$2022 per OZ

Gold is for market timers.

Rule 1 of investing. Don't attempt to time the market. You might win once or twice. You won't in the long run.

bought mine 2 years ago at $1180 per OZ , is that long term or not ?!

The idea is to not invest a significant amount of money at a single point of time.


Because small amounts (and coins especially) are disproportionally more expensive than e.g. a 1kg gold bar, this adds a lot of "overhead".




OTOH, with gold you can be pretty sure that nobody is doing buy-backs to keep the price up ;-)


Though a lot of governments are actively purchasing it (not in the West, usually).


The only reason people are thinking so hard about gold is because there's no safe investment anymore. Governments don't pay interest on bonds anymore, the stock market is comically disconnected from reality and due to low interest rates, even corporate bonds aren't usually worth the broker-fees.


The hard truth is of course also that in any scenario where gold-bars become the basis for a new currency after some sort of "reset", private ownership will very likely be once again outlawed and one would receive only a fraction of its "true" value in fiat money.

2 years is not long term at all no. You've successfully market timed this time. I'd recommend selling up now.

FWIW gold was a similar price in 1980 to now.

It was over $600 per OZ in the 1930s... $450 in WW1

If you had invested that in stock market it would be worth many, many times more than if you had kept it in gold.

SP500 is up c. 30 fold since 1980.

"Long" in gold-terms is probably in the decades - if not in the centuries.


BUT: I don't think we can predict the future from the past. Especially these days.


There has - AFAIK - never been a situation like now (monetary, politically, socially, economically).

I think you can predict the long term future from the past with a pretty high degree of certainty. Long term the stock market wins. Short term who knows.

SP500 in 1920 was about 8. Now its about 3,300. Up around 400 fold. Gold is up 10 fold or something of that order. Nowhere near inflation. If you took 1915-2015 gold would be up even less - about 4 times.

You could well be right that the short term situation could lead to a crash - I think its anyone's guess TBH. People were saying the same in 2016, 2017. I see that, should a crash happen, a recovery is pretty much inevitable, even if takes a few years. That being the case, I don't see any role for a gold in a long term portfolio.

It won't appreciate long term as it has no fundamental value, whereas a share in a well managed and profitable company does.

The questions is: which companies are actually well-managed?

Most of the profitable ones these days are quasi-monopolies.

And because there is little in terms of alternatives, most of those are - in my perception - already overbought. Not the least because the SNB has been buying their shares like there's no tomorrow.

I let Bailie Gifford decide this for me, and Fundsmith to a lesser extent. I certainly don't buy Swiss equities.

There's not even a requirement to only buy good companies to do well - an SP500 tracker would do.

SP500 was introduced in 1957 at a starting point of 386.36, not 8. Extreme inflation in the 1980s pushed the SP500 level up by 1350%, but inflation back then was constantly around 15%. So, real returns was not as high as you expect.
Gold is just panic buy, in my opinion, because the market is always come around after a crash. That is so long as you only invest on company with solid earnings, growth, and low leverage (debt). That is because the probability of default is much higher when the economy is in a deep trouble.
If you want to speculate commodity, future contract in long-term investment, primarily real estate. The world is getting crowded and there is no new land on Earth.

US real estate has never been a particularly good long term investment on average. You run a huge risk of taxation as Americans already know, annual property tax can easily run 2-3%. What a brilliant way to recover COVID subsides tax property owners as they can't take escape.

US RE was great investment after 2007-2008 crash, so as Buenos Aires Recoleta RE during late 1990s crisis. Recently Eastern EU, for me Hungary and Slovenia, were great investments. Not to forget the Stockholm in early 2000s, was also great. Tax free in most cases.
Those are all for small timers like me as I cannot afford to invest in NYC, London, Moscow or Paris.

This right here.

Now I might invest a small sum in gold or silver shortly. But what you said there is something that could likely happen in a doomsday scenario like that. But I'm also sure there will be ways around this to be able to make good use of your gold in a scenario like that. You better store it at home though and not in some bank deposit box.

May I ask what you are doing in a situation like this? where it's hard to find any good investments. And just like you said the market is so disconnected from the real world that it's both hilarious and worriesome to watch.
Are you moving in to cryptocurrencies in hope for a breakthrough there, which might or might not come.?
Are you stockpiling your cash in a bank account, prepared and ready for being devalued in a coming inflation?
Are you keeping your investments in stocks you believe in and are just riding this out?

