What about gold/silver and platinum bullion-is it going to fall soon and how wise is the buy?

Question

I'd like to put about 20% of my savings into this venture. 50% of the rest is in a 5.65% CD and the balance is in cash. No debts.

Answer 1

i disagree with the previous respondents.

you may possibly make money in mutual funds, but you're basically yielding control of your money to someone whom you have to trust knows better how to invest than you do. and with most stock valuations still sky high relative to income, you'd be better off going for the 5-6% sure thing in the non-CD FDIC-insured deposit accounts some internet and brick-and-mortar banks are offering. (i don't think even a 3-mo CD is worth the time if the spread between that and a current deposit account is currently so small...) i certainly wouldn't risk buying a stock for a dividend way less than 5% when i can get 5% "for free", so to speak...

as for gold/silver/etc. not paying a dividend, this is entirely true, but so what? people buy many other things that produce neither income nor profit until it's sold; "growth" stocks and real estate come to mind. the problem we face at this particular point in history is that the us government is "printing" money faster and faster than you can earn or spend it; to pay for things like the war in iraq, increasing social entitlements and interest payments to foreign creditors. when you increase the money supply so drastically, everything gets more and more expensive and your dollar's value whittles away to its intrinsic value, which is nothing. the us dollar used to be "as good as gold", when it was under the gold standard before 1971.

gold has always been regarded as the ultimate store of value in almost every culture and time. an ounce of gold bought around 300 loaves of bread 2000 years ago, and pretty much still does today. the dollar price of gold may and will indeed fluctuate, and wildly at times, but when you are looking at the intermediate to long term, gold is a good bet, and is still way undervalued at $725+/oz. today. don't try to time the dips; it's worth buying any way it goes. if it does happen to "crash" to $400, let's say, just buy more. the argument that gold has a long way to go lie in china and india ascendant in the 21st century. as they get richer and their currencies strengthen, luxury items including gold will actually become cheaper for them, and they will correspondingly buy more.

as for silver, it comes a close second as a store of value, but it also has other things going for it. silver also has industrial uses and will, if it hasn't already, be in a supply deficit. it's used in electronics, and there may be increased use as a bactericide and water purifier as the world's clean water supply is increasingly stressed (you might also want to invest in clean water suppliers!). and it's still incredibly cheap at $13/oz. i believe that even Warren Buffett still has a huge silver stockpile!

in any case, i would put at least 10% of your money into gold/silver; if you're comfortable with 20%, go for it, and then not even think about it. think of that 10-20% as your "wealth insurance".

if you are considering "paper" investments, then look into foreign issues. maybe open accounts in various foreign currencies. a good mining company stock will take off if/when gold/silver go through the roof.

right now, the "gold people" are still not mainstream, but i think it's important to study what they have to say about the world economy. first on my list is Jim Rogers, who is not so much into gold as he is into commodites, but they are both still tangible things. he says: "buy stuff". second is Peter Schiff "Dr. Doom". he has his own investment company, see below. he says: "invest outside america". also worthwhile: the Sovereign Society, The Daily Reckoning, and The Rude Awakening.

good luck!!!

Answer 2

Lousy idea. Really, really bad. The problem with gold/silver is that it doesn't pay a dividend. So, your money sits there until you decide to sell.

Look at it this way. Let's say you put $400 in an ounce of gold. Until you sell that gold, you don't make any money. You're betting that, in a year, it will go to $440 an ounce, and you'll make 10%. It may, it may not.

Comparatively, let's say you put that same money into Exxon. Whether it goes up or down, it still pays a dividend. You're betting it will go up, but in the meantime, they're sharing the profits with you.

Also, if 50% of your money is in a CD, and inflation runs around 3%, the Rule of 72 (look it up), says that it will take about 27 years to double your money. In the meantime, the average stock market rises about 11% a year. And of course, cash isn't working at all for you, not making interest.

I would start with a mix of stocks and maybe some CD's. Learn about stocks through online sites like www.fool.com. You can go by the rule that the number 100 minus your age is the amount you should have in stocks. So, a 75 year old would have 25% in stocks, but a 25 year old would have 75% in stocks. Keep enough cash to cover two months' worth of expenses, in case you lose your job -- half can be a money market fund and the other half in a 30-day CD, if you can find one.

Answer 3

Very wise to buy precious metals. For more info look at kitco.com articles. I also follow Jim Sinclair at jsmineset.com. Check also following stocks - BHP, FCX, RIG - oil is also good to invest. It won't be going lower, but higher.

Answer 4

Can fall soon, but in long run (compared to CD), it's much more likely to rise, so yes, wise time to buy.

Answer 5

go with good mutual fund with diversification, get good benifit