Once I start putting assets in taxable, I am unsure whether to put Gold Coins or Stocks in these accounts. My first thought is to put stocks first, to about $10k or so, and then buy gold coins.
My reasoning is that I do not have an "emergency fund," nor do I need one. I have a steady job, great credit, small monthly expenses, and a large Roth IRA that I can remove principal contributions from, tax and penalty free, for about 3 years worth of living expenses (as vested principal contributions). Of course, I don't want to tap into my Roth IRA as an emergency fund, unless it's an emergency.
Thus, my thought is to build up around $10k of stocks in taxable, with my first non-sheltered assets. If I have an emergency, I can sell the stocks (preferably at long-term capital gains rates, if they've been held >1 year), and simultaneously within my tax-shelters, exchange other assets for stocks, to retain an appropriate 4x25 asset allocation. Even though I "sold" stocks to pay for the emergency, I didn't really lose the market position, and what I really sold was whatever asset happened to be overweight in the portfolio at the time; it's just that I accessed that asset through tricky maneuvering.
After the $10k, then I am thinking of buying gold coins. The reason for not buying the coins first in taxable, is that if I have to liquidate them for the emergency, I lost about a 3% spread, minimum on that gold. Whereas if I sell stocks, I only lost the transaction costs of a few dollars. Also, selling stocks means I can ACH the money to my checking account within a few days. Selling gold might mean I have to wait 2 weeks for a large check from a coin shop to clear.
I am considering buying a house within the next 2 to 3 years, and if so, I will use all of my taxable savings as the downpayment. If I do that, and I have to liquidate gold coins, I have 2 problems:
1) I have to deal with that 3% spread
2) I cant prove to the bank that I had the money for 6 months prior to the mortgage.
Banks like to see that you actually had the downpayment money, and it wasn't a gift from your relatives. If it was a gift, you probably can't afford the monthly payments, according to their logic. I assume if I have $50k worth of stocks in my brokerage account for 6 months leading up to the mortgage request, then that should be sufficient. I don't think banks actually expect me to keep the $50k in a 0% savings account for 6 months.
If I tried to do this with gold, I'd have to take a picture of the gold coins next to a newspaper everyday for 6 months, like a kidnap victim, to prove I had the gold. After I buy the house, I'll likely be prepaying the mortgage with any additional money I have beyond my annual tax-shelters (401k/IRA/HSA/IBonds). That would mean I won't have any taxable savings for 10 to 15 years with which to buy gold coins.
I really like the idea of first putting gold coins in taxable, rather than stocks, however it doesn't seem workable to me in my situation. Perhaps if I have an enormous win-fall of money, I can just put most of that into gold coins, and exchange my gold ETFs within my tax-sheltered accounts into cash/stocks/bonds to retain the 4x25 structure, instantly making my PP portfolio about 25% bigger, and spending the rest of the win-fall on H&B
