[Pugchief]

Originally Posted by kingofbeer

Ditch the mutual funds for low cost ETF'S.

Because?....

If you're going to make a recommendation like this, you might want to explain your reasoning.

Personally, I have owned index funds in both formats and prefer mutual funds assuming the expense ratios are comparable. And I will explain why: If you need to sell in a volatile market, it is preferable, IMO, to have end of day pricing regardless of volume.

[retiredguy123]

Originally Posted by HappyTraveler

The gold market has been saying otherwise for many years and increasingly so in the last couple years. It seems the market doesn't like the fact that our national debt increases exponentially every year and the interest we pay on that massive mountain of debt is suffocating our national finances.

It all depends on your gold buy price, of course, and the probabilities for the future. A relative bought most of the gold he holds at $1150 p/ounce in 2014. It is now $3350 per. Which is slightly less than a 200% increase. So, he's sitting pretty and will avoid cap gains when he sells (or will pass it on to heirs). I believe it accounts for about 10% of his investment portfolio.

Speaking for myself, I'd be more skittish to buy at the current prices.

The S&P 500 stock index has a cumulative return of 260% for the same time period. Also, how will he avoid capital gains if he sells the gold?

[Pugchief]

As for allocation, I am currently

60% stocks
15% intermediate term treasury bond funds
15% gold
10% cash

Gold has been my best performing asset over the last several years. I had more treasuries, but dumped them last year.

[Arctic Fox]

Originally Posted by Normal

Now we have a trade deal with China brilliantly crafted to our advantage.

Thanks. I needed a good laugh.

[Ecuadog]

Originally Posted by retiredguy123

Thanks, I didn't know that you can make the switch tax free.

... Personally, I don't care that you can trade ETFs hourly, but you can only trade fund shares daily. Some people seem to care about this.

I switched my Vanguard MFs to ETFs because I saw the possibility of my wanting to transfer stuff to another brokerage. The other brokerage charges fees to sell Vanguard MF shares.

[HappyTraveler]

Originally Posted by retiredguy123

The S&P 500 stock index has a cumulative return of 260% for the same time period. Also, how will he avoid capital gains if he sells the gold?

Yes, indeed. I wasn't implying that gold is a better performer than stocks but, it's a different asset class, owned primarily for different reasons, has not been a laggard longer term and, as stated, the market has had much to say about that shiny yellow metal by the increased price.

So, unlike what Alan Greenspan claimed, it is not "a barbarous relic" (an intentional misdirect, if I ever heard one!). Central Banks around the world continue to accumulate that asset.

Cap gains taxes can be avoided because the metal can be privately transacted and very often is. (Btw, most of my investments are in stocks and equity funds or shorter-term income assets and cash.)

[retiredguy123]

Originally Posted by HappyTraveler

Yes, indeed. I wasn't implying that gold is a better performer than stocks but, it's a different asset class, owned primarily for different reasons, has not been a laggard longer term and, as stated, the market has had much to say about that shiny yellow metal by the increased price.

So, unlike what Alan Greenspan claimed, it is not "a barbarous relic" (an intentional misdirect, if I ever heard one!). Central Banks around the world continue to accumulate that asset.

Cap gains taxes can be avoided because the metal can be privately transacted and very often is.

Selling gold to a private party and not paying the tax is not avoiding the capital gains tax. It is "evading" the tax and it is illegal.

[HappyTraveler]

Originally Posted by retiredguy123

Selling gold to a private party and not paying the tax is not avoiding the capital gains tax. It is "evading" the tax and it is illegal.

Okay. Potato, potatoe. The reality is I'm sure plenty of people don't.

It's also very likely that many people pass that asset on to their heirs in which case their cost basis gets marked-to-the-market on the deceased date of death. If they sell soon thereafter, they have little or no cap gains tax to pay.

[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.

[lkagele]

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.

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.

[Pugchief]

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.

There are ways to minimize the spread on buy/sell/spot. It can be done for a lot less than 9%. There are also pesky storage fees if you don't have a gun safe or don't want to risk home storage. I find that the easiest way to avoid all of these detractors is to use a gold ETF. GDLM has an expense ratio of 0.10% and is very liquid. Yes, I am aware of the drawbacks of paper gold vs tangible, but I am of the opinion that if it ever gets that bad, it won't matter.

[DaveZ]

No one can predict what if any a trade deal with China will actually be even should the short term framework announced today become one. Given their history, it’s hard to imagine any trading partner believing they will actually comply with it and especially with the hostile shadow war they are executing against our country. It’s important to consider impact with or without a deal on investing during the remainder of the year. Regarding this thread, do they have leverage to further disrupt our economy as we attempt to refinance enormous debt?

[Normal]

Originally Posted by HappyTraveler

The gold market has been saying otherwise for many years and increasingly so in the last couple years. It seems the market doesn't like the fact that our national debt increases exponentially every year and the interest we pay on that massive mountain of debt is suffocating …..

Gold has increased almost 900 percent since 1970. You would think that was great BUT the S&P has 2,500 percent since 1970. Case closed.

[HappyTraveler]

Originally Posted by Normal

Gold has increased almost 900 percent since 1970. You would think that was great BUT the S&P has 2,500 percent since 1970. Case closed.

Case not closed. You are applying a largely inaccurate and narrow litmus test that does not fit why most people buy it. Research more why they do.

[dewilson58]

Originally Posted by HappyTraveler

Case not closed. You are applying a largely inaccurate and narrow litmus test that does not fit why most people buy it. Research more why they do.

Fear and the lack of understanding??