It's looking grim again. Is gold the would-be saviour?
Discussion
jeff m2 said:
Gold may be a hedge for a Dollar investor, not so much for a Sterling person.
Surely a bit in a balanced (long) portfolio makes for decent diversification/risk spreading?As for Obama, he's surely bad news for USD/US economy, even if he is a good figurehead for getting stuff done (i.e. killing Bin Laden) without the rest of the qorld getting too uppity at the big bad white, world police. So the former point drives commodities.
Digga said:
jeff m2 said:
Gold may be a hedge for a Dollar investor, not so much for a Sterling person.
Surely a bit in a balanced (long) portfolio makes for decent diversification/risk spreading?As for Obama, he's surely bad news for USD/US economy, even if he is a good figurehead for getting stuff done (i.e. killing Bin Laden) without the rest of the qorld getting too uppity at the big bad white, world police. So the former point drives commodities.
Grim, to take the word from the title of this thread, is possibly the time to take a look at equity positions.
IMHO Gold is not an investment that will make you money, it is more often used to maintain a position that one has reached. A person might then buy gold to tread water so to speak.
Interest rates, we are told, will remain low 'til '14, but when we get some GDP growth along with inflation, interset rates will rise.....when that happens gold is not the place to be.
I think people sometimes get out of phase with what is actually happening, by out of phase I mean behind. A particular sector performed well last year etc etc. Let's get a peice of that. They buy high and then when it drops a little they are reluctant to sell and miss out on groeth in some other region or sector.
A possible compromise might be to consider 5 to 10% in a commodity fund, let them decide when to ditch the gold futures and jump into oil,gas etc etc when growth happens (in China)
Commodity funds did have a nice run this year but have recently backed off a little. A possible buying op!
Big disclaimer.....I am not a professional but the contents of my fridge are tied to me not getting it too wrong.
Maybe Donkey A will add his two penneth.
Digga said:
Surely a bit in a balanced (long) portfolio makes for decent diversification/risk spreading?
As for Obama, he's surely bad news for USD/US economy, even if he is a good figurehead for getting stuff done (i.e. killing Bin Laden) without the rest of the qorld getting too uppity at the big bad white, world police. So the former point drives commodities.
As part of a balanced portfolio then it's been an important holding on the long side since the crunch. As for Obama, he's surely bad news for USD/US economy, even if he is a good figurehead for getting stuff done (i.e. killing Bin Laden) without the rest of the qorld getting too uppity at the big bad white, world police. So the former point drives commodities.
The problem is that for most retail punters they are over exposed and with the wrong asset type. This means they have huge default risk and have bought in heavily off side.
jeff m2 said:
Grim, to take the word from the title of this thread, is possibly the time to take a look at equity positions.
IMHO Gold is not an investment that will make you money, it is more often used to maintain a position that one has reached. A person might then buy gold to tread water so to speak.
Interest rates, we are told, will remain low 'til '14, but when we get some GDP growth along with inflation, interset rates will rise.....when that happens gold is not the place to be.
I think people sometimes get out of phase with what is actually happening, by out of phase I mean behind. A particular sector performed well last year etc etc. Let's get a peice of that. They buy high and then when it drops a little they are reluctant to sell and miss out on groeth in some other region or sector.
A possible compromise might be to consider 5 to 10% in a commodity fund, let them decide when to ditch the gold futures and jump into oil,gas etc etc when growth happens (in China)
Commodity funds did have a nice run this year but have recently backed off a little. A possible buying op!
Big disclaimer.....I am not a professional but the contents of my fridge are tied to me not getting it too wrong.
Maybe Donkey A will add his two penneth.
This is very relevant. Gold is a tool to protect part of what you already have. It's difficult and high risk to use as a tool to accumulate new wealth. IMHO Gold is not an investment that will make you money, it is more often used to maintain a position that one has reached. A person might then buy gold to tread water so to speak.
Interest rates, we are told, will remain low 'til '14, but when we get some GDP growth along with inflation, interset rates will rise.....when that happens gold is not the place to be.
I think people sometimes get out of phase with what is actually happening, by out of phase I mean behind. A particular sector performed well last year etc etc. Let's get a peice of that. They buy high and then when it drops a little they are reluctant to sell and miss out on groeth in some other region or sector.
A possible compromise might be to consider 5 to 10% in a commodity fund, let them decide when to ditch the gold futures and jump into oil,gas etc etc when growth happens (in China)
Commodity funds did have a nice run this year but have recently backed off a little. A possible buying op!
Big disclaimer.....I am not a professional but the contents of my fridge are tied to me not getting it too wrong.
Maybe Donkey A will add his two penneth.
If your existing wealth is pegged to the USD then a hedge with gold in theory will protect from some of the massive devaluation of the USD. Or any currency that is currently being devalued to try and pay off excessive debt.
Gold is a worthless investment as it not only does not yield but costs to hold. It is wholly inappropriate. Which is why the moment yielding assets show clear upside capital value there will be a strong and steady switch back out of gold.
