Thank you so much Richard for providing me with such quality content and knowledge about personal finance. Your videos are a treat and I always enjoy watching them. Keep doing what you are doing, please!
@@ryanwalker3509 Having more industrial uses just means a greater share of the price is real. It really has no bearing on the speculative aspects, which is what this video is talking about with respect to gold.
@@joecurran2811 but there is one big negative for instance in Germany if you buy Gold you pay no taxes if you buy Silver you pay the Standard tax rate of 19%(or at the Moment 16%)
@@Islam-gy9lj Well it is still speculation because you can not predict supply and demand, but you can calculate cash flows for stocks and real estate that you are comfortable to hold even though nobody wants to buy it from you at a higher price, which is the only way you make money on gold.
@@TheIcelandicInvestor Actually, we can predict the supply and demand for Gold. Gold is limited so the supply would run out eventually and the demand of Gold rises when there is a financial crisis ahead or when people think there is a crisis ahead. Gold is a safe haven asset. Nobody said that an investment has to provide cash flow to be called an investment. Tesla doesn't give dividends even Warren buffet company don't provide dividends so are these called speculations as well? We know that's not correct. If I believe Warren buffet's company would do well in the future I would buy stocks of the company and then when the price rises I will sell. And yes like I mentioned there is speculation in every investment if warren buffet's company goes bankrupt tmr then I would lose everything. So I am speculating that the company I am investing in wouldn't go bankrupt. And that's why every investment has some form of speculation.
For me it’s a small hopeful hedge against inflation and diversification. I don’t use it to make money, I’m just trying to not lose money. Plus the good thing about it is, because it’s dents, you can hold a considerable amount of it before you ever need any kind of massive security system. The reason why I don’t bother with ETFs in regard to it is because it’s widely considered that the paper market for it is much larger than the actual physical amount that exists and if you don’t hold it you don’t own it. I guess it’s basically just betting that 5000 years of human history will continue to find it valuable as it’s never truly gone away. I wouldn’t go all in, but I do think it’s smart to have a bit. Also, in a worst case scenario it has proven itself overtime. Look at World War II. Money meant nothing but tradable goods and commodities meant everything, gold, diamonds, textiles. I guess if the inconceivable could ever happen nobody wants to be caught short with their pants down not being able to access their money because they need a power grid to do so
Kyle Netherwood gold funds are only useful if your goals are to profit from price fluctuations where as owning physical gold should be used for capital preservation in the event of hyperinflation.
this is the most legitimate and lowest fee vaulting servie. Financial times writes about it also 100% gold exposure. It took me a while to find them, thank me later with some cool information if you are all about that positivity :D
the hope is that in the event of a hyperinflation event, your contract will settle in cash to cover the difference in buying power, leaving you with more money but the same amount of wealth because the money way "contracted" to buy gold. Just have to make sure your opponent's broker squeezes the margin call out of him, but if the dollar goes Venezuela, your contract can expire deep in the money but still not pay because the other guy fucking left the country. it's legally binding, but you're fucked
I remember going on a field trip in grade school to the NY federal reserve and seeing the vaults of gold as part of the tour. After which they gave each of us $2,500 in shredded fiat currency. Is interesting how society is veering away from tangible currency.
True, but the whole point is for it to preserve wealth, not grow it. And when the only thing that publicly traded companies are producing are losses, then it’s better to have gold.
While I certainly do appreciate Buffet's perspective on precious metals and agree with him that stocks are preferential in most cases, his attitude really under pins the core principles of money. It is absolutely impossible for any nation to print it's way to prosperity. As national debts continue to reach untenable levels, the reserve banks will be called upon to monetize those debts, which will result in significant inflation. Historically significant inflation (or deflation) has been damaging for stock returns. It's best to hold physical gold (and other precious metals) as an insurance policy in the event of wildly fluctuating paper assets. The Central Banks understand this concept all too well. Their actions betray their words when they are in fact the biggest hoarders of Gold bullion in the world.
Ehhh long story short... don't put all your eggs in one basket...and just use gold as a hedge against inflation and keep it for the long term as it will be a nice counterbalance to retain profits in your portfolio
It's really not. Its pretty much the easiest asset to time. At least for the past 25 years. Just cost average over more than a year or two and you're ahead.
One topic that'd be neat to cover in the near future would be some volatility in the repurchase agreement (Repo) market. There's been some speculation that it's one of the warnings of a coming recession and such. I've only heard bits and pieces of it, but honestly I value your opinion a lot due to your amazing quality videos :) I understand if you don't want to do it though, since it is a tad US centric.
