Any precious metal investors around here? - Page 3

Gold and silver still back currency somewhat, but not fully.  This fiat currency is BS and needs to end.  It has no real value and they counterfeit it constantly.  Most of what is invested in metal are just papers saying you bought the metal, without the person actually receiving the product, or much less the company even having the metal to back what they bought.  I can't wait until that whole jig is up, when people start asking for what they bought to be sent to them, it's going to send prices skyrocketing and the people who actually have the metals will actually have something that is worthwhile.  The people with the papers will be screwed.

Currency is not backed by gold and silver. There may be some smaller governments and currencies that still use gold and silver as direct backing for currency, but all the major currencies stopped that in the 1970s. Prior to that, the US operated under the Bretton Wood system which set every dollar in circulation against a fixed percentage of gold which was designed to only have a band of about 1% plus/minus. At the time, since every dollar in circulation was backed against a portion of gold, many international currencies pegged themselves against the dollar so that their currency was backed against gold as well. In the 70's Nixon put an end to the practice in the US so now, your money is no longer backed by raw gold and silver. You can use it to buy gold or silver, and you can trade gold and silver for dollars, but printed money is no longer backed by gold in the sense that you can take a dollar to the back and exchange it for the equivalent amount of gold as you wer able to in the early 20th century.

 

You seem to be frustrated by fiat money and I can understand where you (and others) are coming from, but it's just not possible to really do away with fiat currency all out right now. The total of US dollars right now is a combination of M0-M3 money where:

 

M0 = hard currency - ie printed dollars and minted coins. M0 = every last piece of printed/minted US money in circulation or deposit worldwide

M1 = M0 + All Checks + All Checking Accounts + All Checkable Accounts

M2 = M1 + Money Market Accounts, Savings Accounts, Small CD Accounts

M3 = M2 + Large CD Accounts.

 

If tomorrow, all the nations in the world decided to do away with fiat currency and return to a Bretton Wood System where every unit of M3 money worldwide is pegged against precious metals (gold, silver, platinum, palladium, etc), that only accounts for all the money described by M0, M1, M2 and M3 notations. There are still trillions and trillions of dollars (and trillions in other currencies world-wide) that exist entirely in the form of paper in the form of stocks, mutual funds, investment accounts, etc. There isn't enough M3 money in the world to back all of this paper money that doesn't really exist, and as such, this money is entirely faith-based, and to try to peg its vale against precious metals will cause more problems down the road.

Yeah, it's all going to crash soon enough.  All those monies in forms of stocks, bonds, etc. will just simply be gone.  The fiat system is truly worthless and one day currency will have to be backed by something that exists in physical form.  It makes no sense that currency's worth is backed by debt.  That's so circular in logic and it's evident by the very fact of it all failing!

 

Why don't you experiment with penny stocks, instead? They're risky (of course) but you can fool around with them and learn how the market works.

Or maybe buy a few shares of stock. Try a public utility that pays dividends.

But I don't see metals as worth more than their pre-bubble levels. Probably a bit less now that production has rocketed along with the bubble.

Keep it. They make nice paperweights.

The metals aren't getting worth any more, the currency is just getting worth less.  It will eventually not be worth the paper it's printed on.  I really can't understand why this is so hard for people to understand.  It's probably just because there is all kinds of fanciness and obscurity behind Keynesian economics to cloud someone from seeing logic.

Firstly, if you want to see any sort of real return on metal, you either have to be ready to invest a lot into it and/or also wait a good long time for it. You already have the amount you purchased. I'd say hold onto it. It's nice to have around and its very fluid. 2, 3 years down, if you tire of it, you'll be able to sell it away quickly. I would however recommend as Uncle Erik said, trying your hand with penny stocks and seeing how that goes for you. Only invest into it what you know you can afford to lose right now, so if you make money, you will be happy, and if you lose money, at least you get a learning experience out ot it.

Unfortunately, I can't give advice on penny stocks as I don't invest on my own. As per my father's recommendations, I started a mutual fund last year, and shifted my Roth IRA over to a separate mutual fund. Between those and the 401K through work, all my investments are handled by investment bankers. I'm trying to build up a small egg to play with next that I'll work on myself and see if I can match the returns these guys are getting me, do better and worse and see if I can figure out how things work myself.

Not a penny stock, but have a look at www.dom.com (NYSE: D), which is probably your local electric utility.

I haven't done any research on them, but I generally like utilities. And they aren't going away any time soon.

Think about selling the silver (even at a slight loss), then buy ten shares through E-Trade. Buy and hold - then get one of the stock tracking software and watch what it does. Check the financials and reports, and look up what each of the numbers means. It's a little overwhelming at first, but you'll eventually pick up enough to understand.

Since they're local, try to go to one of the shareholder meetings.

Also, reinvest any dividends and keep adding shares here and there. Ask for a share or two for your birthday and Christmas. If you pick up some cash, buy a little more. Maybe look at the other utilities locally.

Most importantly, keep a long-term attitude towards this. I think the market is in for a rough ride in the next couple of years, but a utility won't disappear. The share price might dip, but maybe you can get a few more shares when it undershoots. You never know, it's a gamble, but this should be a conservative gamble.

You're 14. Say you manage to average one new share a month until you're 25. That'd be around 370 shares. I see that in 2009, the board announced a 49.75¢ per share quarterly dividend, or about $2 a share each year. Today, you'd get about $20 a year from ten shares. But if you had 370 shares, you'd have about $750 a year in unearned income. Keep putting that back into more shares while adding a few hundred a month, and by 65, you'll have a pretty decent stream of income.

Consider that against a bar of metal that just goes up and down. You won't get income from that. But a good stock will kick you a quarterly dividend as long as you own it. A lot of attention goes to stock buyers who make a large killing on risky stocks. That happens, but people also win in Vegas. You just don't hear about the losers.

There isn't much glamor or sexiness to steadily building shares in a company that just supplies electricity, but run those numbers. What if you're able to get 10,000 shares in and are pulling $20,000 a year without doing anything?

Unearned income is key. That's the goal you should be looking at. And you'd be way ahead of everyone to get into it at 14.