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The Importance Of Physical Assets

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Valued Member
Canada
74 Posts
 Posted 10/22/2021  6:26 pm  Show Profile   Bookmark this reply Add sbr to your friends list Get a Link to this Reply
Just watched the 1 hour show "commodities" on BNN and in Venezuela they actually are using gold as a currency. Apparently a haircut costs an eight of a gram ,lunch for two is a 1/4 of a gram . As well apparently Venezuela was also using gold reserves held in Britain to pay for food (multiple articles on the internet).
Valued Member
Canada
74 Posts
 Posted 11/11/2021  09:07 am  Show Profile   Bookmark this reply Add sbr to your friends list Get a Link to this Reply
Gold is starting to make a move again. Cyclicality is at play here as we head into December (I think). As well my sister who has never ever considered gold was at an investment seminar and they recommended that they buy some physical gold so she is looking at buying . Bought some junior miners to offset some of my tec as that sector seems to be not trading that well right now.
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United States
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 Posted 11/12/2021  08:37 am  Show Profile   Bookmark this reply Add fistfulladirt to your friends list Get a Link to this Reply
Gold's not moving, but the dollar sure is.
When I listen to LED ZEPPELIN...so do my neighbors...
Roll hunting since '77
Dirt fishing since '72
Valued Member
United States
70 Posts
 Posted 11/15/2021  02:08 am  Show Profile   Bookmark this reply Add glenmorenee to your friends list Get a Link to this Reply
Gold has been correcting a little over a year now since it's all time high in August 2020. This rally looks pretty good, a good punch over the 200 day moving average line which has flattened out and just ticked up.
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Canada
526 Posts
 Posted 11/19/2021  7:59 pm  Show Profile   Bookmark this reply Add vonigohcr to your friends list Get a Link to this Reply
Gold is flat or down over the last year, depending on your location (home currency).

https://www.kitco.com/gold_currency...herChatmp=no

In the US, it is essentially flat at -0.4%, Canada it is down 4%, the UK, shade over 2% down. It is up in Europe +4% and up by a lot in Japan at almost 10%. For what it is worth, if you are investing in gold, you would be better off/little gain with a stash of Benjamins under your mattress... Yes it has rallied over the last month but that is on the back of a 5-10% drop over the summer.

You can always cherry pick a time frame where gold does well or poorly. In USD, Gold is flat over the last 12 months, up 53% over the last 5 yrs but only 9% over the last 10 yrs. Not a great candidate for an investment.

The Dow Jones Industrial Average by contrast is up 21% over the last year, 80% over the last 5 yrs and 190% over the last 10 yrs. In real terms, $1,000 invested 10 yrs ago in Gold is worth $1,090 today, same $1,000 in the Dow, $1,900. In addition, most gold dealers have a higher spread (difference between spot and actual price charged/paid) vs. most discount brokers.

Gold, Silver etc are great for hobby but not retirement.

Locally, here in Southwestern BC, we have just experienced a year of pain from natural disasters. Over the summer, we had extreme heat that triggered forest fires that destroyed one small town and threatened many others as well as reduced the air quality for much of our province as well as being blamed for hundreds of heat related deaths. Now as we approach winter, we just had a significant rain event that washed out our land connections to the rest of Canada (4 highways and 2 rail links) as well as flooded one of the most productive farming communities in Canada killing uncounted livestock as well as an unprecedented (for this region) tornado that brought down trees and disrupted power. There are significant concerns in much of this province regarding grocery availability with store shelves empty... this has exacerbated the supply chain challenges that have been growing over the last year. In this context... be it snow & cold in Texas or earthquakes around the ring of fire, hurricanes in the US South East, Volcanoes in Iceland or extreme weather in BC... Personally held Gold & Silver reserves are not the safety net that 2-3 weeks of food & water provide. As I said earlier, I trust our western based economies to survive any medium term threat.
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United States
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 Posted 11/20/2021  01:26 am  Show Profile   Bookmark this reply Add mrpapageorgio to your friends list Get a Link to this Reply
It's why I don't buy standalone gold bullion. I buy gold with a numismatic aspect to it that helps with appreciation, but can always fall back on the bullion value if the numismatic value deteriorates.
Edited by mrpapageorgio
11/20/2021 01:27 am
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United States
2394 Posts
 Posted 11/22/2021  08:20 am  Show Profile   Bookmark this reply Add thq to your friends list Get a Link to this Reply
I follow that numismatic urge too mrpapageorgio. However so are an increasing number of people. I cannot find the lower grade rare coins I used to find with regularity anymore, at least not priced close to bullion. I see them in the higher grades, but those coins are priced for their numismatic value only. People have realized that these coins are an order of magnitude scarcer than Morgan dollars, and within a decade are worth more as bullion than the price originally paid.

