is Silver a good investment right now?

[Zippyjuan]

Can’t imagine silver has much downside at this point. Buy low, sell high, so they say.

Could always do "dollar cost averaging"- buying a fixed dollar amount at regular intervals- say $100 a month. If the price is low, you end up buying more. If the price is high, you buy less. Nobody can predict what the market will do.

 

[EBounding]

No, because that produces something if it is cashflowing.

PMs don't produce anything nor do they cashflow, they just sit there.

You can speculate on land if you buy it, hold it, and then wait for the price to go up before reselling it. But if you buy it and then turn around and rent it out that is no longer speculation, it is an investment. See the difference?

Here's a good article from a valuation expert who tries to value gold. The TL : DR

https://aswathdamodaran.blogspot.com/2013/04/the-golden-rule-thoughts-on-gold-as.html

As a complete novice in assessing the value of gold, here is how I see its value. As a stand-alone investment, I would not buy gold, given its history (of delivering low returns in the long term) and given how it is priced today. As insurance, though, I think it makes sense to add to your portfolio, even at today's prices. You don't have to be a conspiracy theorist or paranoid about central banks to have legitimate fears that prices in financial markets, built upon uncommonly low interest rates, may collapse. I know that the price of gold as insurance is higher than it has been in the past, but the risks that you are insuring against are also much higher than they have been historically.

 

[oyarde]

Could always do "dollar cost averaging"- buying a fixed dollar amount at regular intervals- say $100 a month. If the price is low, you end up buying more. If the price is high, you buy less. Nobody can predict what the market will do.

Pretty much what I always did when I was younger with the exception that I picked a couple high points to stop at , say 27.00 and 1550.00 . At that point I only bought things with a certain percentage of numismatic value in say , raw MS60 .

 

[Matt Collins]

Oh I agree everyone should have some bullion in a safe place for a SHTF scenario.... along with some food and tradeable goods, etc. It's just smart. But none of that is an investment.

 

[Warlord]

Oh I agree everyone should have some bullion in a safe place for a SHTF scenario.... along with some food and tradeable goods, etc. It's just smart. But none of that is an investment.

I bet you wish you were Ron Paul who 'invested ' in gold at $140 an ounce in the 1970's.

 

[Matt Collins]

I bet you wish you were Ron Paul who 'invested ' in gold at $140 an ounce in the 1970's.

Actually from my understanding he invested in gold mines.

 

[Zippyjuan]

Actually from my understanding he invested in gold mines.

Ron Paul's holdings (64% in metal stocks- mostly miners) from 2011:

https://www.economicpolicyjournal.com/2011/06/ron-pauls-stock-portfolio.html

Agnico Eagle Mines
Allied Nevada Gold Corp.
Alumina Common
Anglo Gold Ashanti Ltd.
BrigusGold Corp. Com MPV (formerly Apollo Gold Corp)
Barrick Gold Corp.
Claude Research Inc
Coeur D'Alene Mines Corp.
Dundee Bancorp
First National Bank of Lake Jackson
Gold Corp Inc
Hecla Mining Co.
El Dorado Gold Corp.
IAM Gold Corp.
Kinross
Lexam Explorations Inc.
Mag Silver Corp.
Metalline Mining Co.
Mutual Securities Inc.
Newmont Mining Corp.
Pan American Silver
Petrol Oil and Gas
Prudent Bear Mutual Fund
Rydex Dynamic Venture
Rydex-Ursa Mutual Fund
Silver Wheaton Corp
Texas Dow Employees Credit Union
Texas Gulf Bank
Virginia Mines Inc.
Vista Gold Corp.
Viterra Inc
Wesdome Gold Mines Ltd.

 

[Zippyjuan]

I bet you wish you were Ron Paul who 'invested ' in gold at $140 an ounce in the 1970's.

Let's look from the time he was first elected to Congress in 1976. In November of that year (when the election would have taken place) gold was $600 an ounce. As of this moment, it is worth just under $1500 an ounce- a 40% gain in 43 years. There weren't any mining stock indexes back then so I can't really trace how well those have done since then. Gold price link: https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart

What about stocks? Let's us a broad index- the S&P 500. In November, 1976, it was 100. Today, it is 3,133- an increase of 3,100%. https://finance.yahoo.com/quote/^GSPC?p=^GSPC

Metals don't pay any dividends which could be re-invested like stocks do so the return on stocks would be even higher if those were included.

