What % of your PP gold is physical?

[systemskeptic]

With 72 votes, approximately 50% of those polled hold essentially zero physical gold (20% of 25%, or less than 5% of their overall portfolio).

Kind of curious what Harry Browne would have to say about that if he was still alive and posting on this forum...

[rocketdog]

With 72 votes, approximately 50% of those polled hold essentially zero physical gold (20% of 25%, or less than 5% of their overall portfolio).

Kind of curious what Harry Browne would have to say about that if he was still alive and posting on this forum...

Yeah, gold might be like earthquake insurance: nobody buys it until after they need it (but by then it's too late). 

Personally, all this PP talk has me motivated to go out and buy some physical gold, even though I'm pretty much tapped out between my 401K and Roth IRA.  Maybe I'll buy a gold coin ever once in a long while when funds permit and the price is right. 

[Ad Orientem]

With 72 votes, approximately 50% of those polled hold essentially zero physical gold (20% of 25%, or less than 5% of their overall portfolio).

Kind of curious what Harry Browne would have to say about that if he was still alive and posting on this forum...

My guess is he would say that that's better than 99% of other investors. But you really want to hold some physical as disaster insurance.

[systemskeptic]

I really don't understand the assumption that physical gold is only necessary for disaster insurance, SHTF, Armageddon, etc.  Is it really that hard to imagine a default in physical delivery that doesn't involve the end of the world?

[smurff]

I think using terms like disaster insurance, Armageddon, etc. are just ways of describing superlatively bad outcomes.  Maybe it's a way to scare people into thinking about what the possible bad outcomes can be, how they would manage during those outcomes, and how to plan a prevention scheme to avoid being afflicted by such outcomes in the first place. 

These are all examples of ways to avoid bad outcomes:

*Keeping as much gold as possible in self-managed physical form rather than ETFs or allocated/unallocated storage,

*Investing in actual Treasury bonds rather than fund-based ETFs or mutuals,

*Keeping shares in your own name rather than in street name when possible,

*Keeping less than $200K in any given FDIC-insured bank or less than $500K in securities ($100K cash) in any given SIPC brokerage,

*Keeping I-Bonds and E-Bonds in paper form,

*Obtaining paper statements from bankers/brokers at least twice a year,

*Keeping basic financial records and documents (whether electronic or paper) in waterproof/fire resistant storage, and,

*Not keeping all your eggs in the same basket.

I don't think there are many people who adhere to each and every one of these avoidance strategies.  I know I don't.  It's convenient to invest in gold ETFs, to keep $1 million in one bank, to keep stocks in street name, to invest in TLT and other treasury funds, and to keep important documents and securities in electronic form.  But being reminded from time to time about the possibilities helps keep the mind sharp and helps remind you of the risks--which is not something I thought much about before getting involved with PP investing.

With respect to physical gold:  I can imagine lots of scenarios involving a default in physical delivery, where we are all still here the next day.  As an example, MF Global was that very delivery default for some people. Those defaultees are still among us, living their lives--without their gold, and with no assurance they will ever get it. 

It's possible that little PM delivery defaults take place every day around the world, we just don't hear about them unless big bucks are involved.

[PP67]

just curious but has anyone actually bought and taken delivery of some gold since The Great Decline?

[frugal]

I think using terms like disaster insurance, Armageddon, etc. are just ways of describing superlatively bad outcomes.  Maybe it's a way to scare people into thinking about what the possible bad outcomes can be, how they would manage during those outcomes, and how to plan a prevention scheme to avoid being afflicted by such outcomes in the first place. 

