Investing In Gold And Silver

Haven't listened to this in particular one but I know Dave doesn't support this type of investment. I would say this...Dave is excellent at getting you out of debt and planning your budget....that's all I know!

I believe silver and gold should be part of your diversification in your investments. Especially now...you should be buying all the silver you can with how low it is. That's just MHO!

No debt of any kind, but I always ask my dog Toby about the right time to buy PM. He's right about buy/sell as often as the "experts".

Dave Ramsey always thinks gold and silver are bad investments. Even when they are a good investment.

Well they basically always are. There's basically been two pretty short periods in the last 40 years where they weren't just trying to catch a falling knife or flat. If someone didn't buy just before those periods they would have done much better with stocks than waiting 20-30 years for a spike

It's kind of relative though. Yes is you bought in 2009 and sold in 2011 you made money, but there are still countless stocks that would have out performed that buying at the low during the panic sales.

I do agree nothing is ever always true type thing, but from investments unless you can time it perfectly and are willing to get out quick when it spikes it really is not a good investment and certainly not long term

The stocks far out performed the metals over the last decade as they always have. Yes there are losers overall but between the two even the safe play stocks out performed metals. The problems with investing in metals in there is a short window to do so otherwise you are better off investing elsewhere

I kind of look at gold as a form of insurance. It is mostly uncorrelated with most traditional investments and tends to perform well during periods of instability and crises. In the 2000's we had the great financial crisis and the 1970's we had stagflation. Both periods were good for gold. In the times when gold served as money, you were much better off in gold that in government bonds, paper money, and other paper assets especially during military conflicts and financial panics. Insurance is basically the definition of something that does well during a crisis. For example a home insurance policy is at it's most valuable after a home burns down. Otherwise you lose money. That sounds a lot like gold which can do nothing or lose money for decades but spectacular in troubled times.

I think gold and other precious metals can act as store of value but over multi-decade/generational time frames. Less than that, you would probably be better off in TIPS.

So far I have be mostly mentioning gold because of the 4 major precious metals, it seems to be fit the role best as diversifier in a portfolio. Silver, platinum, and palladium have higher industrial uses which can make it much more correlated with stocks and that sort of defeats the purpose of adding them to a stock containing porfolio. Keep in mind that the concept of diversification is based on the idea that if you hold different types of investments and assets which all may move in different directions at different times, you can reduce the risk. The is one of the reasons why it is often recommended that some of you portfolio is put into bonds. Bond prices have over the last 30+ years typically gone up when stocks go down.

I don't have issues if someone wanted to put a small portion of their portfolio into precious metals. It wouldn't be a good idea to have a portfolio full of insurance policies. Personally, I have some gold and less in silver to help balance out an otherwise stock heavy portfolio. Silver and platinum look like better deals based on historical ratios to gold but for the reason above and some others, I have smaller amounts in silver and none in platinum yet. Perhaps that could change in the future.

Cryptos have often been described as the new gold. Perhaps they may replace gold in the future. One issue I have with using cryptos as substitute for gold in a portfolio is their short time in existence. They popped up mostly after the last recession and I just don't know how they will perform in a future crisis. Whereas gold has been around for thousands of years through all sorts of crisis and at least gives me some idea how it might do in a future crisis.