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Thread: At this point, stocks better investment or gold?

  1. #1

    Default At this point, stocks better investment or gold?

    For 5-10 year horizon.
    Many people lately see gold as a good investment but at these prices does it still make sense to buy gold?
    In any case, appreciate your view on what you think is the safe investment in current economic environment.



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  3. #2

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    It can be both. I have about half my portfolio in gold bullion and gold miners(and silver) the rest is in foreign and/or energy related stocks. I am researching MLPs as I believe they are probably the best investment out there for the long term, though they are near all time highs and I would wait before entering.
    What I say is for entertainment purposes only!

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  4. #3

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    Both are stronger together. Gold and stocks will give you good diversification and protection for the future. For investments you don't need to pick one or the other, diversify!

  5. #4

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    Thank you both for your ideas.
    MLP I had no clue about and just googled. Interesting option, will have to look into it as I'm new to it.

  6. #5

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    Both:

    Gold/silver as long term cash savings (instead of currency and bonds).

    Stocks for growth and productive value.

    Peace.

    Quote Originally Posted by nejar462 View Post
    Both are stronger together. Gold and stocks will give you good diversification and protection for the future. For investments you don't need to pick one or the other, diversify!

  7. #6

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    for the 10 year horizon, GOLD GOLD GOLD. The Stock Market as we know it will be a thing of the past by then, probably starting this year, with the Debt Ceiling.

    ---

    Edit:

    I mean Physical Gold. Gold Bullion. Gold Coins. Gold Gold. No Stock Market Bull$#@!. If you havent learned your lesson from the Fiat Dollar, a Stock in Gold is no different than Fiat Paper Money. $#@! the laws and rules and regultions. When (not if, when) the $#@! hits the fan, which I suspect will be well before Dec 21st, 2012, you'll be glad you have real actual physical gold, unlike me.
    Last edited by DamianTV; 07-23-2011 at 02:21 AM.
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  8. #7

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    This is a good question. My favorite source for this sort of thing is the geopolitical and economics expert Richard Maybury. He's the author of "Whatever Happened to Penny Candy" an amazing yet simple book on free market economics and he also authors the newsletter Early Warning Report.

    Two years ago I was looking to do some investing in precious metals and he produced a video series on "Buying Precious Metals" at just the right time: http://www.youtube.com/user/RichardM...14/K5qrKVASvEw

    Here's a summary though:
    He estimates that Gold is very likely to exceed $3000/oz, silver $50/oz (Early Warning Report sample issue on earlywarningreport.com)
    Don't put all your eggs in one basket (basic investment advice). 10% into precious metals is his advice but I felt comfortable with more than that
    Buy the REAL thing

  9. #8

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    Quote Originally Posted by jds8288 View Post
    Don't put all your eggs in one basket (basic investment advice). 10% into precious metals is his advice but I felt comfortable with more than that
    Buy the REAL thing
    What does he do with the other 90%?

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  10. #9

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    Quote Originally Posted by Danke View Post
    What does he do with the other 90%?
    Well for myself I ended up doing about 40% gold/silver

    But for the rest? Whatever seems like a good investment to you. I'd put it in strong companies in an industry you are very familiar with. But that's just me. You could do land, mutual fund, stocks, foreign currency, commodities, bonds, CDs (ha, I wouldn't), whatever you want.

    Basically I would be take the approach of (and I think it's a pretty reasonable one) what if one of your investments went to 0 - what would your portfolio look like? And then build around that. Obviously we don't expect gold to plummet but if it did you're SOL. But if gold doubles or triples and it's 20% of your portfolio you're doing really, really well. Even if the bottom falls out of the dollar you'll still be set pretty good because guess what most people don't have? Gold and silver. Precious metals are also pretty volatile so that's a very good reason for not putting a huge chunk of your assets in them.

  11. #10

    Default At this point, stocks better investment or gold?

    That is a real tough question.

    With all of the volatility in the business sector I would think gold and silver will still be gold and silver no matter how things go.

    I suppose with things changing there could be a chance of seeing it through owning a business that is still in business and make a killing. The thing is though that there are people that have the ability to create what ever amount of money it takes to take it away from you.

    I remember a story about Hostess and the way their parent company was able to get to be such a popular brand off bread.

    The story went that all over the country, and I imagine the world for that matter, that every town had a bakery or more baking bread for the local market. Hostess was able to move into the town, set up and sell bread at a price that would eventually under-price the local people and drive them out of business. They had a lot of money and could afford to do it. Then they could charge what ever the market would bear. Then they would move on to another town.

    Here is how the stock market has been running. Might I point out that when the value of the dollar drops in half it takes twice as much to purchase the same amount of stock. It can be exhilarating owning it and watching it go up. Until you've let the government cut itself in with the capital gains tax and then look back and see it was false profits created by the illusion of inflation.