Ew, "BCE", hmm gee I wonder what event caused BCE to turn CE? BCE is just a pick on Christians, if you wanted to be "sensible" to every one then we should use names like for Mars like SOL-4 or something; or regardless of your beliefs you can not be anti-Christian and just use "BC" and "AD" just like I say Mars and Jupiter.
Gold is speculative? I don't think so. Think about it, gold has been used as money and a store of value for thousands of years. Its place in history extends far beyond coins, bars and jewelry. Whether you believe in it or not, gold has somehow outlasted alternative currency for thousands of years. One of the biggest misconceptions about gold is that it's a speculative element. The point of gold isn’t what it can produce; instead, its value comes from the fact that it’s a source of protection in times of crisis. Gold price can go up or it can go down, but gold itself is permanent. It’s an excellent hedge in terms of rising inflation. Plus, if you focus solely on the price you lose a lot to information value. There’s a very distinct difference between the gold price and the price of gold. The price of gold refers to the cost of putting a coin or a bar in your hand. It represents the cost of the physical metal itself. Meanwhile the gold price has become nothing more than a reference point. People focus on the price of gold…but those are the people that focus on the price of everything; and you know, people know the price of everything and the value of nothing.
Gold has a single feature most Northern Americans don’t think about. If a war breaks out and everything goes to hell fleeing is much safer with a handful of kangaroos in your pocket. You can sell them in every place in the world.
Gold is beautiful and is a good hedge over the long term. That volatility you see is typically associated with peoples lack of confidence or bullishness in the stock market. In the end however, gold remains true. That is why central banks in China, Russia and the United States hold a portion of their holdings in gold. It's also no secret anymore that anyone trying to create a gold back currency to challenge US dollar hegemony gets bombed into the stone age. That tells me that people still deeply value what gold represents.
If central bank all around the world has a significant amount of their reserve in gold, you want to have at least a small part of your portfolio exposure to gold. They must know something
Because banks are super long term. Put it this way: if you had an option. 1 billion dollars. Or 1 million worth of gold. And you could only tell your great great great grandson where 1 of the lots are. Which hidden lot would you want him to know?
@@jaysonmaharaj8003 Sure would pick gold in that case. But how many of us want to leave our hard-earned money to our great great great grandsons? I think we should enjoy our money during our lifetime and our descendants should work and make their own money. YOLO!
It is an easy choice if the gold is in todays prices. What are the odds of the 1billion dollars being even worth 1/1000th of its value in that time. Besides given that long dollars probably would not exist, there would be a world digital currency or credit system by then. But I bet Athletes in the future will be still wearing heavy gold necklaces to display their wealth.
Great video, the value of gold depends on with whom one talks. Like any asset, it is an optional choice. Keep your portfolio of assets mixed so you have many options to use in the future.
I own some gold and silver in my safety deposit box as a small position in my portfolio. For diversification, but also because, well I kind of enjoy it, I like collecting coins and bars. I find the properties of noble metals interesting, and a noteworthy reason it is has and is a storage of value. One reason I do not hold it though is for some apocalyptic financial crash that that some people collect it for. If there was some mad max type situation I figure I have just been holding the metal for the meanest warlord that would emerge on my block and I am perfectly content to the fact I would just be screwed.
Perhaps someone can help me understand here... Is a gold price graph, like the one used in this video, even a helpful visual? Being given, in this video, that money decreases in VALUE, it would stand to reason that, over time, the PRICE of mostly everything will fluctuate in the short-term, and rise in the long-term. On a graph like that, could it not be just as easily interpreted as a graph of the USD INFLATION vs the more stable gold VALUE? Especially with fiat currency inflation already an explicitly stated factor.
I'm not sure about the graph, but I think it accounts for inflation of the US dollar by using the US dollars' value from one particular time (e.g. 2013 USD)
A chart of the gold price in USD correlates very closely with a chart of USD inflation, although not exactly for two main reasons: 1) The price in USD is also related to the price of USD in every other currency. So it’s possible that while gold is going up in terms of say USD, it might be going down in terms of JPY if USD loses value against JPY. 2) There is a degree of speculation by people looking to make a profit on price swings, so this can have an effect separate from pure inflation.
Yeah. It depends on how you look at it. That college boy uses it to show how volatile a value of gold is (this time measured in US dollars). Somebody else may use it to demonstrate how US dollar gets more and more diluted for whatever reason. The question is: what is US dollar, how do you know how much it is worth? Is it worth the paper and the ink, or is it worth more?
