Gyroscopic Investing

Question to all, there are wide ranging opinions by many on whether 25/25/25/25 is the right split for the PP, whether gold should be underweighted, whether bonds should be underweighted and so on.

One thing that seems to have a relative consensus (if you aren't one, sorry) is that stocks are stretched and have not suffered a major correction for a long time.

So, for someone like me, who shies away from individual stocks and has been burned by mining ETFs and a whole host of other sectors (fuel cells, solar, wind, semis, you name it), any thoughts on having non-PP holdings in physical gold and silver?

I value security right up there with potential return.  Can gold and silver be that homerun like an Apple?  Not sure.  That's why I am asking.

Happy 4th!

Gold is a useless shiny inert lump of metal.  There's no demand for it unless government goes kablooey.

Are you getting the urge to tinker with your portfolio again? I just ask because you have posted so many times about how poorly many of your ideas have worked out in the past (I have had the same problem). Maybe better to just let the PP do its thing.

No no, not at all.  As I've said in the past, I went all in on gold/silver/miners in 2008, got rid of miners in 2013 or so, and all in on PP early 2014. 

However, since I was all in on gold and silver, I am still eating away at the "VP" portion of gold as I ongoing move it into PP (to keep things at 25% as my 401k grows, etc), so still a sizeable chunk in what you'd call a VP, or better called a "yet to be allocated to PP stash", and physical silver I have no interest in selling, so it is also in effect a VP for me.

At some point my gold will be completely moved into PP, and I am trying to determine if regularly buying gold into a VP after that point makes any sense, vs. stocks, options, other misc VP items.

Comes down to when I have 100% of my allocation in the PP and want to start a little VP, which little voice wins, or loses -- Why do you want more gold/stocks/bonds/cash you are already at 25% in it.

That's a good way to approach it.  Otherwise my VP would probably never be a real VP, because it is very hard to part with physical.

If there ever comes a time with gold at $2500 and stocks in the tank, I would have to have the balls to make a switch in the VP.  When I think about that, I can imagine it being difficult for me to do.

Maybe no VP...

You need to diversify your time frame exposure with the VP not add more of the same.

For most people, holding 25% of their investments in gold is enough.

The upside of gold in real terms is always going to be smaller than the upside in stocks.

If you really believe that gold and silver represent good speculative plays, though, then it could be a great VP move.

Even though he always says precious metals are a dumb investment, Warren Buffett is actually one of the most aggressive precious metals speculators of modern times.  He purchased 130 million ounces of silver starting in the late 1990s and cashed out in 2006 for a nice profit, though in retrospect he sold WAY too early.

MediumTex wrote: Even though he always says precious metals are a dumb investment, Warren Buffett is actually one of the most aggressive precious metals speculators of modern times.  He purchased 130 million ounces of silver starting in the late 1990s and cashed out in 2006 for a nice profit, though in retrospect he sold WAY too early.

It was only 2% of the portfolio and there were shady circumstances: http://www.zerohedge.com/article/exclus ... nipulation

I visited the Gold & Silver Pawn Shop in Las Vegas this past week so I can assure you that there is plenty of money to be made in this realm.

MachineGhost wrote: Gold is a useless shiny inert lump of metal.  There's no demand for it unless government goes kablooey.

Meh, it's a commodity, and unlike others with purely utilitarian purposes, this one has thousands of years of aesthetic fetishism attached to it, which IMHO make it a safe bet that it will continue to hold value for a very long time.

White metals... platinum, silver, palladium... seem to have more speculative uses than gold. They drop lower and soar higher. Platinum is reasonably dense, like gold. Silver... not! See also ETF called "WITE".