Quote:
Originally Posted by ElDiabloJoe
I got a cousin with a beachfront SoCal house and sold his business for $50M, so you'd hope he'd know a bit about money.
He was always encouraging me to buy gold and stash it in the Ol' Gun Safe. Of course, let's say gold is $1000/ounce (hypothetical), and I go to the local "Gold R Us" store in Newport Beach. I want 5 Krugerrands at $1000 each.
Wellllll, you'd think that's $5000, but add in the average fee of 4% and I'm at $5200. Then when I go to sell back my $5000 in gold that really cost me $5200, I have to pay a commission fee of 5%.
So I'm selling $5200 of "investment" and only getting back $4,750. So, unless gold went up substantially, I'm eating $450 of lost cost associated with my $5K in gold coins.
No thanks.
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You sold too soon. If you're looking at gold as an investment, you probably should be buying high-end gold coins. Bulk gold and silver is more like investment insurance. It's a hedge against inflation and if the world goes to hell in a hand basket, gold and silver will still be a viable exchange medium. Many financial gurus advocate 5 - 10% in precious metals as the foundation to any portfolio.
But even bulk gold has been a decent investment and in a long-term uptrend. In 1970, gold was priced at $35.96 per troy ounce. With your $5,000, you could have bought about 139 ounces. Today, gold is valued at $3,373.21 per ounce, meaning your $5,000 investment would be worth approximately $469,000! Gold has significantly outpaced inflation over the decades.