Finance and Economics > Economic News, the Global Economy and all Things Monetary

Gold is a Terrible Investment - According to Dave Ramsey

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bigbear:

--- Quote from: Dentoro on March 20, 2015, 02:17:09 PM ---Bigbear you are right, to a point, but if it is not coveted or valued, why do so many work so hard to get it and why do governments keep so much of it?

--- End quote ---

It is valued.  It's valued more or less every day.  It's valued like anything you can trade your work for (or whatever you're given for your work).  People are working hard to get to it because there's a market for it.  Just like the supermarket or stock market, there's a market for gold.

To your point though, the market/consumers/investors allows companies to employ lots of people and still make it profitable for companies.

Carl:
Gold and silver are a lot like measuring peoples height with a yardstick
people are taller and shorter ,but the yardstick remains the same.
Gold and silver are that yardstick.

R_Morgan:
If you goal is to "make" money as an investment then yes its not the best.  You aren't going to see 8% returns everyear that you aim for with traditional investments in stocks, bonds etc. So dave ramsey isn't wrong but he's not right either. As jack had mentioned he also told people to buy into housing as it was going down since "its on sale". Dave has great advice for getting rid of debt and budgeting. For those two things I recommend him 100%. For "investing" and wealth preservation not so much.  And my two cents are. When you buy metals you should never even check the prices to see how much you've "made". Only time is if you know you'll need to sell it because you want to buy house/land etc and want to hit higher price than lower, etc. Other than that stick it away

ResidentCelt:

--- Quote from: Carl on March 22, 2015, 05:18:48 AM ---Gold and silver are a lot like measuring peoples height with a yardstick
people are taller and shorter ,but the yardstick remains the same.
Gold and silver are that yardstick.

--- End quote ---

Kinda. There are industrial uses for both, and that affects the actual real value of both.

David in MN:
I think what people miss is that precious metals, being a "store of wealth", necessitate "wealth". In less gentle terms, people with no money have no wealth to preserve. It makes no sense to scrimp on food just to get a small piece of something shiny in the closet. On the other hand, it is nice to have a little metal to offset the fat tail risk of being 100% dollar denominated (supposing you have the capital to invest).

I use metals 2 ways:

Every year in August I rebalance my portfolios. I transfer a portion of my high-risk trading gains into low risk vehicles like gold, silver, platinum, bonds, CDs, etc. (this is called a barbell strategy). I know there is still some risk there but far less than my usual routine of betting on biotech startups, options trading, rare venture capital projects, forex, Bitcoin, and commodities.

The second method may disappoint... In a lot of ways, metals aren't an investment. I have no intention of ever selling or using them (I do try to use silver to barter from time to time but it's more of a political statement). If my goal is to fill a safe with metals (it is) and never sell, it's not really an investment. And it's sure not putting money in my pocket like a dividend. It becomes money that disappeared.

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