These are all examples of ways to avoid bad outcomes:

*Keeping as much gold as possible in self-managed physical form rather than ETFs or allocated/unallocated storage,

*Investing in actual Treasury bonds rather than fund-based ETFs or mutuals,

*Keeping shares in your own name rather than in street name when possible,

*Keeping less than $200K in any given FDIC-insured bank or less than $500K in securities ($100K cash) in any given SIPC brokerage,

*Keeping I-Bonds and E-Bonds in paper form,

*Obtaining paper statements from bankers/brokers at least twice a year,

*Keeping basic financial records and documents (whether electronic or paper) in waterproof/fire resistant storage, and,

*Not keeping all your eggs in the same basket.

I don't think there are many people who adhere to each and every one of these avoidance strategies.  I know I don't.  It's convenient to invest in gold ETFs, to keep $1 million in one bank, to keep stocks in street name, to invest in TLT and other treasury funds, and to keep important documents and securities in electronic form.  But being reminded from time to time about the possibilities helps keep the mind sharp and helps remind you of the risks--which is not something I thought much about before getting involved with PP investing.

With respect to physical gold:  I can imagine lots of scenarios involving a default in physical delivery, where we are all still here the next day.  As an example, MF Global was that very delivery default for some people. Those defaultees are still among us, living their lives--without their gold, and with no assurance they will ever get it. 

It's possible that little PM delivery defaults take place every day around the world, we just don't hear about them unless big bucks are involved.

+1

great answer

[mortgagemangolfer]

I'm new to the forum and to PP.  I've looked at the gold purchase options and considered the plusses and minuses of each, but I've not seen any comments on Fidelity's gold coin and bar purchase program, which has buy and sell commissions of about 2% if I'm reading their page correctly.  This seems like a very reasonable option to me.  Is it?  Would appreciate some input as I'm planning to implement within the next week.

[Ad Orientem]

I'm new to the forum and to PP.  I've looked at the gold purchase options and considered the plusses and minuses of each, but I've not seen any comments on Fidelity's gold coin and bar purchase program, which has buy and sell commissions of about 2% if I'm reading their page correctly.  This seems like a very reasonable option to me.  Is it?  Would appreciate some input as I'm planning to implement within the next week.

Hi and welcome to the forum!

Not familiar with the program you mentioned. Is the 2% in addition to spot price or is it in addition to whatever markup has been assigned to the coin or bar in question? If the former I would say it sounds like a good deal. If the latter I would pass.

Edit: A good rule of thumb is to add everything up and see how far over spot you are. If you are paying more than 5% + Spot for coins I would pass. Ditto if more than 3% + Spot for bars.

[stuper1]

I've seen that program also, and wondered whether any of the PPers are using it.  I believe they also charge a 0.5% annual storage fee if you have them store the gold for you.  If not, then there is a delivery charge for you to take possession, but the website doesn't say how much the delivery charge is.

[mortgagemangolfer]

I called Fidelity for more info--here's what I've got:

Gold spot price was $1,399.50 at end of the day.  Fidelity's window closes at 3:00p.m. Their price for a 1 oz American Eagle today was $1,453.  I'm assuming the commission on top of that (2.5% in band above $10,000) of $29.06 for total cost of $1,482.06.  5% above spot would be $1,469.48. 

Storage is .125% per quarter, or it can be delivered, cost depending on amount--some amounts require armored truck, but the rep said last time he dealt with delivery if was about $45 for slightly less than $10,000.

There was a slight uptick in gold price from 3 to 4 o'clock which may skew these numbers a bit--not sure how much.

I am looking for a way of holding some gold in a Roth IRA that does not depend on an ETF.  That means stored gold held by the IRA custodian.  Does this sound like a reasonable way to do that?

[annieB]

Wish I could short the $1482 and go long the ETF.
No,not in the PP,lol...

[smurff]

Find out if Fidelity will allow you to have a gold storage program in your IRA, or if they offer self-directed IRAs including gold storage.  I doubt it, but I am subject to being surprised.

If they do not, and you want to do IRA in gold anyway, you will need to open a self-directed IRA at a company that specializes in nontraditional IRAs.

