club_cafe: Re: Buying Gold

iras1 on

Buying gold is not a wise idea for many reasons. First is the problem of valuation. Gold bars will generally not be worth the same as gold coins of equal gold weight.

Second is the issue of taxation. Profits on gold are not typical short/long term capital gains. Gold is a collectible and as such the long-term capital gains are taxed at 28% (unless your marginal rate is lower), not 15%.

Third, historically gold and precious metals have been very poor investments.

Ira Smilovitz

In a message dated 11/17/2004 9:01:47 AM Eastern Standard Time, tkessler@bivio.com writes:

Wayne (03)Edwards wrote:
> Our club is exploring possibility of buying gold in order to
> balance our portfolio. Here's a question that came up in
> our meeting that I need some feedback on.
> If the club owns say 10lbs of gold(coins or bar) and a
> member wants to withdraw. The member requests to have some
> of their payout in gold. How can that be equally and fairly
> distributed?

Not sure what your club agreements says, but in most clubs,
the remaining members decide how to pay the withdrawing
member, cash, stock shares, in your case gold, or a
combination.

Garrett Call on

If you're really interested in pursuing gold, you should
look at GLD it is traded on the NYSE and it is a ETF and
each share represents 1/10th of an once in gold. A much
better alternative than trying to buy gold bars or coins if
you're interested in going that direction.

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