Owning Gold
Mover Mike
has an excellent post regarding investing in tangible metal, specifically Gold.
How Do I Own Gold?
I have had some emails about my Gold rants that say in essence, "OK, you have scared me, now what do I do?" I will tell you what I do. I buy a little insurance as often as I can. I walk in with cash to Affordable Jewelry & Precious Metals Inc. in Portland, Oregon and buy American Eagle gold coins. I don't care if you use this company. I don't make a thing if you do. You can buy a 1 oz coin, 1/2 oz coin, 1/4 oz coin or a 1/10 gold coin. Todays closing price was $447.00 at $460.00. The closing cash price of Gold was $438.80. If you bought a gold coin this afternoon you would have paid $460. The difference between $438.8 and $460 ($21.20 or 4.61%) is the commission to the coin dealer.
This first paragraph was about the mechanics of buying it, later on, he talks about the reasons and gives some good advice:
Owning Gold Coins is not for speculation, this is insurance! I would guess that most financial planners would recommend 5% of ones investible assets to be in Gold. I believe gold will sell between $1500 to $5000 per ounce. I believe the DJIA and Gold will trade at the same level. I don't know when and I don't know what the US will look like. I expect prices of everything to be up 3 to 10 times in dollars. The ATM's may be shut down and the only money you have is your gold. This is insurance only.
Emphasis mine. Considering that savings accounts and CD's only offer a few percent, it makes sense to have something stable to counter any risk in other investments. I have an IRA that is doing OK but it could crash to earth at any time. Having some cold hard cash in coin is always a good idea.
And Mover Mike's creds? He is a retired stock broker with BS Degree in Political Science and Economics.
Posted by DaveH at March 17, 2005 10:47 PM