/biz/ - Business & Finance

>>719416

Because gold in the amounts a typical person deals in is very illiquid. Even moving a 1oz eagle will cost you 3-5%, and a nonstandard mint or size can run you up to 10%. It's also very volatile, which makes it a poor short-term store of value, too- somebody who bought gold in 2012 would have experienced 30% "inflation" in a year. It's also a pain to store and transfer, since it's so easy to steal and fence, so it needs to be constantly guarded, whereas cash can be moved in a few clicks on Fedwire for almost nothing. Its long-term cointegration with prices also makes it a poor investment- you could buy stocks or bonds instead, and those will actually increase purchasing power over time rather than just holding it. It's also worth noting that the dollar itself has done a remarkable job holding its value, as well- if you'd held your dollars in a interest-bearing account or a money market or rolled T-bills, $1.00 in 1913 would be worth around $1.13 in PPP equivalent terms today, unlike that chart people usually show of it going from $1.00 to $0.04 or whatever, which only applies to holding physical cash.

In short, gold is inferior on most metric to fiat money: in liquidity, ease of use and transfer, short- and long-term value storage, and as an investment. The only thing it has going for it is the fact it's uncorrelated to just about everything else, which is why people still advise you hold a small portion (5% ish) of your money in gold.

>>694078

>100% commodities

Holy fucking shit, you got had. Your parents made the worst long-term investment known to man. and then did nothing.

The "alternatives" segment of a portfolio (so everything that isn't stocks, bonds, or cash) should never come above 25% of the total. The majority of your portfolio should almost always be in stocks of some kind (foreign or domestic). A small portion should be in bonds, to lessen volatility and diversify, another small portion should be in gold and commodities for the same reason, and another portion should be in cash to meet any needs for liquidity and in case of an emergency.

I assume that since you're young, you won't need the money now. Move the account to Vanguard, dump another thousand or so dollars into it, put $5k in VGTSX, $3k in VTSMX, and $3k in VBMFX, and whatever's left in a money market.

>>456609

>>387759

If it's an anomaly it's been persisting for over the past 200 years. See pic related.

Also, in the interim between 2008 and now it's paid out dividends at a steady rate exceeding inflation. You're way ahead on a total return basis and have been since 2012, though due in large part to the huge deflationary spike of like -10% at the start of the crisis that wasn't made up for like three years.

>>376207

It's not possible to invest in gold. It is certainly possible to speculate in gold, but gold is inherently worthless- or rather, it's worth only what someone will pay for it. A stock will generate dividends and a bond will pay coupons whether or not anyone will buy it from you. If nobody wants your gold, you're fucked.

Buying an asset in the hopes of selling it to someone later is the greater fool theory of investing and isn't a smart strategy, as anyone who bought gold in 1980 or hell, 2011, would tell you.