Why Should I Invest In Precious Metals?

I will let others chime in on the reasons for/against investing in precious metals, but I'll have to point that you most certainly will not earn $630 on an 18 month CD that is earning 0.35% annually. If the interest rate stays at that rate for the duration, you are looking at a gain of $50.

That same $10,000 in gold, which would buy you more than 5 ounces, would have to increase less than $10 an ounce over 18 months to net the same gain.

You need to recalculate your interest earned. I believe you used 3.5% instead of 0.35%. If you have $10000 at 0.35% you would only earn about $35 per year (simple interest but that ok for this little amount). Now if you believe interest rates are going up, it becomes harder to hold PM's.

I had 1 000 000 yen, about $13K ... couple of months ago Japan started to print big ... now I have the same 1 000 000 yen, but $12K ... lost $1k

what CD should I find? ))) <rhetoric question>

When I ever put any of my money to work, the first thing I ask myself is- what is my risk.

So, going with CD's is going to give you less risk. Sure, its going to be paltry on returns but you;ll have your original investment.

If you buy PMs, you should understand that they are a volatile commodity. Sure they have had impressive returns. But you could also buy them and find the value of your gold purchase or silver, go in the toilet or move higher. Are you prepared for that?

So if you buy gold and silver, what is your reason? Well I agree with the other member who said you do it to diversify and nothing more. I also want to note that PMs should NOT be purchased ONLY because they are the ultimate safe haven, that's not really proper and the markets have shown to disconnect from that. Rather gold is now considered as another alternate currency, especially in a global economy where many central banks in asia, europe and here are weaking them.


I also should think that tax implications would be something to consider when you purchase gold and silver. They do fall under a higher tax rate UNLESS you can access the futures market or use vehicle such as an exchange traded note or commodity ETF that relies on futures contracts to lower your tax costs.

I'll skip the dollar conversation. Long story short- the US dollar will always remain the worlds safe haven currency no matter how much they print it up. (BTW, no I am not taking political sides I am speaking purely from a financial stand point from what I see every day at work.) IF the dollar goes kaput, so does the entire world and no one will be buying your nor anyone's silver and gold, so its in your best interests that the dollar doesn't collapse.

So in the end, are you ready to take on the risk with owning PMs? If you can then you should purchase a small percentage and see how it goes. Remember the risk, not the "how much am I going to make".


Bekiz- yes the yen is getting smacked around, its a shame you couldn't hedge that.

Xavier has a good idea with a high yielding stock. I certainly wouldn't buy tho, one that is making yearly lows with a high dividend because its highly probable that high dividend gets cut and then that stock will tank even further which it already is at 52 lows, which is setting the trend.

Ok so when does it financially make no sense to continue putting money in the bank?

Possibly once you reach the limit in which the FDIC ensures your money it wouldn't make much sense to continue putting money into your bank account. Put couldn't you just put money in a separate account with a different bank?

many invest in PMs as a store of value of their money. PMs always have a value, at least through the past few thousand years. They have some protection against inflation. Our fiat money is just backed by the faith and trust of the US! You know where that seems to be heading.

Very often, companies that are at 52-week lows are there for a reason... they deserve to be! Also, any company paying a 12% dividend is likely doing so because they have to. Otherwise, they would be borrowing money from a local bank at 3-4% rather than paying 3-4 times that amount in dividends. One should also ask what the financial state of such a company is. Do they have a lot of debt? Have they been sued recently or have other substantial financial obligations? Do the company officers own a lot of the stock? If so, have they been buying or selling shares? What did they pay in taxes last year? If their earnings and tax statements do not match up, look out, as they may be playing some fast and loose accounting games. There is much due diligence that needs to be done BEFORE risking your money on a stock. It's quite a lot of work, actually, but it can pay off pretty well.

As to the OP's question, yes, he should buy some PMs but only after he has other financial matters in hand, such as an emergency fund created, bills paid off, a 401k or IRA started, etc.