run if you are thinking of a 10 year investment.



Sources: Me, Economics A-Level and dual honors degree.

 

[win4fun]

Regardless of whether gold's a good investment, I wouldn't put all of your eggs in one basket. If gold does badly you'll lose a lot of money whereas if you diversify your investments a poor performing gold value will be diluted by the outcome of your other investments. Good luck with your investing.

 

[Fendle]

Most bullion sellers sell gold over priced so its hard to make a profit.

 

[Pockets]

You're cherry-picking your data very heavily. Instead of thinking of it as 500%+ rise over 10 years, why not look at it in the longer-run as a much-smaller 190% rise over the past 30 years? Also, considering that $1.00 in 1980 is worth $2.73 today (http://www.measuringworth.com/uscompare/relativevalue.php), if you had bought gold in 1980, and sold it at its very peak today, you would have made only 17% on your 30+ year investment. I've cherry-picked my data too to demonstrate a point, I'll admit that. Point being you can't just look at a small chunk of data and project it onto the future.

You're also not the only one who has noticed this upward trend and is thinking of investing. Millions of people have. And eventually this overhyped demand for gold will cause it to fall. What we're looking at is some sort of perverse demand curve that is increasing as price rises, and that can only lead to a crash or at the very least, instability. I wouldn't necessarily recommend silver either, but I do think the gold market is a very risky one at the moment. In the long-run, price will certainly increase, but in my mind it's bound to decrease heavily sometime in the next few years

Regardless of whether gold's a good investment, I wouldn't put all of your eggs in one basket. If gold does badly you'll lose a lot of money whereas if you diversify your investments a poor performing gold value will be diluted by the outcome of your other investments. Good luck with your investing.

These guys hit is right on the head.

Silver and gold can be a great way to diversify yourself, but putting all your money in them is probably foolish.

I have already looked into silver, and while it is not as high as gold, i currently have ~500 gram's in pure Sterling Silver.

Also, pure silver is different from sterling silver. You should be doing a lot more research before investing significant portions of your income like this.

 

[Lvl 75 Def]

Would investing in silver even cover you in terms of inflation.

this.

 

[Pockets]

Would investing in silver even cover you in terms of inflation.

It's impossible to say, as it would be for any investment. However, the cost of silver in real terms would be unaffected by inflation.

 

[PIAV]

Only way gold would crash would be if they suddenly uncover a vastly inmense gold mine, which doesn't seem likely.

Gold just keeps running less and less... It's definitely not a bad idea to invest in it.

Even if this happens it will only be a temp decrease, and then it will begin to increase again.

In reality, gold is worth more than paper. I would definitely recommend doing this, it seems like a very wise decision.

 

[andrewjconners]

I personally believe in silve over gold. Gold has a higher drop rate than silver does and more silver can be bought and sold than gold because it's cheaper. Although prices have been odd lately i'd let it hit about 28$ before I start pouring money in again.

Also coin collections made up of silver coins like Franklin Half Dollars, dimes, ect. will carry value which can be made up basically for the price of melt at some coin shows and shops.