What is the attraction of gold as an investment?

Discussion in 'Business & Economics' started by Seattle, May 25, 2021.

  1. candy Valued Senior Member

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    1,074
    There are companies that sell "survival" food packages. I thought the ones I read about were highly overpriced.
     
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  3. candy Valued Senior Member

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    I would favor gold mining stocks over other trading vehicles as an investment.
    If you want the "zombie" survival storehouse you should be buying new issues of coins. Some of them are very pretty. You might want to include some silver coins. It also has some special qualities and is more affordable for the beginner.
     
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  5. sculptor Valued Senior Member

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    um
    no
    (unless you index for inflation)
    gold hit a high of @ 850 dollars us in 1980
    last year, gold traded @ 2070 dollars us

    so
    If you bought gold in 1980 you would have been up over 140% in 2020
    however
    If you'd have bought DOW stocks in 1980, you'd have been up over 400%

    gold is a commodity
    trade it as such
     
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  7. Seattle Valued Senior Member

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    I don't know what chart I was looking at but you're right. However, if you bought at the peak in 1980 you wouldn't hit that price again for 25 years.
     
  8. billvon Valued Senior Member

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    It diversifies it.

    Historically gold has done better than savings accounts, worse than investing in the stock market. It often does NOT follow the market, because people often panic buy and drive its price up when geopolitical unrest makes the markets shaky. Thus it is a good hedge against the market tanking.

    Often investors will hold a pretty diverse bunch of stock as a buffer against catastrophe. I have a small percentage (about 15%) of my money in tax free state bonds. These perform abysmally (about 3%) which barely keeps pace with inflation. But when the market tanks they won't - and thus reduce the total risk of the investment slightly.
     
  9. sculptor Valued Senior Member

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    8,476
    yeh
    I saw a chart that was indexed for inflation, and it agreed with your previous post.
     
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  10. sculptor Valued Senior Member

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    8,476
    If you shop around, MREs can be had for a little over a dollar a serving---caveat--low calorie (1280?)
    longest shelf life if stored in cool to cold location
    and
    you're gonna need water and fire
     
  11. Seattle Valued Senior Member

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    8,874
    Covered calls does a much better job IMO.
     
  12. billvon Valued Senior Member

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    21,645
    Agreed. It's just one of many ways people diversify; some better than others.
     
  13. Seattle Valued Senior Member

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    8,874
    In times of low inflation cash isn't a bad way for shorter periods of time. You might earn a little interest in a money market but a smaller amount of cash can substitute for a larger portion (of lower yields) in bonds. The advantage being that if things turn down you either have cash for unexpected needs or you have money to invest in the market at now lower prices and you didn't have to tie up as much capital in bonds.

    I just can't bring myself to look at bonds considering the all time low rates that we are at. It can only go up and with bonds yield and interest rate are inversely related. When I was in grad school in 1980 (and broke) interest rates were at all time highs and have only come down since there.

    That would have been a great time to invest in bonds but of course as a student I was broke.
     
  14. Write4U Valued Senior Member

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    20,080
    To pay for the large costs of ongoing borrowing.
    IMO, it is not so much a matter that the value of gold increases as the fact that the value of money is subject to inflation.

    Case in point was the value of the German mark just prior to WWII

    Hyperinflation in the Weimar Republic

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    A 5 Million Mark coin,

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    Weimar Republic hyperinflation from one to a trillion paper marks per gold mark; values on logarithmic scale.

    https://en.wikipedia.org/wiki/Hyperinflation_in_the_Weimar_Republic

    --------------------------

    How Inflation Affects Gold Price

    The Causes Of Global Inflation
    What just causes inflation? How inflation affects gold price? This short article will answer those questions.
    Why Gold Price Goes Up?
    https://infoforinvestors.com/investing/gold/how-inflation-affects-gold-price/#
     
    Last edited: May 27, 2021
  15. Write4U Valued Senior Member

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    Gold’s Impact on Modern Life
    Posted on February 19, 2014 by Minerals Make Life
    .........more

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    https://mineralsmakelife.org/blog/golds-impact-on-modern-life/#
     
  16. ThazzarBaal Registered Senior Member

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    It feels great in the hands and it's shiny. I like it, but I also like 1 dollar coins, which I'm finding difficult to obtain at cost. The markups tend to make purchasing gold less attractive. The same is true for regular 1 dollar coins. I hate cryptocurrency and while counterfeiters continue to find ways to replicate, the prospect of gold in hand seems valid, if not promising, but like I stated - the markups null and void any real interest on my part, so it feels great in the hand and it's shiny.
     
  17. Write4U Valued Senior Member

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    Gold is a rare metal that is not native to earth and due to its purity and utility in electronics it will always be in demand for use in electronic equipment.

    Gold: Facts, history and uses of the most malleable chemical element
    By Stephanie Pappas, published March 03, 2022

    Gold is the 79th element on the Periodic Table of the Elements

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    https://www.livescience.com/39187-facts-about-gold.html

     

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