Kreutz wrote:Funny you mention that, I also noticed people always seem to view PMs as...a dollar based investment. Even people who claim to know better.
"The dollar is going to collapse any month now, holy crap, my gold is up to $1475/oz, thats great!"
That's a somewhat valid criticism, but comparing it to other assets is natural. Dow in Gold (DiG), gold/silver ratio, gold/silver in dollars, etc. Unfortunately, the IRS encourages this type of thinking because of income and capital gain taxes. It's just a comparison human beings do all the time, but like I noted, if that is your primary way of viewing your investment of gold/silver, you'll likely loose actual dollars since you won't be able to tolerate the volatility. People do the same thing with stocks too. i.e. their account value went down, thus the "right" thing to do is move into bonds where they won't make any money because the rates are so low. Never mind how much money they will loose when rates rise after the economy recovers...whenever that is (missed opportunity cost as well).
I've bought some at higher prices than today and some at lower prices. It's like buying stocks for retirement, the sound advice is to not pay any attention to the daily move or even mid-term trends. If you believe that long term the asset is a good way to invest for <insert reason>, then just keep buying periodically regardless of the price in dollars.
Kreutz wrote:The fact the gold is likely in an ETF only adds a "wtf" level to it all. Still thinking of their gold as dollars, when it was bought as a hedge against the dollar...puzzling. Its like short selling yourself.
IMHO, EFTs in commodities are like day trading stocks. It's not about the item because there is no intent to hold long term or use it directly. That's what I mean when you want dollars -> PMs -> dollars. The end game is to get more dollars. As a hedge against rainy days, EFTs make no sense IMHO.
Kreutz wrote:This is why I'm not a PM guy. The world (and peoples psychology) are still fixated on dollars.
Like Revolutions, people and governments usually miss the early signs of significant change...and then it happens very quickly. Yes, the world is still fixated on dollars and I expect it to remain so for the near future. However, major dollar holders like the Chinese appear to be making plans for the dollars collapse. Just my two cents.
The right answer is periodic purchasing of diverse investment products. I buy stocks, I buy gold, I buy silver, I buy ammo, I buy firearms, I buy alcohol, I buy food, I buy water, etc., etc. I also save dollars, both on hand and in the bank (especially useful since the world still operates on dollars). I buy these things in paper form as well as physical. Buying periodically, I essentially dollar cost average. Some are up, some are down, but in general I'm always up because that is the long term trend; if the asset you're buying isn't long term up, then your basically trying to time the market/day trade. You can count the number of people on one hand that have successfully timed the market over the long term. Sure, we all have examples where it worked out, but then we also have examples where it didn't. Generally, we don't like talking about our failures.
Would love for all the speculators to bail!