Where can I buy gold to protect myself against inflation? I mean I am looking to buy gold in small quantity each year and keep them as future investment. I have people talking about physical gold coins and some talking about gold certificates. Any one who has eny experience please educate me. Thanks
Message edited by: desitoyota on 2009-09-07 10:26:58 CDT
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There are many perspectives on buying gold in these here forums.
There are a few reasons why people buy gold: 1) Hobby 2) Hedge against inflation 3) Hedge against the end of the world
Here's the general evaluation of each reason: 1) Hobby - Buying gold is fine as a hobby. You can be an amateur collector of sorts. Years down the road you might just have a collection worth something. Gold will probably hold value better than beanie babies.
2) Hedge against inflation - Gold is a so-so hedge against inflation. Gold is hard to predict and is not entirely trustworthy. There are better hedges against inflation such as having a big mortgage or TIPS.
3) Hedge against the end of the world - In the case that our economy collapses and paper currency is worthless, Gold is only a so-so investment. You'd be better off with commodities that people need. Some people recommend buying guns & ammo.
Have fun!
Message edited by: catanpirate on 2009-09-07 10:50:53 CDT
PMonkeyDishwasher said:Go to your local pawn shop, ask to see all their gold, and say "I'll take it!" Gold never goes down in value. Ever. Like houses.
I think its a good idea to borrow money to buy gold since it can't go down in value. Ever.
If you want to protect yourself against inflation then buy instruments designed to do so (TIPS, I-Bonds, etc). Why do you want to invest in arbitrary industrial metal?
desitoyota said:How will TIPS protect you in long run when govt. deficit in Trillions. I thought you asked about protection from inflation not from government deficits.
lampy2k4 said:desitoyota said:How will TIPS protect you in long run when govt. deficit in Trillions. I thought you asked about protection from inflation not from government deficits.Aren't they they eventually the same thing?
You can buy "paper gold" through an ETF such as GLD. I'm more of a fan of CEF, however, which includes both gold and silver, and which I'm more confident actually has all the gold in their physical possession that they claim they have.
HKnight said:You can buy "paper gold" through an ETF such as GLD. I'm more of a fan of CEF, however, which includes both gold and silver, and which I'm more confident actually has all the gold in their physical possession that they claim they have.The problem with GLD (along with most other hard asset ETFs) is two fold: 1. Counter-party risk - even if the price of gold shoots through the roof, you still may not get your just rewards. 2. By purchasing the ETF, you do not contribute to reducing the supply of the actual metal - so collectively the purchasers of ETFs to not get the benefit of their contribution to the assets scarcity. This is because the fund can contain "equivalents" designed to mirror the price, but not the actual metals implied.
Disclosure: My 410k is 90% gold ETFs at this time.
delzy said:Disclosure: My 410k is 90% gold ETFs at this time.All joking aside, now may be a good time to trade out of gold. GLD is nearing an all-time high.
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