Having traded and speculated in gold for 22 years I can assure everyone that most that trade gold lose a lot of money.
Gold has huge price swings. Gold mining stocks massive price swings. Just go look at the 5 year charts! Everyone tends to "pay their dues".
Then there is the suckers gold ("paper gold") which is merely a promise on top of counter party promises after counter party promises since far too often the gold is loaned and re-loaned out to others in various funds, or merely own by way of derivatives with their own counter party risks. And that doesn't even touch possible trustees stealing it, or gold seizures by desperate governments on rare occasions.
There are a lot of fools that suddenly think gold is so wow, much cool, bla bla. It's just merely another commodity to trade, buy low, sell high, and a strong LONG-TERM store of value. But it's a terrible medium of exchange. And it's not a good short term to medium term store of value either. Bitcoin too is not a good "short term" (less than 12 to 18 months) store of value. Medium term I believe Bitcoin will prove to be the very strongest store of value during the next few years time. Or fade away. I am strongly in Bitcoins. I could be in anything. I choose Bitcoins for my currency of choice, my main safe haven of choice, and my current major long term investment. Others giggle now, I will likely be the one laughing from the beyond later, if not before.
Gold belongs in every portfolio of any decent amount. But only from 2% in the best of economic times, and up to 5% in other more typical economic times. That's proper portfolio theory.
But lately of course, over the last several years there were many points where up to 40% of one's portfolio should have been switched to physical bullion in one's own possession and control (tell absolutely no one though) if they were keenly savvy about gold and the macro economic big picture. Very few have that talent. Of course then rotating out quickly out as prices surge by way of taking profits before the momentum runs out. But trading involves taxes, the USA treats gold as a 'collectible' and none too kindly yet it's claimed by some that US gold eagles are 'not reportable'. Always check with your tax adviser or CPA.
Today gold is a fair value at it's current spot price of $1245, but I am not rushing out to sell any bitcoins for more gold. Today Bitcoin's value is much likely to far outpace gold over the next several years, much as it has done already. If one doesn't understand why then one doesn't understand Bitcoin nor gold. If Bitcoin was at $3600 then I would be switching some over to $1245 one ounce gold coins (taking some profit).
Gold is tremendously manipulated. That was denied forever. The Central Banks and others will continue to grossly manipulate gold prices and suppress them to hold it's value down all to keep fiat currencies values inflated as possible. Odds are gold goes much higher than today during the next decade. But any global crash like 2008-2009 could easily see gold fall back to the $1000 or even $850 or lower levels. Of course people tend to panic (sell low) and (buy high). Most get it wrong. Don't have patience. Want to rush in. Only fools rush in.
Today Bitcoin is a buy. Gold is a hold. Figure that out. Don't panic sell unless you must raise money for current expenses. And if you do, then you didn't have any emergency savings most likely. In other words one had no business in either unless cares to speculate (gamble) which is fine if one cares for the risk levels being quite large in the short term.
2001 was the time to push all into gold strongly, and stay in firmly all the way up to 2011 or maybe as far as 2012. A few of us pushed in, and told others to push into gold in 2001, and keep buying all the way up to $1000 strongly. Today many forces are working against gold pricing. Later the ball will very likely swing back in favor of gold, maybe extremely soon, maybe not...
Today the better gold mining shares now are a much, much better value than physical gold bullion (buy low, sell high...). Anyone disagreeing with any of the above is touting pure rubbish and nonsense. Guessing is for losers.
Bitcoin is everything a currency is thought of plus Digital Gold 2.0 - bitcoins are vastly superior to any and every fiat currency. And unlike gold only 21 million bitcoins will ever be produced. In other words it has what gold doesn't, it's extremely rare per bitcoin.
I have been a gold bug, a long term gold bug as we're referred to. But not a foolish one. I also advised another person very dear to me on trading gold for the last 22 years. I am offering the same thoughts here as I did and do there.