You will find a lot of sound advice and relevant commentary from some very experienced investors on here:

https://www.bogleheads.org/forum/index.php

Keeping anything valuable at home comes with an additional risk.
The bank knows you bought gold, likely reported it upstream (money-laundering prevention). Unless you buy below the reporting threshold, with cash from Degussa et.al.
And you've got to report it in your tax declaration. If you don't, it's tax-evasion.
Thus, in one of those doomsday scenarios, they'd just knock on your door.

The only way around the reporting is to report it "lost". That may have additional consequences later down the road, when you need to liquidate it.
And of course you're evading wealth-tax for it, from then.

In short, buying gold is really not much different a bet than buying stocks: the hope that it might get dicey, but not too bad.
The only difference is that you can physically own it and it's supply is finite.
It's short term value can and probably is manipulated buy central banks (and BIS, of course), but it's likely to keep some value.


I'm really bad with investing.
Which means I'm not doing it.

The only thing I'm good at is saving ;-)

I thought about investing in Apple when the iPhone was released (didn't do it).

I thought about buying TSLA-shares in Summer 2019, but didn't go through either.

Both could still go up, but could also come crashing down again soon, given the right (or wrong) market conditions.

Other tech stocks might also be good investments, but I don't like their business model (Facebook, Google, Microsoft, Amazon).

Well, I let ZKB talk me into one of their "Vermögensverwaltungs-Accounts" and put some money there. But it's a very conservative portfolio which means there's almost no return and still high fees.
And I only put in the minimum amount, once and never really add anything to it, because I hate the fees and they don't take into account the fees when they calculate profitability. So, I just let it sit there.

This stuff only really makes sense if you put everything into stocks - but if you do that, there are cheaper options - and apart from maybe half a dozen tech-stocks, none have really grown much recently.

Oh, I've bought some real-estate in Germany. But it was of course also completely, ridiculously overpriced IMO.

I really just wonder how much longer governments are going to be able to kick the can down the road, with an ultra-expansive monetary policy and no interest rates.
It has (sort of) worked in Japan for the last 20 years, right? But right now everybody does it.

In summary, it's usually best to do the exact opposite of what I do and then you can probably retire early.

Sold off some of my bitcoin and invested some of the proceeds into a few 100g gold bars. Bitcoin may well go up some more, but equally well could drop so thought it wise to diversify into something different. Nice to be able to see, feel the weight of gold in comparison.

Factually speaking, of course you are right.

But philosophically speaking, you are wrong.

When you own a share in a company you have to continuously, well occasionally at least, take a look at that company. Is it still being well managed? And if it isn't, you have to find the right moment to sell and then find another share to buy in its place. The ultra long term prediction for any company is that it will sooner or later bite the dust, with new companies taking over the market. Or what are shares in the East India Company worth these days? Or in the Stockton and Darlington Railway? So although the market as a whole always grows in the long term, individual companies don't. So in a way what you are doing is timing the market (albeit in super slow motion) as you are betting that your particular share won't totally depreciate while you are holding it.

Gold on the other hand doesn't require that level of maintenance. You don't need to read balance sheets or research stuff. You bury your stash of coins for your great great grand children to dig up when they find your secret treasure map, or decide to put in a new drain. That's all there is to it. And in contrast to the shares in the Stockton and Darlington Railway that your great great grandfathered buried, and that are now too worm eaten to be even legible, that gold not only still has tangible value, but it is probably much higher than what he payed for it.

I would guess that the (in some respect almost brutal) physicality of gold (if you buy the real thing of course, not paper-gold...) is one of the reasons it still has such an appeal.


Or, as Auric Goldfinger so succinctly puts it in "Goldfinder":


"...its color... its brilliance, its divine heaviness".

You can avoid all those issues by buying a passively-managed world index tracker.

Unfortunately, I won't make it to BIS' Open Week:

https://www.bis90.org/?lang=en

Anyone been there and tell how it is?

I wanted to go there and ask about the Gold-Price Manipulation Workshops for Beginners, but I was tied up with work ;-(

Maybe they do Masterclasses at some point later?