[mortgagemangolfer]

Fidelity will allow gold American Eagle 1-oz coins in the IRA, according to the rep I talked with.  They will store at .125% per quarter fee.  Coins are stored in Fidelity's name, however.  Insurance and storage info is in the fine print on their gold, silver and precious metals page.

My take on this is that if I hold a portion of my gold allocation in a Roth IRA at these expense levels, I am able to reallocate when necessary without tax issues without having to be concerned about EFT issues.  My expense is the buy and sell commissions, the .500%/year storage fees and delivery fees if I take delivery.  Later today I will ask if delivery is available to me only at purchase or at any time I have the gold in storage.

If I'm missing something, please let me know.  I'm a novice at this!

[jbrown]

Fidelity will allow gold American Eagle 1-oz coins in the IRA, according to the rep I talked with.  They will store at .125% per quarter fee.  Coins are stored in Fidelity's name, however.  Insurance and storage info is in the fine print on their gold, silver and precious metals page.

My take on this is that if I hold a portion of my gold allocation in a Roth IRA at these expense levels, I am able to reallocate when necessary without tax issues without having to be concerned about EFT issues.  My expense is the buy and sell commissions, the .500%/year storage fees and delivery fees if I take delivery.  Later today I will ask if delivery is available to me only at purchase or at any time I have the gold in storage.

If I'm missing something, please let me know.  I'm a novice at this!

Say what? I've been a Fidelity customer for years and never heard about this. They sure don't advertise it very much.

[Lonestar]

I called Fidelity for more info--here's what I've got:

Gold spot price was $1,399.50 at end of the day.  Fidelity's window closes at 3:00p.m. Their price for a 1 oz American Eagle today was $1,453.  I'm assuming the commission on top of that (2.5% in band above $10,000) of $29.06 for total cost of $1,482.06.  5% above spot would be $1,469.48. 

Storage is .125% per quarter, or it can be delivered, cost depending on amount--some amounts require armored truck, but the rep said last time he dealt with delivery if was about $45 for slightly less than $10,000.

There was a slight uptick in gold price from 3 to 4 o'clock which may skew these numbers a bit--not sure how much.

I am looking for a way of holding some gold in a Roth IRA that does not depend on an ETF.  That means stored gold held by the IRA custodian.  Does this sound like a reasonable way to do that?

Which department at fidelity did you speak with concerning buying physical gold?

[smurff]

I'm amazed AND surprised. I wonder why they keep their program a secret.

[2thefuture]

For fees try: https://www.fidelity.com/trading/invest ... r-platinum. Fees seem high and since I've never used the brokerage firm, Fidelitrade, I don't have anything to add other than at, http://fidelitrade.com/ if you click the "product / price" tab you'll see a price list.

[dualstow]

Fidelity will allow gold American Eagle 1-oz coins in the IRA
...

Say what? I've been a Fidelity customer for years and never heard about this. They sure don't advertise it very much.

They used to talk about this at bogleheads or some other forum and I did see it on Fidelity's home screen when gold was over $1700. You're right, though, they didn't advertise it that much.

[stuper1]

If I'm missing something, please let me know.  I'm a novice at this!

I think what you're missing is that you're going to pay a lot more in fees than you would for a gold ETF/CEF, and you're not going to have actual physical possession of your gold.  You can hold IAU for 0.25% per year in your Roth IRA.  Buy coins outside your IRA, as you are able, and keep them in a safe deposit box or other secure storage to which you have quick access.

[mortgagemangolfer]

OK, I think I've developed a plan through all of this.  I'll go ahead with an ETF, then move to the gold coins if I get nervous.  I have been talking with representatives from the retirement section, who have gone to other sources when they don't have an answer.  I have been told that although I cannot take delivery of the gold directly from my retirement account, the coin can be transferred to my non-IRA account and I can take delivery from there.  This has been an interesting exercise--sounds like we've uncovered a few new options.  Thanks to all of you for your input and advice!