Investing - precious metals

[Daeyel]

I have about 1K kicking around in the bank. I hate banks. Does anyone have any advice on investing in precious metals?

This would not be through an internet or investment account. This would likely be in physical bullion in my possession. Or should I go with an account for disposability purposes?

Since Silver is down to the lowest levels I've seen in a couple years ($28 an ounce) I'm debating buying a pound or 2, thinking the Greek collapse and possible civil war (as warned by former Greek minister) will send it to $40 or beyond by years end.

Anyone who can tell me if this is a realistic expectation?

[Jesse 8]

I am also very interested in this subject matter. Looking forward to the responses and advice here.

Shot placement is King, penetration is Queen, but a wide wound channel is the Ace in the hole.

[Wolfman]

Metals are at an all-time high. Usually, you buy low, sell high, not the other way around.

The "dot com" bust and the real estate bust were both caused by one thing: People overvaluing assets that did not have sufficient capital or collateral. In other words, they paid too much for something that wasn't worth it, just because of the hype and hysteria. What's going on with gold right now is quite similar. Just like dot-com stocks dropped and real estate dropped, sooner or later, gold is going to drop as well.

Now, that doesn't mean that you can't make money on it. If it keeps going up, you can. But considering that the crazy climb of gold seems like it may have somewhat plateaued... you could also lose your shorts on it. If you do buy some, set some good guidelines ahead of time that will dictate when you will get out of it.

[Luv10mm]

I think it depends a bit on how you are looking at it. In terms of straight return, historically precious metals haven't returned as much as say the stock market. Only recently have values jumped significantly and there's no guarantee that will continue. They do seem a bit less risky than stocks. And I agree with Wolfman that buying high with no real indication of it going a lot higher means the rate of return is pretty sketchy.

If you are looking at it as an apocalypse scenario where regular currency is worthless and goods/materials have more value, than it could be a good investment too.

Do I ever think gold/silver values will tank? Probably not, but I wouldn't expect the current increases to continue at such a high rate.

[leonidas]

You should ask yourself why you want to buy precious metals.
People tend to buy Gold and Silver because they believe inflation is coming or will be a serious concern in the future. Let me explain my definition of inflation with regards to gold and silver: inflation = devaluing of the local currency and in our case, the U.S. dollar.

If you believe the value of the $ is going down as it relates to goods and services, then gold and silver are great investments. Nevermind the bubble concept as any commodity will rise and fall.

The second question you should ask yourself is "why do I want to take the money out of the bank?"

If you think there will be a bank holiday or bank run and you want liquidity, then take the money out and put it in a fireproof safe in your home. You won't be missing out on any interest as the banks currently pay nada for money in the bank.

If you truly want to invest it, but are unsure if there will be price inflation or deflation or market manipulation, then I'd suggest buying a good firearm, with plenty of accessories and bullets. Buy it nice, maybe new, and keep it as a future sell if need be.

Unlike gold or silver, you can use the firearm. If Obama is re-elected then prices are sure to climb in the near future. If Romney is elected, the prices may not jump as quickly, but the mess we are in isn't going to change with your standard run-of-the-mill politician.

[Cinhil]

Not only do I collect coins and silver bullion, I also work through a great financial adviser and have been able to earn very good returns through his company over the past few years. Investments in stocks are risky without a good adviser. I also have diversified my portfolio and and have several baskets where I have invested. Some of those investments are in and IRA and other personalized retirement accounts which carry minimal risk and guaranteed minimum pay out based on your investment. If you would like more info you could pm me and I will give more details. And yes, you do not make money anymore by keeping it in a bank, you used to be able to but the days of 6 1/4% interest and higher have been over for nearly 15 years. There are much better options out there and many of them offer decent fluidity.

[Kevin Jensen]

I have several hundred pounds of precious metal.

Lead.

[jktseug]

As others have stated, it is really what you want to do with it and why you are looking at precious metals. As a long term storage for monetary value it works well (unless someone is ever able to turn lead into gold). Silver is a precious metal used in a lot of things from electrical, medical, and jewelry. Gold is rare and precious, used in some thing but not as much as silver.
Utah has passed a law that a gold/silver coin is recognized as currency and also is exempt from state sales tax.
If you are doing it to make money, you might get lucky, or it might even out or fall. If you are doing it because you are afraid of banks, cash can work if stored, but in a safe i would trust the metal might melt but still have value while cash might just burn depending on the temps and what safe you have.
If there is an EOTW event, I vote for guns and ammunition. Gold can be traded/bartered but a good weapon for self defense and hunting could be invaluable and if it is such a great comoddity, barter/traded.

just my 2 cents.

[Daeyel]

When I say silver is at a low price, I am indicating that it has been in the 30's for quite a while. Silver was 27.90 this morning, closed at 27.19. I'm going to watch it for a while.

If you play the bounce with an online account, you can begin grow over time.

As for EOTW scenario, I consider gold/silver/precious metals to be a very poor investment. Wheat, rice and oats in 55 gallon drums would be the best barter material. People got to eat. You can't eat gold, silver or even lead.

[jktseug]

When I say silver is at a low price, I am indicating that it has been in the 30's for quite a while. Silver was 27.90 this morning, closed at 27.19. I'm going to watch it for a while.

If you play the bounce with an online account, you can begin grow over time.

As for EOTW scenario, I consider gold/silver/precious metals to be a very poor investment. Wheat, rice and oats in 55 gallon drums would be the best barter material. People got to eat. You can't eat gold, silver or even lead.

You are right about silver, it hasn't been much below $29/oz for a while. But when I was buying it was $14-$17.

As for eating lead, doesn't do much good to have wheat, rice or oats if someone with the lead comes and takes it from you. And if you are in excess of wheat/rice/etc then it is good to barter with, but if you are low your trading/bartering a necessity.
OTOH rice keeps for a long time and you can rotate it into everyday use if you need easier than silver/gold/any other thing.

Good luck in deciding what to do with the extra$$

[Kevin Jensen]

Ok, serious question now...

Besides this $1000, do you have a $1000 "emergency fund"?

I am a firm believer in Dave Ramsey's Total Money Makeover, and the above is baby step 1.

[manithree]

Ok, serious question now...

Besides this $1000, do you have a $1000 "emergency fund"?

I am a firm believer in Dave Ramsey's Total Money Makeover, and the above is baby step 1.

+1to that. If you really apply what Dave says, you'll win.

[Jesse 8]

Where can I find the rest of the baby steps?

Shot placement is King, penetration is Queen, but a wide wound channel is the Ace in the hole.

[Kevin Jensen]

Where can I find the rest of the baby steps?l

http://www.daveramsey.com/new/baby-steps/

[NormanXDm]

I have several hundred pounds of precious metal.

Lead.

Mine is mixed in with some copper...