Gyroscopic Investing

## Background

I joined this forum on April 12, 2019. By July 4, 2019, I was attempting to take the steps to convert my portfolio into a Permanent Portfolio. However, I delayed implementation to conduct thorough research, spending considerable time in forum archives gathering information.

## Current Situation

Nearly 6 years later, my financial situation has changed. I now have a clearer focus on what's most appropriate for my investment strategy and am ready to implement it. This strategy includes a significant investment in gold.

## Previous Gold Purchase

My only prior gold purchase was on February 21, 1995, from American Century Capital Preservation:
- Cost: $2,041.58
- Items: 3-oz American Eagle, 2-oz Maple Leaf, 1-1/10 oz American Eagle
- Shipping: $20

The value initially decreased and didn't recover for about 15 years (around 2010). Now, it's worth approximately $15,000 (?).

## Investment Considerations

I'm considering investing in both physical and paper gold:

1. Physical Gold Concerns:
- Risk of loss due to fire or theft

2. Paper Gold Concerns:
- Long-term expense fees compared to initial higher ask price for physical gold

My motivation for holding gold is its potential to increase in value when other investments decline, not due to government-related concerns.

## Proposed Strategy

Initially, I'm considering a 50/50 split between physical and paper gold, adjustable based on break-even analysis.

## Questions

1. For those investing in paper gold: Which provider do you use and why?
2. For those investing in physical gold: Which provider do you use and why?

## Additional Notes

- Not interested in secrecy, taking physical control of vault-stored gold, or offshore storage
- Prefer to store physical gold at home
- Considering gold coins over bullion for practical use as potential currency
- Investments for paper gold would be in an EFT (assuming no mutual fund options are available)

yankees60 wrote: ↑Sun Feb 23, 2025 4:04 pm 1. Physical Gold Concerns:
- Risk of loss due to fire or theft

Big concerns of mine which is why I use vault storage service, but I note you already decided you prefer to store physical gold at home.

yankees60 wrote: ↑Sun Feb 23, 2025 4:04 pm 2. Paper Gold Concerns:
- Long-term expense fees compared to initial higher ask price for physical gold

Because I use vault storage service, my concern is the opposite - my vault cost (0.65%) is much more expensive (7 times!) than fund expense ratio (0.09%). But in your scenario, the fund expense ratio is greater than the zero cost of storing at home. However, the cheapest funds are now very inexpensive, so I do not consider this a significant concern for paper gold. And when you say "initial higher ask price for physical gold", you mean the purchase price spread, yes? Even if you only paid a respectable 3% premium over spot for physical, how many years at 0.09% for a fund cost to catch up, 30+?

yankees60 wrote: ↑Sun Feb 23, 2025 4:04 pm My motivation for holding gold is its potential to increase in value when other investments decline, not due to government-related concerns.

I have similar motivation - my experience while actually holding the PP is that gold has tended to be uncorrelated to at least one of the other assets in the PP at any given time. And I subscribe to Harry Browne's idea that gold should do well if we encounter a highly inflationary environment.

yankees60 wrote: ↑Sun Feb 23, 2025 4:04 pm Initially, I'm considering a 50/50 split between physical and paper gold, adjustable based on break-even analysis.

I am currently about 80/20 physical/paper. I only hold physical in taxable account. I only hold paper in tax-advantaged account (IRA). I want most gold in taxable because it frees up room in tax-advantaged for the other PP assets that generate monthly or quarterly income. This was HB's recommendation regarding asset placement for tax efficiency. I don't want to hold paper in taxable account because I don't want to deal with the tax complication of the "micro-transactions" used to pay fund expenses. But I like having some paper gold in the IRA for easy and cost effective rebalancing purposes. Any physical gold you store at home is not eligible for IRA, so you must consider it like a "taxable" account. Physical gold stored in a vault can be placed in an IRA for some additional fee.

yankees60 wrote: ↑Sun Feb 23, 2025 4:04 pm 1. For those investing in paper gold: Which provider do you use and why?

By "paper gold", I mean an exchange traded product that is 100% backed by physical gold, no leverage, no options, not an ETN, etc. I started out with Blackrock iShares IAU but switched to IAUM when it became available. I use it because of very low expense ratio. I also considered GLDM with similar low expense ratio, but after reading prospectus of both, I just felt more comfortable with the trustee and custodian used by IAUM.

yankees60 wrote: ↑Sun Feb 23, 2025 4:04 pm 2. For those investing in physical gold: Which provider do you use and why?