    While your at it check out on the chart where you were when you started working without any experience and look now how, even though you've gotten raises over the years you make less than when you started.


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  12. #11

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    Gold is not an investment, it's a hedge. Putting anything more than ~10% of your portfolio in gold is pointless unless you believe that the dollar is about to crash.

  13. #12

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    Quote Originally Posted by Teaser Rate View Post
    Gold is not an investment, it's a hedge. Putting anything more than ~10% of your portfolio in gold is pointless unless you believe that the dollar is about to crash.
    Thanks to the Fed it seems to be a pretty decent investment as of late.

  14. #13

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    Quote Originally Posted by MJU1983 View Post
    Thanks to the Fed it seems to be a pretty decent investment as of late.
    Train wreck in slow motion.

    Hindenburging into the future.

  15. #14

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    Quote Originally Posted by jds8288 View Post
    Well for myself I ended up doing about 40% gold/silver
    Not my question. Was wonder what your so-called "geopolitical and economics expert" Richard Maybury did/does.

    10% gave me the lol.

    Quote Originally Posted by Teaser Rate View Post
    Gold is not an investment, it's a hedge. Putting anything more than ~10% of your portfolio in gold is pointless unless you believe that the dollar is about to crash.
    LOL

    Quote Originally Posted by Danke View Post





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  16. #15

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    gold better...just watch the dow/gold ratio until it falls back to 1:1.

    1 to 1 in 1980 when gold peaked, dow bottomed...both around 850.

    hit about 44 to 1 in 2000 when gold bottomed about 250, dow 11000.

    It has been on a slow march lower since and should continue to 2:1 at a minimum from its current 7-8 ish to 1.

  17. #16

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    Quote Originally Posted by Danke View Post
    LOL
    That fact that something goes up or down in value does not mean it's an investment. Is wheat an investment? Is rice? Is sugar?

    An investment is money placed into something which will generate revenue later on. Gold derives most of its value from speculation, and like overpriced houses during the last bubble, its value will come back down once the market realizes that.

  18. #17

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    Quote Originally Posted by Teaser Rate View Post
    That fact that something goes up or down in value does not mean it's an investment. Is wheat an investment? Is rice? Is sugar?

    An investment is money placed into something which will generate revenue later on. Gold derives most of its value from speculation, and like overpriced houses during the last bubble, its value will come back down once the market realizes that.
    $250 to $1600 in ten years while the S&P 500 has been flat. Ya, poor investment.

    Quiz: Test Your "Income" Tax IQ!


    Short Income Tax Video

    The Income Tax Is An Excise, And Excise Taxes Are Privilege Taxes

    The Federalist Papers, No. 15:

    Except as to the rule of appointment, the United States have an indefinite discretion to make requisitions for men and money; but they have no authority to raise either by regulations extending to the individual citizens of America.

  19. #18

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    Quote Originally Posted by Teaser Rate View Post
    That fact that something goes up or down in value does not mean it's an investment. Is wheat an investment? Is rice? Is sugar?

    An investment is money placed into something which will generate revenue later on. Gold derives most of its value from speculation, and like overpriced houses during the last bubble, its value will come back down once the market realizes that.
    "First you get the sugar, then you get the power, then you get the women"

  20. #19

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    Quote Originally Posted by Carson View Post
    "First you get the sugar, then you get the power, then you get the women"
    ahaha i can't stop laughing.

  21. #20

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    Quote Originally Posted by Danke View Post
    Not my question. Was wonder what your so-called "geopolitical and economics expert" Richard Maybury did/does.

    10% gave me the lol.
    He's not a "so-called" expert. He's just not well known. Ron Paul is a subscriber of "Early Warning Report". You should really read the sample issue

    But since you ask about what would Early Warning Report suggest for an investment: the answer is I don't know. I don't have $150/yr to spend on it. But if I was regularly investing I sure would.

    However, his Track Record gives a pretty good indicator

    and a major part of his recommendation is Permanent Portfolio (PRPFX) which has clearly done very well since inception.

    Based on your slight scoffing about the 10% in gold I'm guessing you'd prefer 100%? I haven't figured out what your angle is yet.

    Quote Originally Posted by Danke View Post
    $250 to $1600 in ten years while the S&P 500 has been flat. Ya, poor investment.
    Why the focus on s&p vs gold? Silver has increased at a higher %. Also you can invest in stocks and do better than indexes (s&p, nasdaq, dj).

