Why not platinum too?

[Pointedstick]

Seeing as how platinum is higher than gold right now and seems like a pretty good buy, I'm wondering if anyone is considering using any platinum in the gold part of their PP. This is not something I'm actually considering, I'm just kind of wondering out loud. Is platinum any worse a hedge against inflation/government mismanagement/banking shenanigans compared to gold?

[rickb]

Platinum and silver and palladium all have significant industrial uses which makes their price act very differently than the price of gold.  Only about 10% of gold that is mined is consumed for industrial purposes.  I don't have exact numbers handy but significantly more of the platinum (much more than half), silver (perhaps only slightly more than half), and palladium (maybe 90%?) that is mined is consumed for industrial purposes.  The relative lack of industrial uses is one of its attributes that makes gold so uniquely suited to be used as "money".  It's rare.  And pretty much nobody wants it for anything other than its ability to just sit there, being the same lump of gold it was yesterday or a thousand years ago.  It's pretty, too - but this is really just an incidental bonus.

[dualstow]

Platinum is neat, but adding to what rickb said, I think it would be more difficult to unload platinum(not liquid). With gold, you can walk into the shop and walk out with cash. It's probably best to keep it simple. Harry already shaved silver off the list. Admittedly, this was before the price of gold shot up past platinum, but I doubt he'd see a reason to add platinum.

It might be fun to collect a coin or two outside the pp.

[Storm]

One thing to keep in mind regarding platinum, like rickb said, is the industrial uses.  Platinum is used very heavily in manufacturing things like hybrid cars, consumer electronics, etc.  So, you could definitely end up in a market cycle where demand for expensive hybrid cars, iPads, and iPhones drops, and there is an oversupply of it.  Gold might rise in value while platinum fell because the industrial demand dropped off a cliff.  This is the same reason why silver is not a very good proxy for gold in the PP.

[Reub]

I recently found out that my Toyota has THREE catalytic converters so now I am considering platinum as an investment. 

[Greg]

I recently found out that my Toyota has THREE catalytic converters so now I am considering platinum as an investment. 

THREE? We're they just cat happy or are the fumes from the Toyotas that bad that they need 3 cats to clean everything up. Those Toyotas must be pumping out straight up death when it gets into that first cat hah.

[Reub]

I replaced one of the cats to pass my emissions inspection and now the check engine light is on again showing that one of the other ones is bad as well. So expect the price of platinum to keep rising as I keep replacing cats.

[Greg]

I replaced one of the cats to pass my emissions inspection and now the check engine light is on again showing that one of the other ones is bad as well. So expect the price of platinum to keep rising as I keep replacing cats.

So you alone will be manipulating the price of platinum with purchasing cats? Are you by any chance related to the Nelson Hunt?

[Reub]

Who told you?

[Greg]

Who told you?

My financial advisor saw it in his tea leaves. He is very prophetic and I trust him with my life.

[Greg]

Ecclesiastes 11.2 : Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.

So gold and platinum then 

...with perhaps both T-Bills and IBonds

Domestic and Foreign Stocks

TLT and EDV

Clive,

Would you consider if you were holding two different precious metals to hold gold and platinum instead of gold and silver? I know at least silver has had monetary uses in the past as well as industrial uses. Not as sure about platinum and how it reacts to different economic conditions. My guess it is a bit like silver since it has more industrial purposes than gold does.

Not sure of which would better though as a second precious metal holding for the purpose of what they are supposed to do in the PP.

[Greg]

Broadly, gold and silver have moved in somewhat similar long term motions



I was jesting with that earlier posting. I'm not the one to ask as I totally sold out of physical gold a couple of years back at around $1250 levels. I also dumped a large chunk of stocks in March (an early sell in May this year) - mostly just in cash (multiple currencies) now and likely won't be back into the market until the end of the summer holidays.

Interesting take on your portfolio. So are you not in the category of consistently holding items such as the PP, but you like it more as a theory? From your other posts it looks as though you are trying to find better investing opportunities or different ways to think. I think those thoughts are invaluable to this forum and add to the richness that is this forum.

[Lone Wolf]

I worked in programming and system security into my late 30's before dropping out of the rat race and having lived off investments since (now approaching 52). My approach has been to put a lump sum aside to support a number of years income (inflation type investments that I draw upon/down) and a growth pot of around twice the initial income pot size that I look to grow at around 4% real. Somewhat risk adverse I've mostly used a low-down, timed/value with momentum type approach for that growth. I had somewhat planned to take some time out and return back into the rat race for one last accumulation push to perhaps be able to live off inflation bond type returns, but 2008 more or less put an end to that. Computing is a younger man's field and whilst getting back in in your late 40's might just be viable, pass the big five-oh and you're more or less out for the count. Instead it looks like I'll be stuck with having to look for returns via less certain 4% real type methods.

I love all this interesting background info, Clive.  Congratulations on 15+ (??) years living completely on your own terms.

Did you reach some particular accumulation level in your late 30s that led you to drop out or did you just sort of "go for it" and figure things out from there?

I know a few very good programmers that have stayed active into their early 50s.  If you still have urge to sling code, perhaps you could spend a few hours freelancing every day or pursuing your own projects.  Even if it didn't pay the big bucks it could serve as a nice supplement to your investment income (which sounds like it is substantial.)

[MachineGhost]

Seeing as how platinum is higher than gold right now and seems like a pretty good buy, I'm wondering if anyone is considering using any platinum in the gold part of their PP. This is not something I'm actually considering, I'm just kind of wondering out loud. Is platinum any worse a hedge against inflation/government mismanagement/banking shenanigans compared to gold?

Why not Palladium?  Or Rhondium?  Or the rare earth metals?

None of them were historically used as money.

[Greg]

Clive,

Thanks for the nice read. It was quite interesting. As for myself, I'm on somewhat of the other end of the spectrum. I'm 24 currently and fully in accumulation mode. I'm overweight in stocks right now but trying to get towards the PP but probably willl have the PP with a VP of maybe 80/20%.

I think this forum (and others as well) are very helpful in forming new opinions of what investing is really all about. I also find it as an invaluable resource for bouncing investing ideas off of others to see if they can hold water or not.

It'll be a fun couple o' years. Good luck with the computing stuff if you choose to go back in to the rat race. Hopefully then you'll be able to take that rat race and find a large chunk of cheese in it.