Small practical investment - opinions ...

[ego]

I been thinking to buy gold.
Collect on gold bullion.

Reasons.
I find it being a good investment as gold we only get less of from the mines like oil witch make it more attractive and expensive.
The curve of golds price development is much better then founds or stocks.
You can also borrow money from you own gold "pledge" like taking a bank loan of your own gold.

This is why i this weekend been thinking to buy some gold bullions ...
It exist gold bullions in different size/weight witch fit most wallets.

[albertojonas]

 

[ausguy]

Ego - you need to do a lot more homework on this. Gold peaked at around $1,900 USD per OZ in Sept. 2011.

Earlier today gold was priced at $1,640 USD OZ and in Wall St.early trade the price has nose dived $40 to around $1,600 USD OZ. That currently shows a $300 price drop in 8 months.

For research Kitco.com is a good place to start. Great site for current trade charts and historical charts. Not only gold but silver, platinum and other precious metals. They are US based and there is a forum available there on their home page.
Another forum site is an OZ one HotCopper.com.au  It's free to join. They have very active threads on many investment directions. For gold or silver just type that into the window upper left side.
You need to join up b4 you can activate things.

The oil price fluctuates due to market forces. Currently it's down below $100 a barrel. Gold is a commodity and so it too goes up and down.
It would seem that while the US & Euro economies are still weak the bail outs have prevented a crash. Recovery is slow but some investors who used gold as a store of value are now selling their holdings to invest in undervalued stocks. This sell off reflects the downward price value of gold,silver etc.

As I said Ego do your research and homework as gold may take years to improve in value? There's not much profit from small gold holdings anyway. Even if you had a few ounces that doubled in value $4,500 or so is not the critical $$$ mass needed to secure your future?
Many investors make good money from investing in emerging gold mine producers by profiting from share value increases. Rare Earths are an emerging industry. These minerals are used in screens, the white stuff on monitors, energy saving globes etc. super magnets in wind turbines & hybrid cars and heaps more. China has cut export supply so the rush is on in the West to get mines & production going. I'm in OZ so look at Lynas Corp. They mine here but setting up in Singapore to process.
It's a difficult mineral to manage as uranium can be present so delays in Asia with politics etc.

All the best with it Ego.

[Colbster]

Did you mean to post SPY in response?

[Steve]

Gold has held its value for thousands of years if not more. It's "pretty" and has some good properties for manufacturing. But mostly what makes it valuable is PERCEPTION. And perception is changing because the world is going through an awareness shift. Gold may always be prized, but especially now because so many people are buying gold, it is OVER-PRICED.

And difficult times are going to get worse. You can't eat gold. For now gold is a bad investment. There are much better places to put your money. If you want to buy metal, try one of the others as you'll get better value. Focus on retaining value more than profiting. But still, you can't eat metal and it will become less valuable soon. Keep in mind $1000 of anything is still $1000 worth. What will people want most when the global finances get even worse? Gold?

[Skakus]

 
I like old aerated water bottles, ginger beer bottles, etc.

I recently bought about 1000 bottles for $4000. I just sold the first bottle for $3727.00.

Only 999 to go! 

[GARNabby]

For now gold is a bad investment.

About 15 years ago, i bought my dad a used but like-new solid 14K bulova watch with small saphires and rubies, for $3,000 after taxes.  Even the guts are made of gold.  Had it engraved with A8, a winning hand at blackjack.

What was gold then, $200?

[ausguy]

Steve - "You can't eat gold" you say- but you can't eat money either, can you? You can't eat super statements, nor share certificates and not even glass bottles (Skakus). Yes, granted you can't go to the local supermarket with a bit of gold and buy some food.

In practical terms you stump up your cash money to buy gold (usually from a bullion dealer).

To sell any gold an investor would return to the bullion dealer and sell the gold for cash money.
A small % fee is always paid to the dealer.

With gold at around $1,600oz the reality is usually big ticket items. Like a 10oz gold bar will give you close to $16k.

I disagree with you on your point of gold being over priced. If you look at the ever rising cost of production for many miners gold is actually undervalued. Ego was correct on his point about falling gold production. Many mines are under pressure to profit from lower grade ore resources. Some mines have $900 - $950oz production costs.

The well known Beaconsfield mine (the 2 trapped & rescued miners) is or has closed because the low ore grades made it uneconomic.

The biggest risk anyone has is protecting their assets against inflation. As an example -
Workers of senior age with bulk $100,000s in super funds that have lost lots of money some years. A neighbour lady in her 50's gave up work in 2008 to care for her sick husband. 3 1/2 years ago her super balance was $107,000. A statement this year put her balance at $88,000 & a $19k loss in 3 + years. Even if she'd changed to self managed super and put her funds in bank term deposits she would have seen modest gains on her money and nil losses. Even when I said that to her I just got the blank stare signalling the TOO HARD FILE? These super funds still get their fees whether they make you money or lose it.   