Many retail punters have piled into what will transpire to be non asset backed Ponzi schemes or over priced physical holdings (delivered) because of doomsday pitches from spank shop brokers. In the event of a doomsday event one of the first major actions that will occur will be the exchange of this gold for lead.
If being held to protect against the devaluing of cash savings and their zero yield then rarely are the sums run to evaluate whether the cost of switching to gold and then the exit is less than the deflation risk and positive yield of the currency. Let alone factoring the exchange differential risk.
It is a very complex investment tool that vast numbers of Charletans and snake oil salesmen have managed to make sound all too easy and safe.
The joys of unregulated markets and how they attract all the people who are not legally permitted to ever operate in a regulated market again.
It definitely has a place and role and an important one but many, many people have been cruelly mislead and will lose a lot of money.
Digga,
A lot depends on where you are in your investment life and what your objectives are.
Don't answer that of course here.
On my bond side I have a mixture of Emerging Market bonds Dollar and local currency, some high yield (which includes Bs) and Munies. And I'm taking a look at short term TIPS to replace the HYs.
Political risk...fiscal cliff.
Obama won the election and of course he wants to allow the Bush tax cuts to expire. He had four years during which time the B tax cuts were extended !!! so a lot of it is saliva.
Is it a dogdy situation, sure, Bayner sees it is his resposibility as leader of the Republicans who gained extra seats to fight for keeping the cuts as letting them end will surely trigger a down grade for the US. Neither Baynor or Obama want that to be their legacy (one would hope)
So IMO it will get avoided.
But it will be close and very last minute and will create havoc in the markets until it is done.
I think the smart money will position itself for it to get done and that will not be gold in any form.
I'm basically a "sit tight" ride it out person, as I am a US resident, my concerns are more towards getting all my cap gains taxed at current rates, than letting them go forward into Obama second term where I'll get clobbered. Something I took care of weeks ago
I like REITs at present, US and global on the equity side. They have performed well for years.
If you are younger than me, most are
, get yourself a balanced fund for a core investment, then find a volatile fund from a good house that's been hit and trickle feed it. The most important thing to remember re investment is never be late to the party.
You'll either buy too high or get the one with glasses.
Digga said:
y this, you mean non-physical or ETF?
Non stored physical mainly but there will be lots of schemes out there that claim to be asset backed when they aren't, unless you count the owners new house in the Bahamas. ETFs are a logical way to create portfolio exposure as they are backed and the clearing costs are low as are the costs to hold.
jeff m2 said:
...find a volatile fund from a good house that's been hit and trickle feed it.
The most important thing to remember re investment is never be late to the party.
...
Presumably by hit you mean underperforming?The most important thing to remember re investment is never be late to the party.
...
And by both comments I'm guessing you're talking about reversion to the mean? That in the long term few funds over or under perform?
Digga said:
jeff m2 said:
...find a volatile fund from a good house that's been hit and trickle feed it.
The most important thing to remember re investment is never be late to the party.
...
Presumably by hit you mean underperforming?The most important thing to remember re investment is never be late to the party.
...
And by both comments I'm guessing you're talking about reversion to the mean? That in the long term few funds over or under perform?
A volatile fund will drop faster and recover faster, hence the reason to trickle feed as nobody can really know the bottom. Of course you would wait until it is down before you start. Even if it keeps dropping you will be lowering your av purchase price. When it does turn the corner you will already have a nice position, just keep feeding til the av PE of the fund reaches it's norm. Then just treat it like any other asset.
So in the US I would look at two sectors Tech and Healthcare (and possibly banks) both are very "up" so if anything hits the fan these stand to drop more than something that is "average". Not because they underperformed but because they are currently high. The fundermentals of the companies within these funds doesn't change but there is a flight to safety, people grab their gains and run.
This creates an op for those that are prepared.
The object is to buy knocked down quality.
An interesting week for gold.
Major currencies fell, gold did not climb.
Major indices sold off, gold did not climb.
FOMC meeting and various bad data from the US, gold did not climb.
The recent downtrend in gold has catagoricaly been about a reallocation of assets as portfolios sought to lower gold holdings which yield nothing, has had little positive price momentum recently and in a market which has seen default risk diminish and switch into assets such as equities as they reach new short term highs.
This looks like it has all been driven by ETF sales as I predicted.
Also, I firmly believe that most of the physical gold schemes for retail clients will transpire to be ponzis and the first arrests were made the other week on a precious metal scam.
Major currencies fell, gold did not climb.
Major indices sold off, gold did not climb.
FOMC meeting and various bad data from the US, gold did not climb.
The recent downtrend in gold has catagoricaly been about a reallocation of assets as portfolios sought to lower gold holdings which yield nothing, has had little positive price momentum recently and in a market which has seen default risk diminish and switch into assets such as equities as they reach new short term highs.
This looks like it has all been driven by ETF sales as I predicted.
Also, I firmly believe that most of the physical gold schemes for retail clients will transpire to be ponzis and the first arrests were made the other week on a precious metal scam.
