Should I Buy Gold and Silver? Investing for Beginners Series #14 david moadel
welcome to looking at the markets with David Modell should I buy gold and
silver that's the topic of today's video we're also going to cover some essential
gold and silver terms that you really need to know if you're going to consider
buying and/or selling gold or silver and this is part of a series of videos that
I call investing for beginners and if you have questions or if you'd like some
help putting together an investing or trading
plan maybe you want to know more about gold and silver or stocks bonds crypto
currencies options whatever it is you can email me anytime at David Modell at
gmail.com and that email address is right down below all right so should I
buy gold and silver well let's first understand some terms that we need to
know about gold and silver first of all precious metals those are the most rare
and highly valued metals especially we're talking about gold silver platinum
and palladium those are precious metals and the opposite of that would be base
metals those are common non-precious metals such as copper zinc and aluminum
now what is the spot price that's a super important term you're going to
want to know the spot price is what you would pay if you bought a precious metal
immediately right out of the ground spot price does not include what it costs to
make bars or coins out of the metal or to ship it store it protect it etc
therefore generally speaking you will always pay more than the spot price when
you buy a precious metal here's another term you're going to want
to know bouillon bouillon is gold and silver that is officially recognized as
being at least 99.5% pure bullion comes in the form of bars or ingots not coins
and what are ingots well a picture says a thousand words so rather than try to
describe it here they are these are ingots now what is a troy
ounce that is a measure of weight sometimes
used by precious metals dealers one troy ounce equals approximately 31 grams
numismatic value that is the historical or collectible value of a coin as
opposed to the value of the raw material itself here's an interesting one junk
silver that's US coins minted before the early 1960s which contain 90% silver and
by the way there's no such thing as junk gold interestingly enough junk silver
isn't really junk at all and can be surprisingly profitable as an investment
and here's what junk silver looks like the gold standard
that's dollars and other currencies having value because they are backed by
gold and could at least theoretically be exchanged anytime for gold in 1971 the
United States took the dollar off of the gold standard and onto the fiat system
in which dollars now had value simply because the government said so so here's
a question should I buy precious metals well I cannot tell you what to buy or
what to sell but I can tell you this unlike stocks dollars and crypto
currencies gold and silver have been around for over 5,000 years as a
currency and as a store of value and here's a chart from 2005 to 2008 teen
gold has actually outperformed the S&P 500 believe it or not and the S&P 500
I'm having SP why that is the ticker symbol for an ETF that tracks the S&P
500 and that is the blue line and I'm using the iShares gold trust ticker
symbol is IAU and that tracks the value of gold and that is represented by the
red line and notice that from early 2005 all the way through mid 2018 you might
think that stocks did better than gold nope as we can see here it did quite a
bit better at least according to these two ETFs
and this is from Google Finance com all right so we can see that the iShares
gold trust went up 200 percent while the Spyders the the s py or State Street 500
SP 500 ETF trust went up much less than that 100 about 126 percent
so precious metals often tend to hold their value better than stocks when
economic recessions and depressions occur therefore I feel and it's just my
opinion that it's not a bad idea to own a reasonable allocation of precious
metals when the stock market is extremely overvalued so when I feel that
stocks are too expensive or the stock market is just too high and possibly
bound for a correction or recession or a bear market that kind of thing when
stocks go down a lot what I may do is increase my allocation in precious
metals holdings gold silver that kind of thing but I will never over allocate I
will never buy more than I can afford and I will never put too much of my
portfolio into one thing including precious metals as much as I like them
I'm not going to over allocate into that or anything else all right so I hope
this gave you a perspective and some terminology some information that you'll
need to know about precious metals and especially gold and silver again if
you'd like some more help putting together a plan for your investing
because you really need to have one if you're investing without a plan then you
are really asking for problems so my name is David Modell my email address is
David Modell at gmail.com that's how you can contact me for more help and if you
like this video please give it a thumbs up on YouTube and leave a comment and
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so much I really appreciate it and I'll talk to you again soon
you