Buy Canadian Maple Leaf Gold Coins with rebate check?

2 Responses to “Buy Canadian Maple Leaf Gold Coins with rebate check?”

1. Aron R says:

   November 14, 2009 at 4:14 am

   One could glean several questions from your question above:

   1. Will the price of gold go up in the next 5-10 years? If so, how much?

   2. Is now (April 2008) a good time to invest in gold? If so, how much of my rebate check should I invest now?

   3. If I do invest in gold, what are the best ways to invest? Buying Canadian Maple Leaf gold coins, or?

   Whew! That’s a lot of questions, whether outright or implied!

   For starters, no one knows the answer to question 1. No one. We do know that gold went from $35 per Troy ounce in 1973 to (briefly) $850 in 1980, down to around $250 at a couple of points around 2001-03, up to $1050 recently, and is around $880 today, as of this writing. (These aren’t inflation-adjusted prices; roughly speaking, the $850 peak in 1980 corresponded to about $2,200 per Troy ounce in today’s dollars, which means that the gold price today is less than half the 1980 peak.)

   We also know that, over extremely long periods of time, gold has roughly retained its purchasing power in goods, but that there are periods, sometimes long ones, where it is a very good investment and periods where it has been a very poor one. Those experiences even vary by country, as in cases where a nation’s currency rapidly loses value due to capital flight, high inflation, or even hyperinflation.

   Finally, the gold price is volatile: even during its run-up from $35 to $850 over a 7-year period in the late 1970s, there was one case where it fell from $200 to $100 within about a one-year period from 1973-74, if memory serves.

   As with any other investment, you’ll need to look at this around your current and expected life circumstances: do you already have money in the bank, 3-6 months worth? Do you have high interest debt that you should pay back before making investments? Are you saving for any near term large purchases, like a car or house? Are you well insured against most common hazards, with car insurance, homeowners or renters insurance, health insurance and life insurance (if you have dependents)? All of these core considerations may take precedence over gold or any other investments.

   Most investment advisors suggest that one’s investments in precious metals - in all forms, including the stocks of the companies that mine them, be kept to 5-10% of one’s investable assets, and that’s not a bad guide for most individuals.

   As for the best time to invest, one option is to dollar-cost average into gold stocks. There’s one reputable mutual fund complex with two gold-oriented mutual funds that allows you to do so with just $100 up front and $50 a month:

   http://****usfunds.com/docs/html/abc_plan.asp

   That way, you won’t try to "time" the market - if gold mining companies’ shares drop, you’ll buy more shares, and if they rise, you’ll buy less, until you’ve allocated whatever amount you wish from your rebate check or otherwise. As well, they can do the work of picking stocks which, if you haven’t studied the sector, might take you some time to learn to the point of comfortably making your own investment decisions.

   If you’re seeking to have some modest protection from complete disaster - say, a failure of the banking system or hyperinflation - then owning a small amount of physical gold, such as some fractional Canadian Maple Leaf coins (e.g. 1/10, 1/4 oz.) might be a comfort, if you have a safe place to keep them.

   Lastly, if you’d like to learn more about what investment "experts" think about what will happen to the gold price, say, in the next three months, or over the next 5-10 years, you might start reading articles at these websites:

   http://****kitco.com
   (see the links in the "Contributed Commentaries" section, about mid-way down the home page)

   http://****321gold.com
   (see the links at top, under "Gold Silver $$$")

   But be advised: there are as many opinions as experts, and they are often contradictory .
2. raysor says:

   November 14, 2009 at 4:14 am

   I read somewhere that an ounce of gold will always buy a good man’s suit (good suit, not good man)
   Today’s price US$900 ish= £450= nice suit!
   1997=US$350=£220($/£ =1.6??)= nice suit
   I would prefer to buy Canadian Gold mine, with proven assets and at production stage. Don’t know any off hand but thet’s where the money is!