 

[Brian4Liberty]

Precious metals are speculation, not investment.

It’s a commodity, a raw material, and an asset. It can be speculated on. It can be used to produce other products.

What Is an Investment?

An investment is an asset or item acquired with the goal of generating income or appreciation. In an economic sense, an investment is the purchase of goods that are not consumed today but are used in the future to create wealth. In finance, an investment is a monetary asset purchased with the idea that the asset will provide income in the future or will later be sold at a higher price for a profit.
...
Investments and Speculation

Speculation is a separate activity from making an investment. Investing involves the purchase of assets with the intent of holding them for the long term, while speculation involves attempting to capitalize on market inefficiencies for short-term profit. Ownership is generally not a goal of speculators, while investors often look to build the number of assets in their portfolios over time.

Although speculators are often making informed decisions, speculation cannot usually be categorized as traditional investing. Speculation is generally considered higher risk than traditional investing, though this can vary depending on the type of investment involved. Some consider speculation more akin to gambling than anything else.
...
https://www.investopedia.com/terms/i/investment.asp

A day trader is a speculator. A currency trader is a speculator.

An investment that has returns in addition to it’s asset value is good. An investment that actually grows is good. Commodities don’t do that. Their value will just go up or down.

And the price (not necessarily value) of everything will rise in comparison to a fiat currency that is being hyper-inflated.

 

[RonZeplin]

Fiat currency and stocks etc. can become worthless, PM's will always have a good value.

 

[Matt Collins]

Fiat currency and stocks etc. can become worthless, PM's will always have a good value.

Yes and no.

Yes fiat currency can drop to nothing. Single stocks and sectors can too, although ALL stocks becoming worthless is highly unlikely unless there is some sort of global SHTF scenario (highly unlikely). But at that point we aren't talking about investing, we are talking about survival. And as I wrote above, it is always a good idea to physically possesses some PM for trading in case of a SHTF scenario (along with other items which can be bartered).


However the idea that PMs will always have a "good" value is also untrue. Both gold and silver have fluctuated wildly in the last 100 years. Look at silver now compared to 2012 for instance.

 

[Warlord]

Some of us prefer to invest in something we can touch Matt. Stocks can go belly up and your account margin called or whatever, then what are you going to do Collins?

 

[Matt Collins]

. Stocks can go belly up and your account margin called or whatever

LOL this makes zero sense

 

[Zippyjuan]

Some of us prefer to invest in something we can touch Matt. Stocks can go belly up and your account margin called or whatever, then what are you going to do Collins?

If you are borrowing money to buy stocks (never recommended) you could in theory face a margin call. If you aren't borrowing, you are not subject to a margin call.

https://www.thestreet.com/investing/what-is-a-margin-call-15062755

One bit of risk that is common in investing is the use of a margin account - this is when the brokerage you open an account with gives you a loan to use for investments. Trading on margin gives you more capital to invest with, but it also makes you run the risk of a margin call.

A margin call has the potential to be catastrophic for investors, turning a poor investment choice into a much bigger issue. What is a margin call, what happens if you are unable to pay it and what should you do to avoid it?

What Is a Margin Call?

A margin call is what occurs when an investment incurs enough losses that the investor's margin account goes below a certain amount, known as the maintenance margin. When a margin call happens, the brokerage will demand add funds or securities to the margin account to get back over the maintenance margin.

 

[Zippyjuan]

Fiat currency and stocks etc. can become worthless, PM's will always have a good value.

Have there been any metal backed currencies which never became worthless?

 

[pmbug]

Have there been any metal backed currencies which never became worthless?

That's a bit disingenuous. Currencies based upon PMs have become worthless, mostly because the currencies were debased (lost their full value/backing of the PMs). A disingenuous answer to your question would be yes - the US Dollar. It never became worthless, but the USA couldn't keep debasing it's value with respect to PMs, so they abandoned the gold backing to let the debasement continue.

 

[oyarde]

Some of us prefer to invest in something we can touch Matt. Stocks can go belly up and your account margin called or whatever, then what are you going to do Collins?

My GM stock went to zero , my Seated Liberty silver Halves have not .

 

[oyarde]

One of you should ask Ron Paul what he paid for his first 1908 S Indian Cent and then I'll give you the current value and you can figure the return o that .

 

[Danke]

Yes!