Sunday, June 22, 2014
Will gold and silver prices go up or down? I am sure we are not the only coin dealers that are asked this question daily. Yes, silver and gold prices will go up and they will go down. If I knew what silver or gold was going to do in advance, I would be sitting on my own island just like all of the other crystal ballers of the world. All kidding aside, I could never honestly answer that question unless I was manipulating the silver or gold market. If I did have the billions of dollars to manipulate the market, do you really think I, or anyone else for that matter, would be telling you about it? However, there is one question that I am willing to part with my opinion on, and that question is should I buy silver and gold. My answer is always the same. Yes! For thousands of years, gold and silver have been used to purchase goods, back currencies, transfer wealth etc.... Currently our paper dollar is not backed by anything but the good faith and credit of our nation. Given that our great nation is currently about 17 trillion dollars in debt, makes that statement a lot less reassuring. Most Americans, including myself, have worked their tail off their entire adult lives and want to ensure that everything they have worked for is not lost. Historically, if the dollar goes up in value, gold and silver are worth less. If the dollar has less value, then silver and gold prices go up. Thus, if the dollar becomes worthless gold and silver should become very valuable. Gold and silver are essentially used as insurance against the dollar devaluing or becoming worthless. One would hope the dollar would not become worthless, because I think food, water, guns, and ammo would be the most important items to own at that time. God help us if we ever have to live in a world like that. Don't get me wrong folks, I am not predicting the end of the dollar or the zombie apocalypse. As mentioned above, I don't have that magical crystal ball to predict future events. Heck, I truly hope that our government gets its spending under control, and the dollar becomes stronger than ever. However, I am not willing to bet my life's work on that happening. I am also not willing to dump my entire life savings into gold and silver. In my opinion, a more diversified approach is best. So that leads us to the questions of how much of your portfolio should you put into gold and silver, and when should you buy. Most financial planners recommend 10-20% of your wealth should be in precious metals. I don't have the magic number, so you need to figure that out for yourself. Do what YOU are comfortable with. Just like stocks, there is probably never a time to stop buying. Prices are gonna go up and they will go down. Knowing when to jump in and out of the markets at the right time is darn near impossible, unless of course you have inside information. If anyone tells you that they know when the best times to do so are, then respond by asking where their island is, what major bank do they own, what state do they represent, and why they are bestowing this privileged information onto you. If by chance they do answer one of the first three, you may actually want to listen. However, if you are like the 99.999999999999% of us who don't make future events happen, you will listen to your gut, try to insure your assets are protected, and be as happy as we can be in trying times.