I use Hard Assets Alliance because I wanted easy buy/store/sell solution and probably will never want to take delivery - though that is an option. You can purchase from HAA for immediate delivery, but I have always selected vault storage so I cannot comment on that experience.

yankees60 wrote: ↑Sun Feb 23, 2025 4:04 pm - Considering gold coins over bullion for practical use as potential currency
- Investments for paper gold would be in an EFT (assuming no mutual fund options are available)

I believe 1 toz. sovereign gold coins were HB's recommendation. I have a mix of 1 toz. American Eagles, 1 toz. Canadian Maple Leafs, and 1Kg bars. The price spread tends to be lower for the larger bullion bars, but I would never want to take delivery of that product. For storing at home (and being able to sell more easily in the future), I think you cannot go wrong with 1 toz. Eagles, Leafs. Regarding mutual fund option (which I would actually prefer over exchange traded format), believe me I have searched but have not found a suitable mutual fund. They all either include gold miner stocks, or gold options/futures, and basically do a very poor job of tracking the price of gold as compared to the exchange traded products which track the price very well. The Permanent Portfolio MF PRPFX does actually have 20% physical gold, but has the other assets mixed in - not a pure 4x25.

yankees60 wrote: ↑Sun Feb 23, 2025 4:04 pm1. Physical Gold Concerns:
- Risk of loss due to fire or theft
...

Gold does not burn. Worst case in a fire, it melts (loses it's shape/form). It will still be gold though and retain it's value.

Sometimes it comes up that maple leaf coins are purer and thus more easily scratched than their crown gold cousins. But, I think someone else replied that they have never been dinged on the price for a coin that had…dings.

Krugerands are also a fine choice. I bought some Vienna Philharmonics and a Britannia, too, because I got bored.

If you wipe a Gold Maple Leaf with a paper towel, it will leave microabrasions. Always only dab with a soft moist cloth. Do not rub. Do not let coins bang into each other. Do not drop on the table. Treat them like eggs.

Diversify your gold. Various choices that each have their own distinct benefits/risks, but where that diversification dilutes down the risk. Digital/blockchain - trades 24/7 and easily crosses international borders (PAXG), spreadbets (not in US), BullionVault or suchlike, ETC (I use iShares), Futures/Options, physical vaulted overseas, physical in-hand (perhaps self insured and distributed across hiding places), some in a local bank safety deposit box .... and the full or partial loss of any one of those dilutes down the loss to likely less than what the portfolio might lose at times through natural market price movements.

ochotona wrote: ↑Wed Feb 26, 2025 11:15 am If you wipe a Gold Maple Leaf with a paper towel, it will leave microabrasions. Always only dab with a soft moist cloth. Do not rub. Do not let coins bang into each other. Do not drop on the table. Treat them like eggs.

Our Britannia's are the same, 24ct 999.9 Many seem to store them in capsules and only handle them by the edges whenever taken out of the capsule. For me they're just bullion and resale prices tend to be the same whether they're perfect or not. spot+1.5%, spot-0.5% dealership spread (10+), so averaged over a decade = 0.2%/year (or less for longer).

Ring test balanced on a finger and struck with a wooden stick will often result in a table drop, so do that close to the table with a cloth. Or use one of the phone app ring testers. Magnet test probably could introduce a microabrasion as might measuring the diameter/depth. Weighing can include a cloth if you're particular. Along with a eye piece magnifier and maybe some white lint free gloves - a collective test kit that likely costs <$40. If you trade a lot then maybe invest in a Sigma Pro, I personally don't have one as I don't trade often and when I do I use the dealers. Only buying from a reputable/established dealer is preferable IMO, don't buy from eBay or car boot sales etc.

Thanks for all the information so far. I will get back to responding to some of your responses.

However, first are more questions here.

I bought my gold in February 1995.

I am looking for access to daily gold prices in table form since then.

So far this is the only place I have found it:

https://www.usagold.com/daily-gold-price-history/

It seems accurate. Can anyone else render a judgement on its accuracy? Know of any other web sites that does the same?

I did start an Excel worksheet many years ago in which I tried to document a mid-month price for each month of the year and then value my gold using it.

