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 Replies: 25 / Views: 2,888 |
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Pillar of the Community
United States
1450 Posts |
At present,my cash to stocks and bonds to PM ratios I am comfortable with. I have been pondering the question of when and how do I make changes to keep any gains I have made. My question to all of you is this,"If we believe that gold and silver are simply holding their value against a fluctuating dollar,is there ever a need to get out of PM's?"
My thinking has been that I bought gold at $600/oz. when the dollar was much stronger. If,as gold drops(assuming the dollar is strengthening,doesn't it make sense to buy cheap dollars when they begin to,and look like they will continue,to increase in value? or,does it make sense to hold gold and silver since they are holding their value in dollar terms anyway? I have not bought any PM's in the last 6 months and am contemplating a relatively large silver purchase,so I am still bullish on PM's,but I have never been much of a money manipulator so all of this strategy stuff is new to me.
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Pillar of the Community
Canada
1502 Posts |
Very curious as to other member's input as well. I am myself also relatively new to investing in PMs and it is difficult sometimes to wrap me head around the idea that the "value" of of PM and the dollar are not fixed.
The way I've rationalized it so far is:
Strong dollar = Weaker PM => bet on cyclic weakening of dollar by buying PM
Strong PM = Weaker dollar => sell PM as needed to buy what I need, or bet on eventual strengthening of the dollar and sell lots of PM
Don't have a real exit strat. Because owning only either just PM or just dollars means you're flat out tied to it and out of the game
This has worked out very well in the past 2 years for us, in addition to our investing in semi-numismatic PM products. So much so we've raised enough funds to start trying our hands in PM-related stocks, which is a whole other ball game I'm finding
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Pillar of the Community
United States
619 Posts |
My exit strategy is to leave it all to my son, like my dad did. Where I'm going, I won't need it.  Edited by CPC24
02/02/2012 12:41 pm
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Pillar of the Community
 United States
1450 Posts |
CPC,I'm with you on that but I just may need some of it before I make it to the other side.
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Pillar of the Community
United States
3670 Posts |
You form some good trusted relationships here at CCF and buy high quality product, you should not have too much trouble moving it when the time comes in my short experiences....
Edited by Silverhawk74
02/02/2012 5:57 pm
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Pillar of the Community
United States
1450 Posts |
Hawk,I am not worried about where to get rid of PM's,I am worried about WHEN!and what I get in exchange. To sell for dollars(aka FRN's)unless the dollar is on a strong uptrend seems to be a losing proposition. However,if you sell gold high,ie when the dollar is weak and the dollar strengthens from there,you are actually increasing your wealth(purchasing power) over what you got with the gold. I guess my question really should have been is what are some other ways out of PM's that would preserve wealth gain(or maintained purchasing power)?
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Pillar of the Community
United States
3670 Posts |
Yes I see your point now Hock, and that is a tough question. One of those 64,000 dollar answers we are all looking for perhaps....
I am far from the smartest, but if I had the pm total you do, and wanted to consider putting it into something else minus dying dollars of course, two words comes to my mind, BUY LAND.....
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Pillar of the Community
United States
4008 Posts |
Well, Hock, all I can say is that every investor has to confront the asset allocation problem at some point. It's good that you are interested in PMs as part of your holdings. Like a lot of other people, I am interested in that as well but am still on the low end of the range of percentage of my money in PMs. I should have been awake when gold dropped into the $1530 area recently. That was a pretty good buying opportunity. I did add 200 more ounces of silver during the recent price pull-back there, though, so did get something out of the PM price pull-back.
If you want to know when to sell and when to buy, you can pull up a chart of gold and silver prices, print off a copy, and draw a couple of lines between the high points and the low points. Now, draw the best average line between these two lines. Then, pick a number, such as 10% or 15%, and use that as your trigger. If gold prices drop by 15% below their recent average, that's a buy signal. If gold prices rise 15% above their recent average, that's a sell signal. This is a LONG way from perfect but it does give you a starting point. You can refine the numbers to suit your financial situation until it seems best for you. This is not a scientific approach and I have no hard data to support it but if you find any appeal in the logic of it, by all means give it a try. Just remember that there are no guarantees as to how things such as this will work out. There are just too many variables in the investing world for that to be possible.
You can also set aside part of your hoard and say that you are not selling this. These are your permanent holdings that you will keep unless it is needed to resolve a very nasty problem. Calling this a matter of life and death may be a bit too strong but you understand that this is your life emergency hoard.
Also, people sometimes sell their PMs for other reasons... such as to pay off debt, right Hawk? Or to pay for car or home repairs, etc. The best situation for the PM owner is to be in command of when they sell so they can make a decent profit on their PM holdings. We don't want to be in a position where the need for cash forces us to sell when prices are down.