Very interesting indeed.
Gold be down at this level twice since the high of 1900, and has revived both time to a healthy 1780ish.
I'm still fairly optimistic about it, and it's certainly worked well for me personally thus far.
I think the basic economic conditions that have driven gold up thus far, remain the same. No doubt that it's tougher for gold to still performs as it has the last ten years...
Gold be down at this level twice since the high of 1900, and has revived both time to a healthy 1780ish.
I'm still fairly optimistic about it, and it's certainly worked well for me personally thus far.
I think the basic economic conditions that have driven gold up thus far, remain the same. No doubt that it's tougher for gold to still performs as it has the last ten years...
Personally I don't think the economic conditions are the same. I think investors are moving out of gold holdings and back into equities, hence the ETF sales and the ever rising equity markets. They haven't succumbed to printing Euros and there is a perception of greater banking stability.
My opinion is that the downturn is well and truly over and has been since last Autumn and it will take a big event to halt this now. Property rising, employment rising, equities rising. We still have over leverage and devaluations as well as shaky banks but I think we'll look back in a few years and realise that the end of 2012 was when expectations were finally rebased to the new reality.
Wage inflation is our big risk over the next couple of years.
My opinion is that the downturn is well and truly over and has been since last Autumn and it will take a big event to halt this now. Property rising, employment rising, equities rising. We still have over leverage and devaluations as well as shaky banks but I think we'll look back in a few years and realise that the end of 2012 was when expectations were finally rebased to the new reality.
Wage inflation is our big risk over the next couple of years.
Guam said:
DonkeyApple said:
An interesting week for gold.
Major currencies fell, gold did not climb.
Major indices sold off, gold did not climb.
FOMC meeting and various bad data from the US, gold did not climb.
The recent downtrend in gold has catagoricaly been about a reallocation of assets as portfolios sought to lower gold holdings which yield nothing, has had little positive price momentum recently and in a market which has seen default risk diminish and switch into assets such as equities as they reach new short term highs.
This looks like it has all been driven by ETF sales as I predicted.
Also, I firmly believe that most of the physical gold schemes for retail clients will transpire to be ponzis and the first arrests were made the other week on a precious metal scam.
The only "physical gold" anyone should trust is that adorning the wife, or the Coins in your safe deposit box Major currencies fell, gold did not climb.
Major indices sold off, gold did not climb.
FOMC meeting and various bad data from the US, gold did not climb.
The recent downtrend in gold has catagoricaly been about a reallocation of assets as portfolios sought to lower gold holdings which yield nothing, has had little positive price momentum recently and in a market which has seen default risk diminish and switch into assets such as equities as they reach new short term highs.
This looks like it has all been driven by ETF sales as I predicted.
Also, I firmly believe that most of the physical gold schemes for retail clients will transpire to be ponzis and the first arrests were made the other week on a precious metal scam.
If you cant bite it it aint physical Regulated, asset backed ETFs are the logical portfolio choice.
But, as physical gold is an unregulated market and one which Daily Mail readers have the horn for then it is a market that is littered with every spank shop criminal in the UK. When true stability returns and gold sells off properly then all these scams will be discovered, just like all the ones for land banks, wine etc.
This is a good site for buying physical gold and the prices are keen. http://www.goldline.co.uk/gold-bars.page
I've bought from them before and you can buy from 2.5grams to 1kg bars.
I've bought from them before and you can buy from 2.5grams to 1kg bars.
DonkeyApple said:
Buying is never an issue. Just selling.
ebayFor some reason people will pay over the odds on ebay for gold. There are those buy from the link I stated above, add some random number and then sell it on the bay for a profit.
I had a guy came by the house to pick up a pile of investment bars he bought and paid for, from me, on ebay.
Here's a 20gram bar sold for £906 on ebay 3 days ago:
http://www.ebay.co.uk/itm/20-GRAM-PAMP-PURE-24CT-G...
And here's 20grams of gold from Baird at £698.25 today:
http://www.goldline.co.uk/goldBars.jsp?goldBarIdx=...
Tidy little profit...
jshell said:
DonkeyApple said:
Buying is never an issue. Just selling.
ebayFor some reason people will pay over the odds on ebay for gold. There are those buy from the link I stated above, add some random number and then sell it on the bay for a profit.
I had a guy came by the house to pick up a pile of investment bars he bought and paid for, from me, on ebay.
Here's a 20gram bar sold for £906 on ebay 3 days ago:
http://www.ebay.co.uk/itm/20-GRAM-PAMP-PURE-24CT-G...
And here's 20grams of gold from Baird at £698.25 today:
http://www.goldline.co.uk/goldBars.jsp?goldBarIdx=...
Tidy little profit...
When the proper reallocation starts there are going to be some tears.
jshell said:
DonkeyApple said:
When the proper reallocation starts there are going to be some tears.
Vampire squid doesn't like gold anymore: http://www.bloomberg.com/news/2013-02-26/gold-s-cy...
Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff