Where do you keep your Savings?

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Re: Where do you keep your Savings?

Mirch's recommendation looked good today - so I now know not to go against the Mirch trend. But the thesis for not buying gold at these prices as a savings vehicle still stands (IMHO).

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Is it a good time to sell gold (jewellery) then?? :konfused:

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Re: Where do you keep your Savings?

In my opinion, yes. Gold has increased from ~ 250 dollars an ounce to ~ 1860 an ounce in about 6 years. (I could be wrong about 6 years, maybe it is 7 years but you get the picture).

That is a factor of 7 times higher. While I have no idea where Gold will end up, it cannot hurt selling Gold at these prices.

The Q guy is missing - he will have something of value to add to this discussion. Just a secret between us, he is quite smart! But I hear he is quite busy and is a man of few words.

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Re: Where do you keep your Savings?

I have invested in real estate, supported family and friends in businesses. I have 1 years worth of expenses sitting in a checking account -- which is fine because as a Muslim, I don't accept interest. My investments have brought in 20+% every year including 2008 :)

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Re: Where do you keep your Savings?

I'm going to qualify my comment by saying, I'm not an investment professional, but from my limited knowledge of the industry, I hope the following responds to questions about gold (and please, investment professionals feel free to correct what I've written).

The "flight" to gold is a result of investors looking for a "safe" investment relative to the US dollar. When the US$ goes up, investors generally sell gold and will re-invest in US$. So, be prepared, gold may be a good short term investment given the condition of the US economy, but the likelihood of it's value coming down in a matter of years is quite likely given that most economies face boom/bust cycles and because gold is considered overvalued.

And there was a question above about investing in gold companies versus the physical commodity gold - those are two totally different investments - a gold mining company is valued on the prospects and returns of the company, whereas physical gold bars are valued sort of like currency. An alternate to buying gold bars is to invest in gold bullion stocks/certificates.

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I am not an investment professional either. Here is my 2 paisa:

Gold mining stocks have not moved up as much as Gold stocks. Hence "pundits" have been pushing the case for buying these stocks. Apparently, the cost to mine gold is anywhere from 300-500 dollars per ounce. So as long as Gold proces remain above say 550 per ounce, it seems these companies make money.

But I have no idea how cheap these stocks are in terms of P/E, P/S etc.

Gold, on an inflation adjusted basis is about 20-25% below its 1980 peak of 800dollars per ounce. So some make an argument that Gold itself is not overvalued. I have no idea about that.

pak-one mentioned he got 20% per ayear compunded return "every year including 2008". That is an unclear statement - every year since which period? Also, real estate is all about location. Past return is not guarantee of future returns.

As markets collapse around the world due to various fears, ironically, they coould become the safest investment vehicle. When that wouldl occur is anyone's guess. Going in little bit at a time removes the guess work.

queer - where are you - need your input here. Bhaav jyadha chadh gaya kyaa? :)

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Re: Where do you keep your Savings?


It is not my advice it is advice from experts I trust and they have not proven wrong so far. As for how to invest in gold there is tons of information on internet refer to that before you make your decision.

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Re: Where do you keep your Savings?

^ The question is going forward what is the best investment - not looking at rearvew mirror and going after Gold that has moved 7X in 5-6 years. Concrete reasons for buying Gold now (other than some experts said so) would also be helpful, IMO. Else, this is just herd mentality, with folks gravitating to an asset class just because it has made a huge move upwards.

As an aside, I did not say "Mirch provides bad advice" - the original sentence has a distinctly different meaning :). It implied even Mirch can be wrong at times.

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Re: Where do you keep your Savings?

Tuesday Aug 23 WSJ had some interesting points re: Gold - why is has skyrocketed
1) ETFs - inflow into gold ETFs are increasing every month. The biggest ETF GLD has had record inflows. Each share is worth 0.1 ounces of Gold. So as more people flock in, the ETF has to buy more physical Gold, thus creating a near-term increase in demand.
2) Increasingly,people are fleeing stock funds and crowding into gold ETFs
3) Investors who stayed away from Gold are throwing in the Gold and jumping on the bandwagon,

Not sure if this is a bubble, but if it walks like a bubble, talks like a bubble.....

Coincidentally, the S&P500 was up 3.5% today, and Gold was down 3.5% - that is a 7% differential. Time will tell....

As always, have to end with disclaimer that any opinions given in this post should be viewed as coming from a non-professional - these are just opinions.

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Re: Where do you keep your Savings?

Your post was very informative - Thanks! One question - I did not know there were gold bullion stocks/certificates. Are these different from Gold mining stocks (I think answer is yes).

Is their value same as gold bars? That is you can buy one ounce gold worth of gold bullion stocks or certificates? Who issues these gold bullion stocks or certificates. Sorry for so many questions - mainly out of ignorance on this topic.

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Re: Where do you keep your Savings?