  22. #21

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    Quote Originally Posted by jds8288 View Post

    Based on your slight scoffing about the 10% in gold I'm guessing you'd prefer 100%? I haven't figured out what your angle is yet.
    There is middle ground you know. Doesn't have to be one extreme or the other.
    What I say is for entertainment purposes only!

    Mark 10:45 The Son of Man did not come to be served, but to serve, and to give His life as a ransom for many.

    "If you want to make a lot of money, resist diversification." - Jim Rogers

  23. #22

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    Quote Originally Posted by jds8288 View Post
    and a major part of his recommendation is Permanent Portfolio (PRPFX) which has clearly done very well since inception.

    ...
    Why the focus on s&p vs gold? Silver has increased at a higher %. Also you can invest in stocks and do better than indexes (s&p, nasdaq, dj).
    According to his website, PRPFX went from around 10 to 50 in 30 years.

    The Dow went from <1000 to over 12,000 now.


    If you're good at picking individual stocks, the more power to ya. Not many are.

    Quiz: Test Your "Income" Tax IQ!


    Short Income Tax Video

    The Income Tax Is An Excise, And Excise Taxes Are Privilege Taxes

    The Federalist Papers, No. 15:

    Except as to the rule of appointment, the United States have an indefinite discretion to make requisitions for men and money; but they have no authority to raise either by regulations extending to the individual citizens of America.

  24. #23

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    Quote Originally Posted by Danke View Post
    According to his website, PRPFX went from around 10 to 50 in 30 years.

    The Dow went from <1000 to over 12,000 now.


    If you're good at picking individual stocks, the more power to ya. Not many are.
    You're right, it does show that. I guess I assumed that Google Finance and others would show "since inception" when I chose the "all" time frame but it just shows since the year 2000. Also Early Warning report started recommending it in 2001. So if we compare apples to apples over last 10 years (for investing $10,000):

    Dow: $11,990
    Nasdaq: $14,087
    S&P 500: $11,108
    Permanent Portfolio : $27,401
    Gold: $51,613
    Silver: $93,457
    Lockheed Martin: $21,232
    Google (since IPO in 2004): $57,079

    Looking at that you may say "OMG I should've invested in gold and silver" and in part, yes. But they're so volatile that a large % would be so, so dangerous. Permanent Portfolio, for example, still triples your money but is quite stable (just look at it's chart and notice how it did in the 2008 crash). Just some food for thought.

    I put Lockheed Martin on there because of individual stocks and one of Richard Maybury's basic strategies (read the book "The Clipper Ship Strategy") which basically says: if government is going to be this giant, ugly redistribution animal and take from Peter to give to Paul we might as well still do the very best we can with growing our money. So, you invest in the companies that will be growing from government purchases/hot spots. And that's where the geopolitics comes in. Being able to forecast where the government will put its money. And for the last 10 years that has mostly been in the military industrial complex.

  25. #24

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    I prefer energy stocks. Oil is slowly being used less, but their is still high enough demand to keep investing in it for the next 10 years.

  26. #25

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    Gold/Silver are the safest bet. My real fear is another big market crash that will even take metal prices down as people are forced to raise cash. Obviously gold will recover over time, but it's tough to ride out a crash.
    Twitter: B4Liberty@USAB4L
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  27. #26

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    Unless you're MO is long term accumulation - if that is the case, a market wide deflationary crash is a rare opportunity to buy when everything IS ON SALE.

    Bring on the sales, I say.

    Quote Originally Posted by Brian4Liberty View Post
    Gold/Silver are the safest bet. My real fear is another big market crash that will even take metal prices down as people are forced to raise cash. Obviously gold will recover over time, but it's tough to ride out a crash.

  28. #27

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    I only have about 2k in a Scottrade account plus about 2k in physical PMs, mostly all silver. With such a small amount, I have to take risks to make big gains, so I am currently in one silver/copper miner (RVM which I recommend highly) and one gold miner. I've been sticking with all commodities related investments and started with only 700 and have even taken out 1k (nearly 300% since the end of 2008). If I had more money, though, I would be following the strategies already discussed in this thread with about a ten percent allocation of PMs or higher depending on your risk tolerance.
    Last edited by JasonC; 07-24-2011 at 03:11 PM.
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  29. #28

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    the best investments are emergency food, seeds, water filters, solar panels and guns
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  30. #29

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    Quote Originally Posted by Seraphim View Post
    Unless you're MO is long term accumulation - if that is the case, a market wide deflationary crash is a rare opportunity to buy when everything IS ON SALE.

    Bring on the sales, I say.
    Absolutely a buying opportunity. But you have to have the cash, and you can't be fully invested when that crash happens.
    Twitter: B4Liberty@USAB4L
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Corporate-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul


    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

  31. #30

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    Thanks to everyone for their input, very interesting perspectives to learn from.

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