At this point, stocks better investment or gold?

[cubical]

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.

 

[Danke]

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.

 

[jds8288]

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.

 

[FlatIron]

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.

 

[Brian4Liberty]

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.

 

[Seraphim]

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.

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.

 

[JasonC]

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.

 

[Warrior_of_Freedom]

the best investments are emergency food, seeds, water filters, solar panels and guns

 

[Brian4Liberty]

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.

 

[moderate libertarian]

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

 

[xd9fan]

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

Stocks for growth and productive value.

Peace.

this.
great post!

 

[xd9fan]

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.

Teaser are you a$$-backwards........flip your percentages around.......okay the kool-aid is still being passed around....

 

[Brian4Liberty]

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.

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.

Sales coming right up.

Actually, we probably have a way to go on the downside. Best buying op may be in the October-December range.

 

[helmuth_hubener]

With such a small amount, I have to take risks to make big gains

Uh huh. How did this turn out for you, Jason?

 

[buenijo]

In my opinion, gold or silver should not be considered as an investment. I think it's good as a means for long term savings. One should not purchase gold or silver hoping for significant appreciation of its purchasing power - this is not investing, this is speculating.

My view on stocks is that the stock market is volatile and risky. There are many signs that stocks in general are overvalued. With the very low dividends generally available, then purchasing stocks today could not properly be called investing. If you're purchasing stocks hoping for price appreciation, then this is not investing - it is speculating.

The best investment I suggest today is to learn marketable or otherwise useful skills and/or start your own business.

 

[Seraphim]

The "stock market" is not the same as equity in companies. It's kind of like lumping a bad company in with the rest and saying "capitalism/free markets are bad!!".

Doing a broad investment plan in the DJIA, NYSE, TSX etc. is monumentally different then hand picking a company and investing (buying stock).

Publically traded companies/indexes are so very different than private equity.

If you hold stock in a truly productive company - what the value of fiat does is irrelevent. The USD could burn to ash but if you own private equity in a 200 old Scotch distillery or a farming company with strong fundementals, a broad public stock market crash is irrelevant to you.

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 Bullshit. If you havent learned your lesson from the Fiat Dollar, a Stock in Gold is no different than Fiat Paper Money. Fuck the laws and rules and regultions. When (not if, when) the shit 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.

 

[Seraphim]

Investing is putting money into an asset with the expectation of a return. By it's very nature it is speculative (at least partially).

I agree that gold is more of a long term retainer of value/purshasing power, but it does have investment properties. Silver has even more investment potential/properties.

In my opinion, gold or silver should not be considered as an investment. I think it's good as a means for long term savings. One should not purchase gold or silver hoping for significant appreciation of its purchasing power - this is not investing, this is speculating.

My view on stocks is that the stock market is volatile and risky. There are many signs that stocks in general are overvalued. With the very low dividends generally available, then purchasing stocks today could not properly be called investing. If you're purchasing stocks hoping for price appreciation, then this is not investing - it is speculating.

The best investment I suggest today is to learn marketable or otherwise useful skills and/or start your own business.

 

[helmuth_hubener]

XYZ should not be considered as an investment.
...
ABC could not properly be called investing.

If you're purchasing stocks hoping for price appreciation, then this is not investing - it is speculating.

Investing is putting money into an asset with the expectation of a return. By it's very nature it is speculative (at least partially).

Here is how I define investing and how I distinguish investing from speculating:

Investing is when you accept the rate of return on the market that anyone can get. Any Schmoe. You. Merrill Lynch. Joe. Your cat. Anyone can get this rate of return with no special knowledge nor training.

Speculating is when you try to beat the rate of return available on the market.

That gives the two terms good, solid, non-subjective definitions. Instead of just being fuzzy and subjective. What do you guys think?

 

[buenijo]

Here is how I define investing and how I distinguish investing from speculating:

Investing is when you accept the rate of return on the market that anyone can get. Any Schmoe. You. Merrill Lynch. Joe. Your cat. Anyone can get this rate of return with no special knowledge nor training.

Speculating is when you try to beat the rate of return available on the market.

That gives the two terms good, solid, non-subjective definitions. Instead of just being fuzzy and subjective. What do you guys think?

I thinks it's good, and I appreciate a clear definition. It doesn't matter so much what the definitions are so much as we are all using the same ones. Otherwise, we may as well be trying to communicate in different languages.

When I wrote speculating, I mean specifically speculating on price appreciation. This is what went on during the housing bubble - and generally characterizes all bubbles. A healthy stock market should show a stable price index. Appreciation in a price index is a symptom of currency expansion. I believe purchasing stocks hoping for yields based on price appreciation should be distinguished from the historical practice of yielding a return from dividends. A good argument can be made that "investing" in this environment must be done with price appreciation as a primary goal. However, I then wonder, is genuine investment possible in this environment where capital on net balance is likely being destroyed? That's a tough one.

 

[Seraphim]

You have your definitions mixed up.

An investment is anything you park money into with the expected notion that you will get a real return above the real inflation rate.

You can be a pure speculator parking money in US Treasuries - perceived as the least speculative "investment" one can make.

In fact, these days, most people invested in government bonds of the "strong" governments are classic examples of speculators. The speculation is that both the principal and the paltry 2.4% yield are safe and a sure thing.

ANY expected return on capital is an investment. From there, the degree of speculation has to do with fundamentals and the expected result.

A gold investor from 2008 who thinks by 2020 the gold will be 1250% higher in USD but only 15% higher in purchasing power has little overall speculation relative to general market expectations of return.

Fiat screws things up. Real rates of return are the only things that matter. Since the government and central banks OPENLY target inflation, EVERYTHING is a speculation. Period. End of story. Speculation/investment become synonymous by default and they then become a matter of degree, risk and true outcome.

Here is how I define investing and how I distinguish investing from speculating:

Investing is when you accept the rate of return on the market that anyone can get. Any Schmoe. You. Merrill Lynch. Joe. Your cat. Anyone can get this rate of return with no special knowledge nor training.

Speculating is when you try to beat the rate of return available on the market.

That gives the two terms good, solid, non-subjective definitions. Instead of just being fuzzy and subjective. What do you guys think?