Then came Bitcoin in August 2011. Fast forward to October 2012 and finally it bit me. By Early 2013 I was in Bitcoin full bore. I have spend a great deal of time learning everything I could about Bitcoin. Since the 1980's I long since have been a student of capitalism and macro economics. I have studied the markets for over two decades now. This is a passion for real capitalists and traders alike.
My Conclusions:
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Hands down Bitcoin is the superior store of value compared to gold for the short term speculator that understands technical trading analysis. It's also hands down the most LIKELY best longer term investment over the next several years too. But there is also very high risk of major losses, or even 100% losses should for whatever reason Bitcoin fail.
After reviewing, mining, owning, trading, and storing Bitcoin, reviewing the math and science of Bitcoin and it's very foundation and whats apt to be it's future it appears as sound as it can get.
I don't fear having much in bitcoins. In fact this likely to be 'the biggest transfer of wealth' ever per Sir Richard Branson (the Virgin Brand, Billionaire). I too believe this. Lots of money will be made and lost in Bitcoin. Buy low, sell high, keep selling higher, take profits. Repeat.
Or safer still buy now or soon on the technical lows or midrange, and don't sell for several years. Then be all smiles, or write it all off on taxes. It's very likely there there is no bad time to purchase and hold bitcoins in 2014 or 2015, but if one buys at the peaks then one will be forced to stay in for up to or more than a year to very likely have realized profits.
Don't dare risk what one cannot afford to lose. For that type of fund only cold hard cash or maybe with a splash of gold added to the cash would be far safer. Have a 6 month emergency fund. The banks currently pay next to nothing, and only offer an IOU of paying you back at a later date and usually on their terms, maybe not your terms. That's a terrible risk. Interest rates should be paying more than 10% today. There not. The banks and governments can't afford their debts so they steal from everyone else including slashing interest to near zero.
After that is met (emergency fund) then build a portfolio of savings and investments.
If one cares to gamble on a smaller number of bitcoins with some of that emergency fund I see nothing wrong with doing such a thing. In fact they could end up paying for a down payment on a home or pay for a new car in a few years time if all goes very well.
10% of any portfolio invested in Bitcoin's this year would be prudently wise. If one should lose it all, it's not a disaster. Much the same for gold too.
Today 20% allocated 50/50 into bitcoins/physical gold bullion, both held in your own possession and control (not in others) is extremely wise for every portfolio above 6 months worth emergency funds. Just don't risk much of those emergency funds on Bitcoin or Gold.
We don't know what the near future will be. The worlds biggest debt bubble and financial panics are far from over. We don't know what the powers at large will resort to but common wisdom suggests they will inflate their way and governments way's out of debt. That means extreme inflation IF true. But sometimes it doesn't work out that way. Lately it has been a mixed bag of both inflation in some sectors and deflation in others. All while wages keep falling and job losses keep rising. Forget the official figures, their wrong, their lying out their crooked false teeth. Something(s) have to give way or maybe everything gives way. We can't borrow our way out of too much public debt. Neither can banksters. Many/most will lose a lot of wealth. The smartest money long since shifted into hard assets.
Get a grip people. I believe every person should own at least one bitcoin by now. It's extremely foolish not to own a single bitcoin by now. Interestingly there isn't nearly enough to go around. Some day people may say 'only the super wealthy own a whole bitcoin'. It could turn out that huge. Or not. It all depends.
Bitcoin is The Strongest Store of Value as of Today. But it may or may not stay that way. Right now it's a real good time to buy bitcoins at $650 each. The market is presently signalling that the $400 to $700 current trading range may be swiftly broken at any hour or day now. We may soar right back up to $900, or $1000, or even hit all time highs in merely a few more weeks time. Many major deep pockets are still mulling over Bitcoin. Wall Street is licking their chops over Bitcoin. People, including many very wealthy people the world over are currently sizing up Bitcoin.
Forget about what the gold bugs and the bears all cry about. Their usually a miserable bunch of losers and whiners anyway. I just handed you what I have learned. Now go learn some more about Bitcoin.
https://bitcoin.org/bitcoin.pdfhttp://nakamotoinstitute.org/literature/