Many people in the personal finance business continue to underestimate the value of having enough cash on hand that people can pay their living expenses plus any unanticipated expenses that might come along. With a good cash reserve, you don't HAVE to sell any of your investments when prices are down... and avoiding that situation will definitely help preserve and grow wealth.
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Pillar of the Community
United States
3670 Posts |
"such as to pay off debt, right Hawk?' Yes sir, he he he lol.... Your last part Ed, is what I just come to terms with. I tie too many dollars up in silver or other items, and then I don't leave myself with enough dollars when I need them. Being able to step-out side ones self, and see the flaws or mistake one makes is a good quality, as to be able to correct them and save ones self more heartache in the future.... Hock I don't know your personal sit, but Ed's 15% plan makes sense, at least a guideline. You don't strike me as being in a "needing money asap" situation, so in the end I would just say be patient, and wait an see how high it may go. As I feel one day many of us (MAINLY ME  , lol) will be looking back on those days and kicking themselves in the backside for not setting on every stinkin gram, lol.... Edited by Silverhawk74
02/02/2012 6:57 pm
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Pillar of the Community
United States
1450 Posts |
I have about a 10 month supply of dehydrated food with a shelf life of 20 years and a freezer and pantry fully stocked. I did a budget of fixed costs per month and added 10% cushion and based on that number I have about 11 months of cash laid back. I have several weapons with "some"(though not enough yet)ammo. Above that,I have my PM's and an amount equal to my PM's in stocks and bonds. All this with NO DEBT and a paid for house. My wife is on ss disability and I am collecting a state pension. I really don't know how much more I can prepare for. I am reading and studying as much as I can about economics and investment. I have life and health insurance and insurance on my cars and property. I can still afford about 10 ounces of silver a month so I know I should feel pretty good but the future just looks ominous to me and I want to cover as many bases as I can.
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Pillar of the Community
Canada
1723 Posts |
Im fairly new at the PM thing, but since I've began...it's always been buy and hold. I always have a price point in mind that I said I would sell at but then there is always that thought in the back of you mind,"what if the price never goes back down?" Similar to gold back in the day. It started taking off and people sold taking profits and now they have no PM and can't buy in at a lower price. At that point when it just takes off...there is going to be a particular point where you cant afford to get back in the game. I have a set of silver maples, 24 of 26 coins are fully mint sealed still, that I had put together. I started the set for investment only and just fell in love with the coins and the thought of owning something complete. Now I have to buy more for investment purposes because I dont think I could sell this set. Most likley will leave it to my daughter down the road. I think there is a sence of urgency with it as well because I think that the price will continue to go up for some time and the longer I wait the more expensive it gets. I just hope for silver, as an investment avenue, will be more recognized as an asset rather than just a metal by more people now that all this economy and fiat problems have been brought to the average "JOE" attention, which would be great for the over all value of silver. Just my thoughts. So after all that...hockingzig
I wouldnt sell unless you had too or you hit that sweet price that you want. CHEERS!
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Pillar of the Community
United States
3670 Posts |
Hock, you an Mk are set, as are many members here in the ol SHTF situation.... If anything ever does go down, can I pitch a tent out on the backside of the smallest corner of any of your all's property? Perhaps on the back corner section of marsh like waste land down by the swamp, lol. I will do what ever chores that need to be done, to earn my keep, killin zombies, whatever rof  ..... |
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Valued Member
United States
306 Posts |
Holding and piling for the long haul....regardless of what prices do in the next 50 years.
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Bedrock of the Community
Australia
21788 Posts |
I have had professional advice (decades ago) that around 5% of your investments should held in PM's or coins, especially if the investor has a personal interest. He also told me that if I had a high level interest, I would not need the services of a professional to manage that 5% of my investments.
He acknowledged that he was not going to make any fees out of me in that regard.
According to this rule of thumb, if you have a total of $100,000 in all sorts of investments, around $5,000 realisable (not book value), of that should be in PM's or coins.
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Valued Member
United States
264 Posts |
Hobbyist here and as such my exit strategy depends on what else could I invest in that could also give me a sense of security in tough economic times?
German Shepherd + 50lb of dog food = 50 ounces of bullion?
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Pillar of the Community
Japan
666 Posts |
I'm buying and holding PMs for my children. PMs might go down, and I will add as I did for last 2 years (actually I started 2 years ago and since then). My children might need the PMs in their early 20s (my estimates). By this time - no exit strategies for PMs.
Why? Because I consider it as not an investment ... its a storage of wealth. And I am the first in generations of my family who has got an opportunity to start doing it.
So other than thinking about exit strategy, keep some cash in hands ... just in case.
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Replies: 25 / Views: 2,888 |
Posted 02/02/2012 12:39 pm
