Investing in precious metals

[vigilant20]

I've been talking to my dad about investing in precious metals. Platinum is especially low right now and I'm thinking about doing it (in two weeks after they announce possible lay offs at work). Does anyone else have any experience or tips to share?

[Greebo]

While precious metal prices fluctuate widely over time, historically this means its very hard to predict when they'll do well, and when they won't.

http://www.kitco.com/charts/historicalplatinum.html

I'd personally stay clear, and instead invest in mutual funds based in companies you know aren't going anywhere, even if they have an off year or two in the short term.

I'd much rather invest in the effort of people (companies) than in the speculation of value based on the current whim of the moment (metals).

My $0.02

[frugalbabe]

I think it's smart to invest in some as a way of diversifying your portfolio. Dh and I considered investing in gold in college but decided against it. Big time kicking ourself now! We would have done better with the gold than our 401k is currently faring. I actually think with the way things are right now and the way people are starting to feel shaky with banks and looking toward a more "hard" currency that precious metals will do well. I am by no means an expert just a gut feeling.

[fixer]

One of the biggest problems with investing in precious metal is they are not liquid. If you need the money, they are hard to sell. If you want to invest in metals, there are stocks of companies that mine and process them. These stocks tend to move along with the price of the commodity. Mutual funds are also available that do this.

[scottp999]

I disagree that they are not liquid. They are traded around the world 24 hours a day. I have helped someone out financially and was able to sell 20 ounces of gold in less than 24 hours to a reputable commodities dealer in my area.

I think diversity is the key to success. Our dollars (which all the markets are denominated in) are debt instruments - Federal Reserve Notes.

If you really study Monetary history, and the current Central and Commercial banking systems that are in effect in almost every country in the world, you will understand how having a portion of one's net worth in a liquid physical commodity like gold is a smart decision.

I would recommend people really research the central and commercial banking systems. The Federal Reserve's own documents are eye opening, like the one called "Modern Money Mechanics".

Also getting familiar with the Treasury and GAO publication called, "The Financial Report of the United States Government" would tell you that both on and of balance sheet debt for our nation was at 60 trillion dollars as of Sept 2008. This is only the federal debt, it does not include state, local, corporate or consumer debt.

Another report to understand in order to comprehend where the purchasing power of the US Dollar is going is the "Flow of Funds Accounts of the United States" published by the Federal Reserve (also called the Z1 report).

It takes a commitment of tremendous time to really learn the system we are in. I hope more people look deeper.

I would stay away from platinum as it does not have the monetary history and is not held as a reserve assets at most central banks like gold is.

Don't shy away from something because you do not understand it fully. Dive in a learn about it. After I finished an MBA in finance I went on a quest of learning in detail about the capital markets and all type of investments (Bonds, Stocks, Commodities, Futures, Currency Trading, Real Estate, etc.). All of the research led in the right direction. Where does all this money come from, how is it created? Then came an investingation into monetary history and theory, which led to research into central and commercial banking that was beyond eye opening, it was enlightening.

Don't put all your eggs in one basket. I decided to put a certain percentage of my net worth in precious metals, and have not found a reason to change my mind. I also have a 401k, Emergency Fund, etc.

"We can create money by fiat (decree). Our checkbook doesn't have a ledger. So you write out the check, it's (money/currency) just transmogrified out of thin air. Which is a nice checkbook to have."
- Jerry Nelson, Federal Reserve Bank of Chicago, Public Relations. May 14, 2008.

Question :“People have often questioned about the Federal Reserve being a private bank or a private corporation. Is that in fact true? – Gary Franchi, Republic Magazine
Answer: “It is…each one of the 12 banks is a separate closely-held private corporation. We’re literally owned by the banks in our district. – Jerry Nelson, Public Relations, Federal Reserve Bank of Chicago May 14th, 2008.

[Telephus44]

We have some gold in Canadian Maple Leaves. I buy them from BuillonDirect (highly recommended).

I also agree with don't buy anything you don't understand. I have some primarily as a hedge to preserve some of my portfolio value - I'm not expecting to turn a huge profit, but it helps me sleep at night knowing I actually have something of value.

[vigilant20]

I came back to say I'd decided I'd like to give it a try, so I'm glad to see some positive feedback and good discussion. The layoffs at my company are supposed to happen next week...so I'll wait and see, and if all goes well I'll pick some up. From what I understand, foreign bullion seems to be the safest bet. My familys had good experience with goldline, but I'll check out your link Telephus44.