HP readers know that many of us are recommending gold as an investment. I myself haven't moved, as I'm not much of a risk taker, and feared losing my investment.
But, like a lot of you, I've got all this housing loot sitting in 4% to 4.75% savings accounts, in US Dollars no less, that need to go somewhere. Especially out of Dollars.
So, I've added a link as an advertiser to the right for the Everbank Gold Marketsafe CD closing March 21st. I'm going to be investing in this myself. Their CD closes on March 21st, so if you're interested do it soon. I'm interested in your comments, as I haven't decided how much of my cash I will invest here yet.
Here's the program. Let's say you put $10,000 in the 5-year CD, with gold trading today at $550 an ounce. They then have 10 semi-annual prices set during the 5 years, let's say gold over the next 10 6 month periods goes up $50 a period. They then take those prices, average them out, and that's your gain percentage. Even if it falls back 5 years from now, you gained those benchmark increases in your average number. Make sense?
Let's say though that gold DROPS from $550 an ounce, to $200 an ounce, over the next 5 years. We were all completely wrong.
Then you get your $10,000 back.
True, you lost the interest gains you would have gotten if you kept it in a savings account. But for those of you interested in speculating in Gold, an interesting way to go - buy the future of the metal, as well as protect yourself against a dollar decline, without risking your investment.
Take a look and let us know your thoughts - or if you're investing.
March 08, 2006
Worth a look: Play gold without risking your investment - what do you think?
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26 comments:
looks interesting. you are risking the interest you'll be walking away from, but if you're interested in gold or hedging against the dollar, while sleeping at night and not sweating ups and downs of daily spot gold price or dollar...
buying gold now is like buying tech stocks in feb 2000...you missed the boat...
sky - that's my thinking too - and why i haven't invested
but.. with this offer - I could put some into gold, say 10% of my cash, and not have to worry about losing the investment, but capturing any gain
that's why I'm liking this idea. even if gold goes to $10 an ounce, I'm still doing alright
oh, and i'm REALLY thinking the dollar is about to tank too
but not being a currency trader, not sure of a safe haven to protect against the dollar decline
nothing more stressful than living in europe and worrying about the dollar tanking.
thus the shiny stuff
When Ben chooses between saving the dollar or propping up the housing bubble what will he do?
Just think of all the Corporations such as Microsoft, IBM, Citigroup etc… sitting on ALL THAT CASH.
41cadillac
looks like they are buying options on gold and resetting them every 6 months. It reminds me of an indexed annuity. I would see the propsectus prior to investing.
In my opinion, if you want to own gold, buy gold or a gold fund. If you want a CD , buy a CD. Don't confuse the two.
There is never a "bad" time to buy a small amount of physical gold or silver. Buy some junk (pre 1964) silver coins or 1/10 oz gold coins from the U.S. mint. The beauty of these coins is their value can never fall below the face value should gold or silver prices tank, or a future administration fixes a ridiculously low price.
As for investing in metals, start averaging in even at today's prices. Central Fund of Canada (CEF) is an excellent choice because 1) it's outside the U.S., and 2) Canadian law requires all shares be backed by physical metal. That is NOT the case with the ETFs recently set up on Wall Street to flim flam gullible investors.
Give me $10,000 and at term I will give you $10,001. There, I just beat their deal.
is the blog made up of jamokes from the mid-west who own flat screens, SUVs and do crystal meth...? 50k a year...100k in the bank..? middle america...what has it come to....
no flat screens
no h2 hummers
no debt
no house
I think the blog is made up of more than a few conservative folks who reject "the lifestyle" of debt and consumerism, who sold their house and now rent, and who are sitting with $$$ in 4.5% savings accounts, gold and TIPS bonds
true?
I think the blog is made up of a bunch renters who are jealous of those around them who have homes and are trying to justify why they don't have one too.
Facts:
70% of Americans Own Homes - Their average net worth is $185,000 (yes this includes their home equity)
30% of Americans Rent - Their average net worth is $4 GRAND.
I don't people on this blog have $10,000 to invest in gold. They are better off saving their cash for a down payment on a home, whether it is today, tomorrow, or 5 years from now.