It would be fascinating to see what would happen if we went back on gold (I don't see that happening in the short term). I still prefer owning quality dividend companies in my portfolio, but a lot of smarter investors hold a small % of their wealth in gold.
We would run into problems when we needed to expand money supply same as the last time. There's really no need to go back as long as our government keeps issuing gold money (e.g. maple leaf, liberty counsel etc.). Returns are 10% p.a. on average so it does make sense to hold some imo. You can also generate a good yield (relative to sovereign). Its basically like holding a bond with no government attached. Currency exposure without a central bank attempting to devalue the currency. The correlations are helpful as well. So if you're trying to offset some currency risk why not use gold?
I think gold is a good addition for the wealthy, rather than newer investors. Gold is an insurance against the economy. If all else fails, a rich investor will still be able to be wealthy just from their gold. However, it's not very useful for smaller investors whom wouldn't be able to hold enough gold for it to be an insurance. Even so, I think holding physical gold should be the choice made. Then, you really are insured against anything. Great one for those who believe in the potential threat of systemic collapse.
@@stevenkippax I would argue the opposite. Rich investors can hold companies and real estate, whereas poorer investors who can't afford such assets can but small quantities of gold to accomplish the same thing (hedge against inflation and currency risks). You cant buy $1,000 of diversified equities or real estate but you can buy a half ounce of gold.
i want yum Nobody I know nor have ever known have ever used gold for a transaction. Bitcoin has no use for investing, payment, or any other field as I can see, as if you fund your wallet today and hope to pay your bills tomorrow, your money might be sitting at half of what it was.
You're saying diversifaction means holding more assets, in order to get a higher reward at lower risk. I'm pretty sure it's about getting a bit lower reward against a much lower risk.
I don't believe it has to come with a lower return; if you buy two assets that are both expected to earn you 8% return, but they have 0 correlation, your risk profile is better than if you just buy one of those assets. Your expected return doesn't change, but you face lower risk
In general you are optimizing for your maximum return given a certain risk tolerance. Therefore if you remove some risk from your portfolio you can now add some higher yielding, but riskier assets to increase overall total expected yields.
The Plain Bagel That’s true for this specific example, because Gold’s correlation with other assets (stocks) is not 0, and it’s actually negative, meaning most of the time gold goes up when stocks go down. So you’re not getting a higher return, you’re just having a lower risk because you’re hedging your bets as you pointed out in the video!
@@ThePlainBagel the cost of hedging is rarely 0 though. a) completely unrelated assets are few and far between b) for most hedges you pay an opportunity cost. If you know how to hedge through 0 correlation assets with 0 opportunity cost, you should apply for a senior position at a big hedge fund immediatly ;)
@@tomcads1604 I agree, but diversification is different from hedging. Buying something with 0 correlation doesn't hedge something; buying something with -1 correlation does. If you were an airline company that wanted to hedge jet fuel prices, you could go long an oil future (which, theoretically, offers a -1 correlation to your current oil exposure). If oil prices go up, your future gains value, and your business loses value (jet fuel becomes more expensive). Your hedge therefore offsets the effect of rising or falling prices, removing the risk. If the airline wanted 0 correlation, they would buy something unrelated to jet fuel prices (it's difficult to find something with NO correlation, but they could buy something like stock in a local-sourcing art supplies company). This clearly wouldn't offset jet fuel prices (i.e. it would not hedge), but it would have little to no correlation (i.e. it WOULD diversify)! So hedging does typically come with a cost, but diversification may not necessarily if you believe the art supplies company will also do well.
I invest 5% in physical gold every quarter. I love gold. I buy with the head and the heart with gold. I also have 5% in cash every quarter earning 2.5% for emergencies..
MrBigEnchilada the point was the price of gold is mostly speculative in price and not based off the same analysis methods used to evaluate stocks and bonds. Whether you think gold or bitcoin is better they both offer similar investing points
I believe you're confusing "safety" with intrinsic value. Gold is valuable because it is a rare earth metal that isn't easily reproduced. You can confidently buy physical gold knowing that it will retain some value that can be used for human exchange. Whereas paper assets (which technically aren't even paper anymore because it's all digitized on a computer) doesn't have any redeeming qualities beyond what a corporation or government is willing to give you for it. Gold was here on Earth long before humanity arrived, and it'll still be here after we're long gone.