It is not complete and has amounts from 1995 to 2008. With then one additional entry from 2017.

From what I did document it seems like the following are true?

A gold coin is worth about 2% to 4% more than the ounce gold price?

An American Eagle 1/10 oz is not worth 10% of an American Eagle oz but about 10.7%? In other words, some amount more for buying it in the smaller form (like any other food in the grocery store)?

It looks like from around 1995 through October 2007 the price of an American Eagle oz was about equal to the price of a Maple Leaf oz? But starting in December 2007 to October 2008 the American Eagle was selling for a slightly higher amount? But when I look at my December 2017 amount it looks like they again became just about the same. So, assume that they do have the same value?

ochotona wrote: ↑Wed Feb 26, 2025 11:15 am If you wipe a Gold Maple Leaf with a paper towel, it will leave microabrasions. Always only dab with a soft moist cloth. Do not rub. Do not let coins bang into each other. Do not drop on the table. Treat them like eggs.

Side note: maybe I should stop using paper towels instead of facial tissues. I have lost much of my sense of taste, although it’s selective. Maybe I have microabrasiaons.

yankees60 wrote: ↑Thu Feb 27, 2025 2:43 pm An American Eagle 1/10 oz is not worth 10% of an American Eagle oz but about 10.7%? In other words, some amount more for buying it in the smaller form (like any other food in the grocery store)?

One thing’s for sure: When you go fractional, you get dinged on the price. Four 1/4oz eagles are going to cost more than one 1oz eagle. Fractional is fun, 1oz is more efficient. the most bang for your buck.

This only partially addresses your other questions, but in general, you pay a premium on some coins, e.g. Eagles vs Krugerrands, but you should get that premium back when you sell.

yankees60 wrote: ↑Thu Feb 27, 2025 2:43 pmI am looking for access to daily gold prices in table form since then.
... Know of any other web sites that does the same?

Nick Laird is well respected with the data, but not free:

http://www.goldchartsrus.com/

If you have a specific question, you can try sending him an email.

yankees60 wrote: ↑Thu Feb 27, 2025 2:43 pm...
A gold coin is worth about 2% to 4% more than the ounce gold price?

An American Eagle 1/10 oz is not worth 10% of an American Eagle oz but about 10.7%? In other words, some amount more for buying it in the smaller form (like any other food in the grocery store)?

It looks like from around 1995 through October 2007 the price of an American Eagle oz was about equal to the price of a Maple Leaf oz? But starting in December 2007 to October 2008 the American Eagle was selling for a slightly higher amount? But when I look at my December 2017 amount it looks like they again became just about the same. So, assume that they do have the same value?

Premiums for coins over spot varies. The physical market is disconnected from the paper markets.

In general, yes, smaller denomination ("fractional") coins carry larger premiums than larger denominations. It reflects the increased costs of production and handling (at least in part).

American Gold Eagles (AGEs) usually have the highest premiums, but premiums vary over time with supply and demand. Note that AGEs are an alloy that contains some additional silver and some copper to make a more durable coin than .9999 fine gold (like the Canadian Maple).

yankees60 wrote: ↑Thu Feb 27, 2025 2:43 pm I bought my gold in February 1995. I am looking for access to daily gold prices in table form since then.
...
Know of any other web sites that does the same?

Daily data back to 1968 but you have to copy/paste. London pm fix of 3pm is around 7 hour ahead (subjectively) of US time so is more early morning US time.
https://www.lbma.org.uk/prices-and-data ... ces#/table

seajay wrote: ↑Thu Feb 27, 2025 6:37 pm

yankees60 wrote: ↑Thu Feb 27, 2025 2:43 pm I bought my gold in February 1995. I am looking for access to daily gold prices in table form since then.
...
Know of any other web sites that does the same?

Daily data back to 1968 but you have to copy/paste. London pm fix of 3pm is around 7 hour ahead (subjectively) of US time so is more early morning US time.
https://www.lbma.org.uk/prices-and-data ... ces#/table

That is an excellent one. Thanks!

More questions.

For a business I worked for I'd regularly first be buying Belgian Francs and then switching to Euros.

While I was obtaining quotes oftentimes in much less than 5 minutes the quotes would change.

Would this not be the same for gold prices?