Robert Reich says RENT!
Oh, and the dollar will collapse:
http://news.com.com/Reich+U.S.+headed+for+day+of+reckoning/2100-1022_3-6047237.html?tag=nefd.top
Bankrate may be making a bold prediction on the direction of interest rates.
It’s gotta be a mistake, but the Home Equity loan graph shows interest rates on 50k spiking to 21.38% from 7.79% last week. I’m sure somebody out there with an 80/20 got an ulcer from it.
http://img104.imageshack.us/img104/3821/picture15ve.png
Mortgages for housing continues to get more expensive. "WORLDWIDE"
By Ellen Simon, AP Business Writer
Dow, Nasdaq Fall As U.S. Government Bond Yields Remain at Uncomfortably High Levels
NEW YORK (AP) -- Stocks fell Wednesday as U.S. government bond yields remained at uncomfortably high levels, exacerbating investors' worries about interest rates. The Standard & Poor's 500 index declined for the fifth straight session.
Investors sold off stocks as the yield on the 10-year Treasury note stayed unchanged at 4.74 percent, the same yield as late Tuesday. Bond yields have recently been trading at their highest levels since June 2004.
Investors also are afraid that central banks in Japan and Europe will hike interest rates even as the U.S. Federal Reserve is expected to continue its own streak of interest rate hikes, which could take rates past investors' hoped-for levels. The Bank of Japan began a two-day meeting Wednesday that many investors believe could mark the beginning of Japanese rate hikes.
Wall Street worries that rising interest rates could make loans harder to get for consumers and businesses, slowing the economy. At the same time, higher rates can make bonds a more attractive investment than equities, draining money away from stocks.
Interest rates are "the No. 1 issue on investors' minds right now," said Brian Bush, director of equity research, Stephens Inc. "Without some overriding positives, that's going to continue to weigh on the market in the near term."
They normally open up a new Gold CD window each month. However, the S&P 500 CD is not always available. I was lucky enough to get a secondary market S&P 500 5yr CD that was already 2yrs mature. It has a 103% guaranteed return (105% to original issuer minus 2% forfeit), so it's a no brainer for me on risk/reward (the value was already 113% when I took it). S&P 500 has a better 5yr track record than gold.
I know gold will spike up in the next few years, but I want to exit out of position on the run up. Metal timing could be important like it has been in the past.
Gold and housing.
Differences:
1) Liquidity is now electronic and instant for gold; real estate freezes.
2) total capitalization of gold market much smaller than total capitalization of housing value
3) You can't live in gold, and you can't eat it.
4) Most people don't have to pay property tax on gold and didn't buy it leveraged on credit. Gold doesn't bust its plumbing and doesn't need new roofs.
5) Petro sheiks and Chinese tycoons and banks don't want to put their wads of money in San Diego condos any more.
6) Mass-market books about "how to be a real estate millionaire", blah blah blah. Not many about, "How to be a millionaire from gold trading".
Similarities:
1) Parabolic upward curve.
I would be a little careful of trading gold with sophisticated paper instruments. Everbank doesn't own any gold and is likely just buying into paper gold obligations. Remember that there is an estimated 250 trillion in derivative instruments in circulation at any time. And many of these gold obligations may be hedged with unstable derivatives.
I would be a little careful of trading gold with sophisticated paper instruments. Everbank doesn't own any gold and is likely just buying into paper gold obligations. Remember that there is an estimated 250 trillion in derivative instruments in circulation at any time. And many of these gold obligations may be hedged with unstable derivatives.
It seems like they are limiting the upside... and there are also pretty large fees. Can anyone make sense of it? If gold rises in 5 years, you could make 6%, 7%? After fees, of course. And then you have the tax consequences. If you must invest in this product, I would do it in an IRA.
I think the "gain or not lose" characteristics of this (and similar) investments, along with an unpredictable market, makes them a very subjective choice.
Some analysis on this here - http://ifinance101.blogspot.com/
I have been following a site now for almost 2 years and I have found it to be both reliable and profitable. They post daily and their stock trades have been beating
the indexes easily.
Take a look at Wallstreetwinnersonline.com
RickJ
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