Charles Rebbel a lot of things were here on earth before humans. Gold has conductivity qualities and it’s shiny, but it’s use just like diamonds does not justify its value. For instance what can you do with gold if the market wasn’t there to sell it? You can’t eat it. You probably won’t have a smelting machine so you can’t melt it. It takes on an inflated value because humans have arbitrarily said so. Would you rather have 1 million dollars of gold, or land, or even oil?
@@NotShowingOff Get rid of the 7 billion humans, then your point has some validity. Until then, land, gold, and oil are all relatively the same in terms of value. (depends on the land)
There is only one way to own/hold gold and silver and that is physical bullion that you keep in your own possession, NOT in a bank.. If you don't hold it you don't own it.........
With gold mining i would like to add the following: If the mine produces $0,10 profit per ounce when the price per ount is $13,50 and the price rise to $14,50 the profit wil (almost) also increase with $1,00... so the fluctuation of price is increased when trading in mines. Silver follows the gold standard but has even more fluctuations then gold. Silver does have more industrial use then gold.
Gold is insurance against risk of collapse. Just like any insurance policy, you hope that you never have to use it (and indeed the times when you need to use it are rare), but when you do you're very happy that you have it.
I think you can use clips as long as you are using them for education purposes. Education videos have slightly more lenient rules for copyright infringement.
"Central bank (fiat) currency 'tends' to lose value over time"... yes... over 500 fiat currencies have failed in history, the current iteration of the USD has lost over 95% of its purchasing power to inflation... go on...
gee it's almost as if someone predicted all of this and described in excruciating detail how capitalism would collapse. Karl Marx, btw. predicted fiat currency, negative rates, massive debts, etc.
Gold is eternally frozen net worth. And yes, it is for everybody. It is the core of your personal treasury and should only be owned in physical. Even if you buy a gram at a time for 50 USD, you are saving yourself a world of shit when assets deflate.
Yes and no. Also betting that as it has continued to be available throughout the civilisations, different currencies, different systems that it will continue to do so regardless. It’s not a sure thing but there is no other asset on earth apart from food and water that has such a long history of value
Sir you are wrong. Gold is not speculative. Gold only changes in value because the amount of dollars it takes to buy it changes. The price of gold is largely suppressed due to the voodoo hocus pocus paper contracts you mentioned ETF ETR futures and the like provide a different option other than physically holding the gold yourself. Once people realize those paper contracts and numbers on the computer are meaningless there's a mad rush to the physical asset. Just look at that massive spike in 2008. If you want speculation, there's no better example than stocks and bonds. Honestly it's one of the worst things you could put your money into, and it makes up most people's retirement plans!
@@hannessteffenhagen61 how do you view paper currency? How many times has gold been worthless? Zero. How many paper currency's have been worthless? Almost all of them.
Two years ago you would be correct. Now you are just dead wrong lol. Gold serve as a good baseline security so one wouldn’t get hurt as bad in the current and coming crisis.
In India, Gold = money = status. What also helps in keeping the value of gold high in India is having bogus demonetisation policies made by wannabee economists. In any case, income doesn't matter: storing heaps of gold at home makes you ULTIMATE prosperity/marriage material. :)
"Even up until the 1900s we had the gold standard where the value of paper money issued by the Goverment" I enjoy your content, but please don't spread misinformation. Our money isn't issued by the Government. The Central Bank is NOT part of the Government. It's a private bank that can issue money at will.
A big difference at the moment is that the industrial apolications of silver contribute a larger percentage to it's current value (around 12-14$ of the 17 per ounce)
Next financial crisis is around the corner. Government's been throwing heaps of over-inflated currency at the repo market. Stock market ended the year on an artificial high note for Q4, yet we haven't even fully recovered from 08'. If you haven't got at least a year's wages in bullion you're risking more than you think. Only safer investment is 5.56.
@@darkorbitpro1 do you really think it will be cost effective at 1500 an oz. How much do you think it cost to go to an asteroid? I dont see that in the near future, and I certainly dont see it paying for itself as an investment.
@@ryanwalker3509 going to asteroid only costs a fraction of what it used to cost, because of spacex reusable rocket tech improvements, getting asteroid back to earth is the hard part, because you would need to bring enough fuel to move the asteroid all the way to earth and then safely land it somewhere. Mining in space will be the next 100 trillion dollar business, but we are still 100 years away from that....
I read a story of europeans fleeing ww2 and the ship captains would only let them on if the refugees had gold to bribe them with. This is why having gold might be a good thing. it might get you out of a pinch someday. plus you can give it to your kids or whatever so the effect continues.
