Friday, March 06, 2015

Precious Metals Investing - A Look Back

I just posted my latest video.

I decided to use the data from my previous metal videos to do some research.  Specifically, how would a metal investor have done over these past six years?  The results were shocking.

Peter Schiff
Aaron Clarey's blog

Previous Metal Videos:
Play the Ratio
Ratio Strategy #1
Ratio Strategy #1: w/ Trade Costs
Ratio Strategy #2
Updates (Jul14)
Updates (Oct 14)
Updates (Feb 15)


In case you needed an example of a "respected precious metals expert" predicting when the sky will fall.  According to this guy, the end comes this September.

UPDATED 3.20.15 10am:

Today's Yahoo Finance Headline:

Someday this will be the right advice, and the blind squirrels that make up the gold pumpers will be vindicated with their nut.


Anonymous said...

Hi! I belive you might have missed the point of "investing" in gold. It's not about that few percent gain or loss here and there. It's about securing at least part of your purchasing power against political insanity, war, crises etc. over decades. You could pull your brother out of a concentration camp with gold-not so with a stash of paper.
I have a few Austro-Hungarian coins with caesar's Franz Joseph's head on them. His Empire does not exist for one hundred years, He himself is dead even for a few years longer but nonetheless with that coins I can buy more or less the same amount of goods as my great-great-grandpa back then.
Well, then again I live in a Central European country torn with some sort of war or political insanity for whole XXth century so I may need gold more than you guys on the other side of the Great Puddle.

James Wolfe said...

Buying gold or silver is not an investment. The rate of return after inflation over time should be zero. So If you're trying to make money "investing" in metals you're wasting your time. With the fed printing money by the trillions the value of the dollar declines. Therefore it takes more dollars to buy everything including stocks. If stock prices go up 2x that's because the value of the dollar has declined 2x over that period of time. The dollar is strong only in comparison to currencies in worse shape like the Euro. As the previous commenter said, a silver or gold coin will buy the same amount of goods or services today as it did 50 years ago. The dollar will not. And all those gains in the stock market can be lost in minutes and not recovered for 20 years hence the problem with so many seniors not able to retire. Most people who invest in stocks are foolish thinking they will always rise in value and purchase them at their highs rather than consider their return on investment. It's the dividends that you live on. If the purpose in investing in stocks is to sell them then you are at the mercy of economic forces and you might as well just buy metals that retain their value over time. Metal are a hedge not an investment.

Karl said...

no argument, James.

I've covered the 'preservation of wealth' aspect in my previous videos. I've also shown how one can increase wealth by trading the ratio.

The gold-bug personalities, however, are guilty by directly, or indirectly, selling the notion that one can get rich by buying metals. I hope I've exposed this bad advice here.