What do I think of Precious Metals like gold and silver? Should you buy them?
I own some. Not a lot. That is all. Just kidding. Of course I have an opinion. I think every investor should have some gold & silver in their portfolios.
I don’t particularly view it as an investment, however. To me it’s more like insurance and a store of value. If you look at the value of gold over the past couple thousand years, the same amount of gold can buy approximately the same amount of goods from 500 years ago, to today. Gold is the only supply of money that’s held its value since the beginning of recorded history, for 2 simple reasons. It’s indestructible, and it’s rare. Only 3% or less of the total world’s gold supply is added each year, so that keeps the value intact since it’s very hard to find new sources.
I don’t want to own a lot of it because it’s not all that easy to spend, or transfer, and of course physical gold can be lost or stolen. I don’t feel comfortable storing it at my house so I don’t even have quick access to it, anyways. If I needed to convert mine to cash I have no idea how I’d actually go about that as I write this. I’m not going to post it on Facebook that I have it to sell. I’m not going to be able to go to the grocery store or any store for that matter and spend it. I can’t buy anything online with it – when’s the last time you’ve checked out online and your options were: Credit or debit, PayPal, Venmo, or Gold & Silver?
Precious metals are more of an insurance product in my eyes. If the government goes on a mad printing spree, or continues to for that matter, then investors will flock to gold as a safe haven. However, it appears investors are flocking to Bitcoin much more instead. If Bitcoin weren’t around, gold would be going through the roof right now. Many are looking at Bitcoin as the digital gold – the modern day indestructible store of value that gold has always been. Head over to our blog, Did You Miss Out on Bitcoin to learn more.
If my precious metals aren’t going up that much then that probably means my other investments are doing well. So I’m ok with it not growing that much in value and just having the comfort of it being there if the shit ever really hits the fan and our dollar goes into super parabolic inflation mode. Personally, I wouldn’t recommend more then 5% of your total net worth for the above reasons, but I’d certainly at least have some. Again, I’d like to stress that if it weren’t for Bitcoin, the new digital store of value, I would own and recommend quite a bit more percentage wise of your total portfolio.