Oh for the days when I could find cc half eagles for 50% over melt.....it wasn't over 2 years ago....
"Two minutes ago I would have sold my chances for a tired dime." Fred Astaire
Edited by thq
11/22/2021 08:27 am
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United States
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 Posted 11/28/2021  9:29 pm  Show Profile   Bookmark this reply Add mrpapageorgio to your friends list Get a Link to this Reply
I remember people telling me not too long ago to buy pre-33 gold because the premiums are so low......not anymore. I lucked out grabbing a 1890-CC $20 gold piece when prices were lower. Now it has appreciated quite a bit. Good for the value of my current piece, but not good that I can't get more at a decent price.
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Australia
19252 Posts
 Posted 11/28/2021  11:17 pm  Show Profile   Bookmark this reply Add sel_69l to your friends list Get a Link to this Reply
The house which you own and live in is your most important physical asset. No rent to pay. In the last 13 years, I have not paid nearly $500,000 in 2021 dollar terms.
Over the same period the value has nearly tripled in 2021 dollar terms.

Gold has not matched that sort of performance.
Edited by sel_69l
11/28/2021 11:27 pm
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Canada
526 Posts
 Posted 11/29/2021  5:22 pm  Show Profile   Bookmark this reply Add vonigohcr to your friends list Get a Link to this Reply

Quote:
The house which you own and live in is your most important physical asset


Numismatics in all of its forms (Circulating, NCLT, Bullion) unless it is your primary business, should only be a hobby if you don't want to court financial distress... Over any reasonably long term, both the stock market and real estate markets have out outperformed numismatics and PMs as investments.
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 Posted Yesterday   10:47 am  Show Profile   Bookmark this reply Add NumisEd to your friends list Get a Link to this Reply

Quote:
The house which you own and live in is your most important physical asset. No rent to pay. In the last 13 years, I have not paid nearly $500,000 in 2021 dollar terms.
Over the same period the value has nearly tripled in 2021 dollar terms.


A home is the biggest liability: endless repairs, handing boatloads of money to the housing tax man, etc.
And you don't own your home, the bank does (unless you pay off the mortgage in full).
The best way to "own" a home is to put it into an LLC and rent it back from the LLC. That way, you can at least deduct both repairs AND rent.


Quote:
Over any reasonably long term, both the stock market and real estate markets have out outperformed numismatics and PMs as investments.


That is another fallacy.
Home prices have outperformed Numismatics the last couple of decades mainly because of falling interest rates.
When interest rates are going up, home prices probably underperform equities and collectibles.
For instance, in the period 1940 - 1980 (a period of rising interest rates) home prices went up 16x, while the stock market went up 65x and gold 24x.

https://www.cnbc.com/2017/06/27/how...y-state.html
https://www.officialdata.org/us/sto...endYear=1980
Edited by NumisEd
Yesterday 11:01 am
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 Posted Yesterday   12:04 pm  Show Profile   Bookmark this reply Add jbuck to your friends list Get a Link to this Reply

Quote:
And you don't own your home, the bank does (unless you pay off the mortgage in full).
Sel implied his home has been free and clear for 13 years.

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