I know that ETFs have prices that change from moment to moment like stock prices?

Also, if right now I wanted to check the price of gold and then the bid / ask as of the same time for an American Eagle and Maple Leaf .... where are three sources you'd go to get this information if you were doing it as soon as you finished reading this post?

yankees60 wrote: ↑Fri Feb 28, 2025 11:38 am... I wanted to check the price of gold and then the bid / ask as of the same time for an American Eagle and Maple Leaf ...

Apmex used to advertise their buyback price for bullion items. These days, I think almost all bullion dealers tell you to call them for their buyback prices. I know there are some bullion trading services that let you trade gold/silver with better control over bid/ask, but you are dealing with unallocated accounts at that point and caveat emptor as to whether or not you actually own the underlying asset.

yankees60 wrote: ↑Fri Feb 28, 2025 11:38 am

seajay wrote: ↑Thu Feb 27, 2025 6:37 pm

yankees60 wrote: ↑Thu Feb 27, 2025 2:43 pm I bought my gold in February 1995. I am looking for access to daily gold prices in table form since then.
...
Know of any other web sites that does the same?

Daily data back to 1968 but you have to copy/paste. London pm fix of 3pm is around 7 hour ahead (subjectively) of US time so is more early morning US time.
https://www.lbma.org.uk/prices-and-data ... ces#/table

That is an excellent one. Thanks!

More questions.

For a business I worked for I'd regularly first be buying Belgian Francs and then switching to Euros.

While I was obtaining quotes oftentimes in much less than 5 minutes the quotes would change.

Would this not be the same for gold prices?

I know that ETFs have prices that change from moment to moment like stock prices?

Also, if right now I wanted to check the price of gold and then the bid / ask as of the same time for an American Eagle and Maple Leaf .... where are three sources you'd go to get this information if you were doing it as soon as you finished reading this post?

Those morning and afternoon price fixes/times are just the price banks agree at the time to equally balance their books, just a single 12 noon time for silver. The metals market and all other trades defines the ongoing price at any one time. Same as stocks.

https://bullionvault.co.uk/order-board.do is indicative (I ignore the warning and click on advanced and then proceed) that you can edit to expand thee gold set to also include New York and Toronto (and use troy ounces) and get a feel for how prices are being leveled/moving at any one time. Arbitragers might move gold between vaults/countries as/when there are potential benefits from doing so - which all helps to keep prices aligned globally. Outside of that there are the Options/Futures etc. markets all doing similar, with leverage.

For coins its a matter of looking at what you can get from local dealers/wherever and comparing those. In some cases one dealer might be short on numbers of the coins you're offering to sell so may offer a better price ... or suchlike.

yankees60 wrote: ↑Fri Feb 28, 2025 11:38 am

seajay wrote: ↑Thu Feb 27, 2025 6:37 pm Daily data back to 1968 but you have to copy/paste. London pm fix of 3pm is around 7 hour ahead (subjectively) of US time so is more early morning US time.
https://www.lbma.org.uk/prices-and-data ... ces#/table

That is an excellent one. Thanks!

Wow! Yes, my thanks as well seajay! I was familiar with the USAGOLD price history that Vinny referenced but did not know about the one at LBMA. Using both, the timing of each works out to approximate "opening/closing" prices for my US Central timezone:

• LBMA-PM 3pm London (8am Denver)
  USAGOLD 3pm Denver (10pm London)

Which provides me nice 9am/4pm US Central approximate "open/close" prices.

With that in mind, in case this is of interest to anyone else -
Using those "bookend" prices, I was curious to compare them to the actual purchase price paid for physical gold at HAA - the service I mentioned in reply to Vinny's initial post. Since each purchase was conducted at some point during the day, I summed the open+close and divided by two to arrive at a mid-point estimate for that day. Here are the dates of purchase and USD prices (open/close/mid-point):

• mm/dd/yyyy "Open" "Close" Mid-point
  01/19/2022 1,826.95 1,838.58 1,832.77
  02/01/2022 1,799.85 1,800.77 1,800.31
  04/13/2022 1,976.75 1,977.25 1,977.00
  09/26/2022 1,643.35 1,627.95 1,635.65
  12/28/2022 1,803.35 1,805.86 1,804.61
  03/14/2024 2,160.80 2,161.70 2,161.25
  04/15/2024 2,344.20 2,381.97 2,363.09
  04/25/2024 2,318.70 2,330.80 2,324.75

