beard@unc.UUCP (David Beard) (08/23/85)
Given the possibility of another recession in future, the idea of investing in gold comes to mind. I have always dealt with stocks et al. in the past and know next to nothing about gold as an investment. I have the following questions: 1) Is this a good time to buy gold? (or is any time a good time for that matter?) 2) Coins, bars, stock, funds, etc.? 3) Should I take delivery? 4) From whom should I buy - mail-order houses, coin dealers, brokers, etc.? 5) etc. (Please insert any question(s) which I should be asking.) It is possible that this discussion has previously been dealt with on the net. If so, could someone mail me the canonical set of responses? That way, the rest of you won't have to deal with the subject again. Thanks in advance - dvb
dave@cylixd.UUCP (Dave Kirby) (08/26/85)
In article <214@unc.unc.UUCP> beard@unc.UUCP (David Beard) writes: > >Given the possibility of another recession in future, the idea of >investing in gold comes to mind. I have always dealt with stocks et >al. in the past and know next to nothing about gold as an >investment. > I am not a gold expert, but I have read some on the subject and can offer some humble insights gleaned from recent articles I have read. > 1) Is this a good time to buy gold? Depends on what you're after. If you're trying to make a killing in gold, then the answer is subject to timing considerations (from what I've read from technical analysts, if gold breaks out sharply above $360/oz, then that is the signal to buy). If you are accumulating gold primarily for protection of your wealth in an economic emergency (such as a severe depression, severe inflation, or the coming recall of the currency which is supposed to occur sometime early next year), then any time before the emergency is a good time to buy. From what I've read recently, silver is supposed to be a much better investment now than gold. This is because gold historically has been about 40 times the price of silver, and currently it is selling for over 50 times the price of silver. Thus, the reasoning goes, gold is currently overpriced in comparison to silver (or maybe silver is underpriced?); over time, the ratio is expected to adjust back to the historic 40-to-1. So if gold rises, silver should rise also, but faster. > 2) Coins, bars, stock, funds, etc.? Again, depends on what your investment objectives are. Those after making a killing should buy gold options or options on gold mining stocks. These have the most risk and by far the most leverage. The more conservative killing-makers should invest in gold stocks. Funds are risky because the gold funds haven't done very well recently as a group; also, they will tend to lag the market if gold rises, because most of them will not have their money fully invested in gold until the upmove is well underway. Those who want gold as a hedge against the unthinkable should buy gold bullion coins, preferably minted by a well-known government. These are preferable to bars because they are recognized world-wide as genuine and therefore don't need re-assaying before you can sell them. The most popular bullion coin currently is the Canadian Maple Leaf. (Bars minted by a reputable private mint may not need re-assaying either, depending on whom you are trying to sell them to.) For silver coins, buy "junk silver" coins. (These are U.S. dimes, quarters, halves, and silver dollars minted before 1965 which are not in good enough condition to have numismatic value; they sell for their silver content alone. I once bought several silver dollars minted from 1890 to 1925; they were in excellent condition, except that some idiot had drilled a hole in each of them so they would fit on a keychain. That ruined their value to coin collectors, so I got them for the price of their silver content alone.) Any coin dealer has these junk coins lying around, and is usually glad to get rid of them. Check around before you buy, though; premiums vary widely. > 3) Should I take delivery? If you are just trading to make a killing, don't bother. But if you want to prepare for the worst (you can see the kind of books I've been reading), you ought to take delivery and put them in a safe place where you can get to them at any time. (Note that this eliminates traditional bank safety-deposit boxes. Banks keep limited hours, and are subject to sudden closings during severe economic upheavals.) > 4) From whom should I buy - mail-order houses, > coin dealers, brokers, etc.? Most major cities have local outlets where you can get coins almost as cheap as you could get them from a mail-order place. The extra price is worth it for the savings in postage and time and aggravation. Mail order places are a little cheaper, but you have to be careful which ones you choose. Some mail-order places have turned out to be complete scams. One guide: look at the advertisements in all the doom-sayer magazines and books, and note the names of the dealers that advertise there. Avoid them. Hope this helps. ----------------------------------------------------------------- Dave Kirby "There is no great genius without RCA Cylix Communications some touch of madness." - Seneca Memphis, TN ...!ihnp4!akgub!cylixd!dave (The views expressed herein do not necessarily reflect those of RCA Cylix. They may not even reflect my own.)
brett@ucla-cs.UUCP (09/05/85)
> > Given the possibility of another recession in future, the idea of > investing in gold comes to mind. I have always dealt with stocks et > al. in the past and know next to nothing about gold as an > investment. > > I have the following questions: > 1) Is this a good time to buy gold? > (or is any time a good time for that matter?) For the short term the answer is no. Because of uncertainties in South Africa, there may be some instability in the Rand. Large debts are due to be renewed on December 31st. If those loans were not renewed, economoic chaos would ocurr in that country. Since the nation owns 60% of the supply of gold, if my facts are correct, one way to back the Rand is to back the Rand with gold. 1 This would have a short term bearish effect on the price of gold. 1 This information from the Nightly Business Report 9/4/85. -- Brett Fleisch University of California Los Angeles LOCUS Research Group 3804-f Boelter Hall Los Angeles, CA 90024 Phone: (213) 825-2756, (213) 474-5317 brett@LOCUS.UCLA.EDU {...sdcrdcf, ihnp4, trwspp, ucbvax}!ucla-cs!brett -------------------------------------------------------------------------