Yeah this fractional reserve system should continue to produce high yields! Give your money too wallstreet and watch it grow! $22 trilly in debt but fuk it Print more money! Gold has been currency since ancient time but nevermind ignore a milly yeara in precedent And the sheep scatter
You don’t have to physically own gold to benefit from it. One way to benefit from gold is to invest in gold mining stocks or invest in ETF’s that invest in gold mining stocks. I think these ways are good because your also investing in an actual business and can receive dividends so gold will pay you in a way. It also provides you with liquidity.
I love those commercials which urge people to buy gold because it is better than money - "Send us your money!" Okay, the message is send us money and we'll send you gold. But wait, I thought you said gold was better so why don't you just keep yours. Of course because the gold merchants know money is better because it can be invested or even used to buy stuff. It reminds me of the guy on the beach selling maps of where to find treasure, and of course the rubes who fall for it don't use their critical thinking skills.
Gold stores wealth. In ancient times it could buy you a fine horse. Today it can buy you alot more stuff due to inflation of goods. Gold is $1744 today. That can buy you a used car or 1744 of dollar tree goods. The gold price didnt rise there was just an inflation of goods. The gold is the numerator and goods the denominator.
The key takeaway: It's a terrible investment, it's not as uncorrelated to the market as proponents preach and as a store of value it's very questionable.
1:50 why gloss over the fact that gold is the most important metal for jewellery manufacture? The jewellery industry has a history and there are jewellery retailers and manufacturers in every town of any reasonable size. People aren't going to stop wearing jewellery any time soon and there are reasons why gold is the metal that most manufacturing jewellers prefer to use.
I don't understand the value in gold. It's for when the market pretty much crashes and we lose most of everything. I think just having a good enough cash stashed away to survive a depression it won't matter because your investments will recover like it always has. If they don't then what are you going to do with a gold? You're better off investing in a farm, farming lessons, guns and ammo.
I never viewed metals as an investment, but I always saw it as a great way to save your cash & retain the value from when you bought it. It’s not hard to turn it to liquid cash, and it beats letting inflation destroy your savings.
You’ve nailed it! The volatility in crude prices underscores the need for strategic investing. Gold and crude can serve as effective hedges in times of instability. Balancing investments in these assets can provide stability and potential growth, especially amidst rising inflation and geopolitical risks
I just googled her and I'm really impressed with her credentials; I reached out to her since I need all the assistance I can get. I just scheduled a caII.
In 1944 as the USSR was occupying Eastern Europe, the German forces and latvian brigades were surrounded in the Kurland Pocket. Many of them, in trying to desert, ran to fishermen and begged them to take them somewhere safe, and they even offered to pay hefty sums of (latvian) money. However, the fishermen refused, knowing that Latvia's days are over and their currency would not be worth anything. So, they only ferried(or at least preferrentially) those that offered to pay in gold, whether in personal jewels(more common) or bullion(rare). You'd think that they got cucked since the regime imposed was Communist, which abolished private property and did not operate on a transaction basis, where you can use gold to buy factories or property or so... But I know from the inside that a Communist regime, ANY communist regime, operates on privileges, greases and bribes. A well placed gold bar can land you in a good position. Or can be used later, during the Cold War Era to trade with non-aligned countries such as Finland and Yugoslavia. I can confidently state that during a catastrophe, the only forms of currency are food, sex and gold, and this is what the video forgot. That financial hard times do not boil down to just recessions, but also to national catastrophes, the kind that threaten the economy to its core. THIS is where gold glitters.
Started to become more financially responsible, your channel helps my only 2 year college degree ass out in the stock market! Thank you for having fun informative and easy to listen to videos!
Wait ... The oil part when you say that oil prices have taken a hit when new wells are discovered isn't totally accurate right ? I believe a few years ago we added a substantial amount of oil to our reserves and oil prices went up, this isn't the only time. Shouldn't we give more nuance ? (As always haha)
Please don't name currency with zero value (to which they all eventually gets) money. Gold and silver were before any currency, survived through all crisises, survived when plenty civilizations dissapeared and it will remain as such.
I don't know if you can consider gold money. The five characteristics of money are that it's acceptable, durable, divisible, limited supply (sure, a knock against fiat, but limited doesn't mean fixed either), portable, and uniform. Even the strongest gold advocates would need to agree that the metal is not very acceptable (i.e. not many places accept it). Fiat has its downsides no doubt, and I'm not even an advocate for fiat, but I think it meets the definition of money better than gold.