Next, I list price paid per troy ounce on those days vs. the mid-point price. Also the calculated spread percentage:

• mm/dd/yyyy Mid-point Paid %Spread
  01/19/2022 1,832.77 1,901.16 3.7%
  02/01/2022 1,800.31 1,866.32 3.7%
  04/13/2022 1,977.00 2,103.82 6.4%
  09/26/2022 1,635.65 1,655.99 1.2%
  12/28/2022 1,804.61 1,899.22 5.2%
  03/14/2024 2,161.25 2,234.60 3.4%
  04/15/2024 2,363.09 2,423.82 2.6%
  04/25/2024 2,324.75 2,390.59 2.8%

Among the things that can affect the spread are the product type such as weight, bar vs. coin, and possibly storage location. The highest spread (6.4% ouch!) was for purchase of 1 toz. American Eagles stored in Salt Lake City. The lowest spread (1.2%) was for purchase of 1Kg bar stored in New York City. Two other 1Kg bars incurred spread cost of 3.7% stored in Zurich & Singapore. The remainder were for purchase of Canadian Maple Leafs stored in NYC & SLC with spread ranging from 2.6% to 5.2%. The American Eagles really stand out as most expensive - unsure if they will also sell for a premium when that time comes. How do these spreads compare to what others encounter purchasing physical gold?

Combined with the 0.65% annual storage fee, vaulted physical gold is quite a bit more expensive than using an exchange traded product like IAUM. But then an ETF is ownership in a trust (financialization of gold) and not direct ownership of gold. The HAA solution gives similar ETF type online experience for buy/store/sell with the benefit of actual gold ownership. Keeping some of the gold allocation in an ETF in an IRA makes for low cost re-balancing without any tax consequences. For the amounts I need to hold in physical, I decidedly don't want to store at home. I've searched in my area and banks just don't seem to want to be in the safety deposit box business anymore - not profitable for them I guess. So I try to think of owning physical gold like owning another real asset such as a boat or RV, and then not being able to store it at home due to lack of space or HOA restrictions. Therefore I pony up the vault fee like paying for a boat slip or parking spot in order to store it securely offsite.

In London we have a nice range/number of dealers relatively close to each other so some competition. But even in other cities you can often get spot+1.5% (buy) and spot-0.5% (sell back) on popular/main choices of coins when dealing 10+ for one ounce/25 for quarter ounces (Sovereigns). A dealership in Blackpool has similar spreads, but he does employ 40+ staff and more usually has multiple millions in 'cash' (at the bank) just in case someone walks in with a 400oz bar or suchlike. Sometimes individuals walk in looking to do big deals, buy or sell bag fulls (that otherwise would be a missed opportunity). Sometimes there a fakes in a bunch that they buy, write-off (costs). i.e. cost of doing business is inclined to have them not being too bothered about buying or selling at a precise current market price, although they do have a eye on that obviously. Often they may have paper positions, long or shorts that adjust in reflection of how much physical gold they have on their books at any one time.

Smaller one-man outfits will of course be more aware/critical of pricing, less well positioned to take losses.

Storage wise and self insured is inexpensive Kept at home hidden in various locations. A lot of dollars can amount to relatively little in gold, a single 400oz brick for instance now being > $1 million value. 20 once ounce coins > $50K value (most could easily find 10 odd places around their home to hide a couple of coins).

As with other assets diversification matters. Some coins at hand, some ETC/ETF, some in safety deposit boxes, some in Futures/Options/BullionVault ... or whatever. Distinctly different risks/benefits and that dilutes down the loss if any one of those was partially/fully lost.

From a American perspective I'd probably be looking to buy silver rather than gold. The US has repeatedly defaulted on promises and even confiscated Americans gold (compulsory purchased at below fair value). The 8000 tonnes in Fort Knox/elsewhere is more likely lower grade, bricks smelted from Americans gold coins. Isn't up to London Good Delivery fineness/quality. So if there (no audits) may not even be worth half the value of 8000 tonnes worth. And if there was a Dollar run, converting dollars to gold, then at some point restrictions or some other action would be necessitated. Silver in contrast is less prone to such more extreme conditions.

https://mises.org/mises-wire/gold-fort- ... -americans