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Too late to buy PM?

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  • Tue, Dec 01, 2009 - 03:07pm

    #1
    poisonivy113

    poisonivy113

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    Too late to buy PM?

Just wondering. I bought a very small amount over the summer based on what I could afford. With hours being cut back on my job and the debt I have to pay, I really don’t have much extra. Watching PM prices go pretty much straight up gives me a little bit of a sickening feeling that I missed the boat on this and now have no way to protect myself. 

For those of you who didn’t have the information and/or ability to buy some PM when prices were good, what are you doing now? 

 

  • Tue, Dec 01, 2009 - 04:02pm

    #2
    Peak Prosperity Admin

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    Re: Too late to buy PM?

Poisonivy,

That sickening feeling that you mentioned is the reason that you shouldn’t buy gold at this time. Putting aside all the other reasons to buy or sell gold at this point, the best thing you could do for yourself as an investor is to not act on this emotion. Once you do, this emotion will compound on itself, laying a foundation for poor investing down the road.

There will come a point in the future when you have no reason or urgency to buy gold, that will be the time to make additional purchases. 

Your patience and emotional discipline will be rewarded in many ways.

  • Tue, Dec 01, 2009 - 04:43pm

    #3
    Peak Prosperity Admin

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    Re: Too late to buy PM?

INTERVIEW-Euro Pacific’s Schiff says $5,000/oz gold “likely”

http://www.forbes.com/feeds/reuters/2009/11/30/2009-11-30T190403Z_01_N30457029_RTRIDST_0_LS-GOLD-SCHIFF-INTERVIEW.html

 

  • Tue, Dec 01, 2009 - 05:08pm

    #4
    Peak Prosperity Admin

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    Re: Too late to buy PM?

Remember, India bought 200 tons of gold at about $1040/ounce. So there is a big support level there. The other 200 tons are still yet to be sold, which will lead to another support level.

I would like to buy more gold myself, but am uncomfortable doing so at this level. However, if you are buying for the long term, then it makes sense to buy gold, no matter what the price nowadays. If gold does not pull back soon, then I will be buying more gold. I fully expect gold to go much, much higher in the long run. And that is my rapidly depreciating .02 opinon!

 

  • Tue, Dec 01, 2009 - 06:56pm

    #5
    Peak Prosperity Admin

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    Re: Too late to buy PM?

I started buying gold at around $900/oz and I’m still buying, but that’s only because my salary is enough (though more importantly we’ve reduced our expenses) to where we can do both that and pay off my remaining student loan debt more quickly.  And for me, I’m buying for the long term and I’m not getting too nervous about the prices going up.  Having a little gold is nice, but if you have substantial debt I would think that would be a higher priority.  If you have existing savings that you want to put in gold then that is your call, but with regards to your regular income you’re probably better off paying the debt first.  You may feel like you’re missing the boat, but really getting out of debt and buying things you know you’ll need (food and essential household goods for example) are actually better investments than buying gold now.  Once you’ve got that taken care of, then go for the gold so to speak Tongue out.  Jeff has it right… don’t let that sinking feeling let you lose sight of your priorities.

– Nickbert

  • Tue, Dec 01, 2009 - 08:15pm

    #6
    Peak Prosperity Admin

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    Re: Too late to buy PM?

[quote=poisonivy113]

Watching PM prices go pretty much straight up gives me a little bit of a sickening feeling that I missed the boat on this and now have no way to protect myself. 

[/quote]

Make sure you get your brain around the distinction between ‘investing’ in gold and purchasing gold as a wealth preservation method.  Now is not the time to purchase gold for investment purposes – at least not until there is a pull-back to the $1040 level joemanc talked about.

That said, it is always time to buy gold – using dollars that will one day be worthless – for wealth preservation and a stock of an exchange medium that has always held some value above $0.  Even if you bought gold at $1200/oz and it drops to $300/oz you will be able to exchange it for things you need.  Try using those worthless FRNs and see how many eggs and how much milk you can buy with them.

And don’t forget silver…..

  • Tue, Dec 01, 2009 - 09:54pm

    #7
    Peak Prosperity Admin

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    Re: Too late to buy PM?

[quote=Dogs_In_A_Pile]

[quote=poisonivy113]

Watching PM prices go pretty much straight up gives me a little bit of a sickening feeling that I missed the boat on this and now have no way to protect myself. 

[/quote]

Make sure you get your brain around the distinction between ‘investing’ in gold and purchasing gold as a wealth preservation method.  Now is not the time to purchase gold for investment purposes – at least not until there is a pull-back to the $1040 level joemanc talked about.

That said, it is always time to buy gold – using dollars that will one day be worthless – for wealth preservation and a stock of an exchange medium that has always held some value above $0.  Even if you bought gold at $1200/oz and it drops to $300/oz you will be able to exchange it for things you need.  Try using those worthless FRNs and see how many eggs and how much milk you can buy with them.

And don’t forget silver…..

[/quote]

I’m with Dogs for the points I emboldened. And if the amounts are too large as regards gold then silver, especially  pre 1964 coins is a good option. Small amounts done over time result in an exponential growth curve which in this case is a good thing!

Coop

  • Tue, Dec 01, 2009 - 10:30pm

    #8
    Peak Prosperity Admin

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    Re: Too late to buy PM?

DIAP took the words out of my mouth.  If you can’t afford gold, silver is much more affordable, ~$20 for a 1 ounce coin.  In fact, I’ve read that Chinese citizens have been encouraged to buy silver recently, I believe because they had the same problem (they were first encouraged to buy gold, but I’m guessing many were not able to afford it).  I’ve also read that silver may have even a larger potential for growth right now than gold.  If I understand it correctly, silver is currently undervalued relative to .[its historic ratio to?]  gold.  Plus the writers point out that silver is used in industry, so it has that demand as well.

Now, I don’t know how the value of silver would be affected if the dollar was devalued relative to a basket of currencies and some % of gold.  Would silver maintain its ratio with gold, and thus “increase in value” relative to the dollar?  Maybe someone with a better understanding of PMs and currencies could speculate on that for us.  I bring that up because I don’t know if that is a case where an investment in silver may not be as good an investment as gold.

  • Tue, Dec 01, 2009 - 10:43pm

    #9
    Peak Prosperity Admin

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    Re: Too late to buy PM?

This is my 2 cents. (See disclaimer below). 

I myself am waiting for it to retrace, or correct that is. I feel that it’s jumped a wee bit too much as of late. 

Then I’ll buy more. 

*Disclaimer: I am not an investment advisor so if you listen to me and lose your shirt then it’s your fault, not mine. Hee hee hee. Disclosure: Gold, Silver, $CAD, Mining, water, agri stocks. 

  • Wed, Dec 02, 2009 - 02:23am

    #10
    Peak Prosperity Admin

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    Re: Too late to buy PM?

I have faith in 4 things. G(* religious edit)d, Gold, Guns, and the Government only knows how to [email protected] things up.

We are insolvent. http://www.usdebtclock.org 106 trillion in unfunded liabilities, and 12 trillion in debt.

CM pointed out in his fine CC that all Fiat currencies revert to a value of 0. I’d say this time is now upon the USD.

I don’t think gold goes up in price, I think as it was pointed out above, gold holds value. The difficult thing to see is that the dollar is tanking, since it is tanking with the rest of the currencies (except gold) it is a very masked event.

Silver will probably do okay, if price is the issue I’d consider it instead. Anything but Bernake’s counterfeit. Also, food, clothes and things you will be trading in silver or gold to purchase later on may be equally good purchases. 

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