I think that under the current circumstances, pure gold is a great investment. Just during the last three years, gold prices have gone from 30K per tola to 60K per tola. Yes, gold price **may **come down, but over the years, the decrease in price has always been nominal and has eventually been offset in the subsequent months. For example, even if gold goes down 500-1000 rupees per tola, eventually it will rise up again, I have never seen gold go down for long. Plus, gold is gold :)

As for real estate, it is also a good investment but a relatively long term investment. It is unlikely to fetch you a huge profit soon.....slow and steady is the game here.

In islamabad, lots of people (especially the CDA goons) have bought/constructed houses and rented them out at sky high rates which seems a good investment. Three portions in one small house with each one fetching 25k ...... just imagine!! though can't say for other cities because not sure if others have the corrupt and powerful CDAs making sure that no other societies develop and that prices remain high.

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Re: Where do you keep your Savings?

2003-Present. I have used a family owned syndicate to make RE purchases. Decent amount of global diversification, both residential and commercial.

I think that anyone investing knows that the past returns are not a guarantee for future returns, however by next year, I should have enough passive income to replace my current income. Not bad for a little bit of planning and some hard work :)

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gold is down 5 percent today. the great hedge against all uncertainties is down. omgzzzz.....

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^ damn, I think I tempted fate :) khair I am still hopeful that gold will eventually rise up again.

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There’s some information on this website that explains the nature of gold or other precious metal certificates. And there are administration costs associated with gold certificates.

​Services – Risk Management | Global Banking and Markets – Scotiabank?

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Re: Where do you keep your Savings?

^ Thanks Sehrysh!

In the last two days, Gold is down ~ 9-10%, while S&P500 is up 4.5%. Now that is a difference of 14% - in 2 days.

While I have no idea where Gold will end up, the dangers of chasing a hot asset class played out in the last 2 days.

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Re: Where do you keep your Savings?

Just an update:
We have decided to go down the Gold bullion route. :slight_smile:

Here is an FT article about investing in Gold that finally convinced us, and after talking to a few experts too! ( looks like Mirch’s advice wasn’t bad either!) :k:

**Gold will stay high for a very long time
**
As I write, gold is knocking on the door of $1,900 an ounce. And if you have been following my pyramiding gold strategy, you’ll have noticed just how quickly those $100 up-moves have been coming round!
What we are witnessing is a seismic shift in the gold market. Investors and emerging market central banks across the globe are fed up with governments debasing currencies. So they are taking matters into their own hands. You could argue that they are re-establishing a gold standard.
And you need to be on the right side of this move. Today, I’d like to talk about why I think gold has established a new and sustainable price level. And why if you don’t already have a gold buying plan, I think you should get started straight away.
Currencies have been over-valued for 40 years
Central banks across the globe are scrambling for gold. They’re looking for a new and more robust reserve in the light of devaluing currencies.
As early as November last year, Robert Zoellick, the president of the World Bank, called for a global reserve currency based on gold. Since then countless emerging market central banks have been topping up their gold reserves.

Shrewd investors have been on the right side of this move. I am certainly not alone when I say that gold isn’t going up, so much as fiat currencies are going down. To my mind, paper currencies have been way over-valued for quite some time, and investors are realising it. In a sense, gold is nothing more than a short on paper currency.
Our academic friends tell us that gold should have gradually adjusted upwards over the last forty years. All the time that banks printed paper currency, gold should have gone up to reflect all the new notes in circulation.
But it didn’t! Gold stayed low for decades as faith in paper grew.
But with the credit crisis that faith has been shattered. And gold is now being pushed to centre-stage as a global reserve currency. Not because of central planners, but despite them.
In fact, compared to gold, paper currencies aren’t the only assets that are deflating…
Investing in gold has been good advice for ten years now. And readers that heeded the advice will have made a few quid out of it.
But gold investing isn’t so much about making wealth as preserving it. As investors, we can play the gold market in the same way that the central banks do. We can use it to save wealth.
In fact, we can do even better than the central banks. The banks are buying bullion to stash in their vaults, and it’s driving the price up. At the moment, the stock market doesn’t seem to believe the shift in gold is sustainable. The price of gold mining stocks doesn’t reflect the explosive moves going on in the bullion markets.
I believe that gold has established a new and sustainable price level. And that means gold stocks look cheap and have the potential for a great upward move.
It’s a robust plan to build exposure that could prove very profitable over the years to come.
If you missed the recent spike in gold, then don’t get mad… get even.
Now is the time to buy gold stocks.

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Re: Where do you keep your Savings?

i've decided to invest my remaining ONE million Dollars in MAD-COWS...they are good assets...i'll buy mad-cows from India [it's FREE! :D] and sell them in the US at a premium price! after ALL they are 'WHOLLY' COWS!!! ... :D

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:salute:

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do re-check your figures.
hubby has invested significantly in gold and he did his homework......if there was truly this level of discrepancy then trust me, he would never have done it.
I believe it depends on whom you buy from and how much........and it depends on what you buy too.......