What if these workers self managed their funds and bought gold bars and put them in a bank security safe? If they did that 10 years ago they'd be laughing today on a 400% +/- profit?
If they did it now what would that gold be worth in 10 or 15 years time when they retire? Most people ( 80% + ) fear self investing their super. Less than 20% do it.

For those that kept their dollars in super how much will their money value have been eroded by inflation? How much was food and petrol and living costs 10 years ago? How much will things cost in 10 - 15 years? Already we are seeing alarming rises in energy costs.

Goverment pensions will not bail people out like now in future years. Already in OZ they have increased the pension age from 65 to 67, someone told me it's now 68?  Is it in France they riot because the Govt. there wants to raise it from 60 to 62?   People I talk to say they'll worry about it all when they retire. This is one thing that needs preplaning decades before. It will be all too late once they get to the retirement finish line or they may need to continue working if the can keep a job? In OZ you can retire on your super after 55. However normally the bulk of interest gains is made from age 60 on, the thick end of the compound interest wedge. 

Skakus has found an alternative to gold = old bottles. This is a good example for any investor in relation to knowing the product your dealing with and understanding its related market. 

[Skakus]

What was gold then, $200?

Closer to $500 I think.

I bought 14 one ounce Australian nugget coins in 1989.

They cost about $500 each. It took a long long time to realize any significant profits.

I was a rash fool and sold at $1200 before the current peak!

[Steve]

Steve - "You can't eat gold" you say- but you can't eat money either, can you?

No, but like money, gold is based on PERCEIVED value. People's perception is what makes it valuable. Anything of real or perceived value can be used for trade, be it food, land, gold or even bottles. My point is when economies collapse (and more is coming), everything goes back to basics. ie food, water, land. Gold and money loses its value. This is my point.

Inflation is caused by the increase of money supply from debt. Money is literally debt, and once more people understand nothing is backing the paper, money will lose much more value. So having money sitting in an account is not a smart idea. Gold is a form of currency but at least it is real and tangible. But still when economies collapse, things that matter most inevitably increase in value while the less important things lose value. I'm not sure how anyone could disagree with this.

Whether or not gold is overpriced, we'll just have to wait and see if I'm right.

As apply and demand change, prices of things will change. If you buy low sell high, you profit. Simple business. You can only count on constant change and predict the trends and act on them before they occur. Hey thats business, and I'm in the middle of getting out of it as much as possible.

[ego]

One thing i like with gold is that i can get a loan and the percentage for that loan is the same at any bank.
The difference is i borrow money on something i physical own - my property.

I been thinking start out small and buy 5 (10 grams bullions/bars).
So i don't only see it as a long time investment - i also see the benefit that i can take a bank loan of my own property/gold

Also in Europa winning are tax free - but outside boarders you have to pay tax and there is also limits for how much you can take in and out from contries.
I recon no one care about my personally jewelry i am wearing 

[ausguy]

Ego - So 50 grams of gold might cost you about $2,800 or about 3,600 Euro. To most banks that size money value is at personal loan level. It's not big money when compared to housing and business loans in the hundreds of thousands. A lot of people have credit card limits of 5,000, 10,000 & much higher without security.

I would be suprised if a bank would loan you more than your gold was worth anyway at lower than credit card interest rates? The banks would view your gold the same as cash because you could sell it at any time you liked. It's regarded as unsecured. To have it secured the bank would need to have custody of it. I doubt that they do business like that?

Before going ahead with anything go to a friendly bank and run your plan past them and see what they say. My bet is that you'll change your mind on all this?

With gold bullion trader fees and bank fees and interest rates it may well be more expensive than you think? I think a better option would be to keep your money in the bank and not buy gold and operate those funds on a debit card. For back up money you could get a credit card to the same
value you planned to borrow from the bank less your gold purchase budget.

A likely amount could be 3,600 Euro of your money on a debit card & 3,600 Euro of available funds on a credit card.  This then gives you access to 7,200 Euro on cards that are valid virtually world wide. Safe too unlike the bling of 3.6k of gold jewellery on you. Thieves would take great joy in finding a guy with so much gold value. People get killed for a lot less than 50 grams of the yellow metal.

It looks like you are planning a casino trip somewhere. Large wins (if lady luck smiles down on you)  can be banked locally onto your debit card. There's no need to carry lots of cash anywhere you travel.

[bikemotorman]

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[Still]

Here are some interesting stats on gold i got from a researcher...

In the past ten years, if you would have:

1.) Bought gold and held it, you would've made............................................................... 500%
2.) Bought gold on the open of the New York session and sold each day same session........... -70%
3.) Bought the close of the New York session and sold the open the next day........................4500%

Reason?  The researcher explained how the market for gold and silver are manipulated. 
A whale pushes the price down suddenly during the day, and another whale gradually buys throughout the night.

I mention this in case anyone might suggest a way to make bets on this. 
I'm thinking binary options.