Gyroscopic Investing

systemskeptic wrote: 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...

systemskeptic wrote: 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...

smurff wrote: 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.

mortgagemangolfer wrote: 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.

mortgagemangolfer wrote: 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!

mortgagemangolfer wrote: 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?

jbrown wrote:

mortgagemangolfer wrote: 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.

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