Should I buy gold or silver? How and why?

I keep seeing this is the way to go now due to the insane economy. I have no clue as to which one of these would be a better option, but I’m interested in both. Is this the most secure investment I can make right now?

I also have no clue where to begin if I wanted to make a purchase of either, so very specific (read: gold buying for dummies) advice would be appreciated.

If anyone could tell you that, there wouldn’t be a commodities market for either of them. I am not being flip, investors in total have already made their bets on what they think the prices should be and where they are going. Gold was a terrible investment for years and years. Suddenly, it took off. It could take off some more, it could stay at roughly the same price, or it could plummet.

I can say that some investors like to buy gold during uncertain economic times. The permanency aspect appeals to some investors. If the overall economy tanks hard(er), you could do well with gold. If the economy turns around quickly, you could lose your shirt. Some people think gold and silver are overinflated right now like some of the dot.com stocks once were. They can fall just as quickly as the ascended.

You can buy and sell them and track them just like any other stock or mutual fund.
Gold’s ticker is simply GOLD.
You never really have the gold or silver in your hands since your really just buying shares of it.

Gold and silver are poor investment choices, but okay if you just want to temporarily park your money in an asset that isn’t subject to the vagaries of the government. Any commodity investment is risky and very few amateurs venture there.

If you look at the ads at the bottom of the page, you’ll see precious metal sources, and a simple internet search will net you bullion houses that sell for a percentage over spot price, usually about 3-5%. Problem is, if you need to sell it quickly, there’s a good chance you’ll lose money.

Just saw Hampshire’s post. Gold stocks is just more stock market investing. If you want the metal in your hands, buy it online or at a local bullion dealer in your town.

Ticker GOLD is actually actually a mining company.

If you want exposure to the physical commodity, but don’t want to buy futures or big chunks of metal, you could invest in ticker symbol GLD.

There are are plenty of other similar instruments:

SLV for silver
USO for oil
UGA for gasoline
UNG for natural gas

Because gold has just shot up, you want to buy at the top? Buy high, sell low isn’t usually a good strategy. Like people have said in the other threads, the only way not to get hurt on the roller coaster is not to jump on or off while it is in motion.

I didn’t know that it was at the top already–and I’m pretty sure you don’t know that either. If I did invest, it would obviously be with the thought that gold is going to continue to rise over the next 2-3 years.

Gold is a solid base on which to build a diverse investment strategy. It’s not a windfall investment, it’s not a get-rich-quick investment (if only such a thing existed) it’s an investment for VERY long term investors. I personally own an amount of gold that might make some people shake their heads, but my reasoning is this; when the market tanks (read; downcycles), and it will and when the players in the market get nervous, and they will, they’ll want something that has consistently increased in value (and this is the important part) the entire world over throughout history to play to their fiscal neuroses. That’s where I come in. If the government decides I can no longer own gold, I will sell it to the highest bidder somewhere else in the world. I personally own the metal (not company shares or funds) because I can best choose what to do with it and when. If you’re interested in it, look for a local dealer. I advise no more than 3% above spot prices that day and try to lock the dealer into a purchase rate that keeps you both in the black.

To be fair, most investments in gold wouldn’t amount to a very big chunk of metal.

I’m going to agree with most of the posters here that investing in gold right now due to its recent rise is just chasing returns, and is unlikely to turn out well for you. Investing in gold 5 years ago, now there was a good plan. I think that a small amount of gold as part of a diversified portfolio isn’t a bad idea.

I will agree with this. Much of the gold I own was purchased quite a long time ago. I still buy gold coins and whatnot because I enjoy the hobby but the spending on the investment side of the portfolio is done.

Over the years, I’ve invested in gold, gold mining stocks and gold (and precious metals) mutual funds. I haven’t done very well – probably a net loss. My advice is to know what you’re getting into. Do a lot of research. Understand the role of central banks, commodity markets, analysts, the US dollar, the so-called “anti-gold cartel”, junior mining stocks, political and social concerns about individual mines around the world, etc. There’s one heck of a lot more to this than “things look bad, gold should go up.”

. Well, that of course depends on when you buy it and when you have to sell it. Let’s take an extreme example.

If you bought gold in January 1975(this was about the time Americans were allowed to buy physical gold), it was selling for $180 US. Assuming you were 45 years old, you bought it for the long run.

Now it’s 2004. You’re 74, have an average amount saved for retirement, on Social Security, but you need to tap into your long term investment to fund some unexpected emergency. You call your broker to liquidate your gold(which you’ve held for 29 years). He tells you you’ll receive the staggering sum of $425/ounce for your gold. Hmmm? $425 divided by $180, is a whopping 236% over that period. Let’s divide the 236% by 29 years(not even discounting for compounding interest), and we get…ta da! about 8%. Actually, not bad for the long term. Of course, you could have bought the Dow in 1975 at about 600. And sold in 2004 at approx. 10,000+. That’s a niggardly return of only 16+%. !!!

It all depends on when you buy and when you sell. I could have made a case showing that you’re a genius for buying gold, and I could have chosed dates that show you’re a loser for buying stocks(or any other instruments).

I won’t disagree that buying various items is a good strategy.

Take a look at the chart. Gold hit a high, fell down, the tried to reach a high, but was unable to reach the previous high, then fell. Now, it has failed to reach the previous second high. If it falls again, then the chart pattern probably doesn’t indicate a continued rise.

You don’t need charts or anything else to evaluate this economic decision. Any time some investment has made its way through the experts, filtered through the investment enthusiasts and now passed on to the average joe it is likely to be overvalued.

Much like flipping homes for fun and profit took a long time to work its way down to the point where people with no real estate experience were finally doing it, gold may be at a similar point. In fact with gold there are repeated periods of a rapid rise, followed by many years of mediocrity. Gold as an investment is most valuable as an inflation hedge and a diversifier for a small portion (5% or so) of your investment portfolio. Even then you are better off with broader commodities exposure like CCFs (collateralized commodity futures).

If you read nothing else, just accept as fact that you are not going to beat the system by discovering the right single thing to invest in at a given point in time. Our psychological make up is lousy at getting this right. People consistently buy assets at their peak and bail after they have taken a considerable fall. That appears to be the pattern you are trying to follow here.

Gold’s expensive now. Now is the time to find bargains!

I have a question: I thought that virtually all major countries long ago eliminated even a theoretical link between their currency and gold. In theory then, gold should be no more special as a commodity than platinum or any other heavy metal. Yet that doesn’t seem to be the case. Is this pure nostalgia for when gold=money, or is there more to it?

This makes a lot of sense to me, thank you.

No, it’s not. True, it’s hwaaaaay better than diamonds, but it’s not a great investment and since it is now seriously inflated, now is a particulary bad time to buy.

Now since you bought yours a while ago, it’s not so bad…