School me on buying gold

[cworks]

So I'm 26 and I feel that I am somewhat ahead of my peers in investing for the future. Recently a buddy was talking about investing in gold and how "cool" it would be. I have to admit that having tens of thousands of dollars tied up in something I can't hold or see is somewhat nerve racking. But, it seems like Gold right now is a little risky especially buying over "Spot". Speaking of buying over spot, WHY?? I don't understand that. Anyway can somebody who is well experienced in this subject help me figure out what type of coin, bullion, bar or whatever else there is out there to invest in, if any.

and no i wont hold you responsible if i lose money... some people crack me up

[Pop N Fresh]

School me on buying gold

in one word: don't

everybody is and you missed the big profits. You want to play the metals maybe try junk silver US coins but I recommend stock up on things you use in bulk on sale like primers bullets and powder

Edited March 28, 2012 by Pop N Fresh

[cyburg]

wait till it goes back down in price

[HS101]

Here I thought it was about investing with Montana Gold!

Best thing you can do if you haven't already: Start a Roth IRA.

Next, go to a book store, and pick up several investing books. Look at the book by Phil Town, the Jim Cramer books (more entertaining than educational, but still worth the read), and the book by the guys at The Motley Fool. Learn / research about safe investing strategies, and invest in your future...

[Bsbllrooster]

Pop N Fresh nailed it. Gold is HIGHLY over valued right now and an unproductive asset at that. You missed the boat. It's basic investing, buy undervalued productive assets, not overvalued unproductive ones.

[pjb45]

Gold does not pay interest or dividends. Its value is based on the 'risk' over other fiscal instruments e.g., bonds, stocks, real estate, etc.

When people are concerned about the economy they try and 'hedge' their bets by buying gold thinking its value will increase. You can look at gold's value over the course of 15 years. That should give you an idea of how it can fluctuate in value. Gold is at its all time high. If you think the economy in the world or the USA is going to tank and gold's value will increase than by all means buy more gold.

However, if you think things are going to get better than gold will decrease in value.

Pay close attention to the "buy gold at only 1% over cost" advertisements. Cost = WHAT, the current cost of an ounce, the cost of an ounce when it was purchased by the seller, the cost + administration and overhead?

If you feel like risking your money in investing then learn at least a little bit more about the industry. Remember most brokers make money by getting you to buy something. Brokers can receive incentives by pushing certain stocks, bonds etc. So are you getting the best advice? Who knows?

As rule of thumb, bonds are conservative and low risk hence low interest rates. Some stocks pay dividends and some don't.

At your age look at some aggressive mutual funds or ETF. They may pay off if the economy improves or tank if not.

Right now, IMHO, gold is a sucker investment. Price is at an all time high. The economy is showing signs of improvement, the Fed has kept its interest rate down to encourage investment in industries but Obama's economic policies are counter-productive to growth across all sectors.

Edited March 28, 2012 by pjb45

[cworks]

Thanks for the advice! I already have a Roth and Traditional IRA and invest in the military's TSP. Just thought gold would be something different and exciting. But my question is answered. ...Maybe I can start melting my wife's jewelry though lol

[Fullauto_Shooter]

I'd steer clear of gold for awhile, but recommend you take a look at Silver if/when it dips below $30 an ounce again. You can amass a LOT more physical silver than gold for the same amount of money and from a "collector" stand-point, it's really cool to see the stacks grow in size.

I started buying small amounts of silver when it was about $18 an ounce (a few years ago) and thoroughly enjoy not only the increase in value but also the intrinsic "coolness" of having physical stacks of precious metals.

[Graham Smith]

The others pretty much summed it up. Gold is good to have as a hedge because the value goes up when other stuff goes down (which is where it's at right now). But you don't want to buy when it's up (which is where it's at right no).

If and when it goes down to a reasonable level, I still would not buy gold as such. To buy gold, you have to go to a dealer and they are not going to sell at market price. They sell above market price - which is their profit. When they buy, they buy below market price - which is their profit. IOW, they make money buying and selling and you lose money buying and selling.

If you want to invest in gold, look at a stock with the ticker symbol GLD. This is shares in a Gold Trust - they own the gold, you own shares. As it happens, gold ETF's are going down right now, which indicates people are selling gold. This is in line with what's happening to the price of gold. So, the big advantage to owning a gold ETF is that it is easy to buy and sell without having to go to Vinney's Gold Emporium. Plus you can buy and sell calls on it.

And, FWIW, there are several different ETF's for precious metals. I've held shares of a silver ETF for years and while the price hasn't done anything spectacular, I've made quite a bit of money by selling calls to people who are convinced it's going to skyrocket "any day now".

And, if you have money to invest, put it into an IRA (like the man said) and do your trading there.

Edited March 28, 2012 by Graham Smith

[outerlimits]

Here's why gold as a metal is not a good investment. I'll use a simple example. If in march of 2003 you invested $1k in gold and $1k on apple stock, today you'd have 2.99 oz of gold, worth about $4,977. Oh yea, you'd also have 335 shares of apple stock, worth $206,902. Ask me how I know.

[SLM]

And today if you put $1,235.00 dollars in Apple you'd have two shares. Missed the boat on both.

[-JQ-]

Gold prices always seems like they are too high...that is what I said at $400 oz.

A very good friend guys gold coins and bought tons when it was "cheap" but it is only worth 1600 if he sells it. If able I would still buys some at this high price. It is pretty cool holding a bunch of gold coins. The place he buys from has a minimum of $20K...which isn't really all that many OZ coins But you can buy 1/10 oz gold too.

It has been higher than platinum lately and that doesn't really make sense to me. I think the global metal markets are tougher now than ever to figure out...palladium, etc now making huge profits on scarce availability.

Also don't forget gold is measured in troy oz...thats 31 grams per oz not 28 gr/oz.

kitco.com is a good place to check spot etc...

Good luck!