What's the best way to invest in gold?
Discussion
I'd like to invest in gold and would prefer the following set-up:
- NOT leveraged as I don't want a small market move against me to wipe me out, so forget spread betting, etc.
- I'd prefer NOT to take physical delivery of the gold.
- All dealings to take place online.
- Obviously needs to be a reputable company that won't vanish overnight.
It’s a difficult one. If you pay for storage then you have a negative yield and never know when you’re going to discover there was never any gold in the first place. If you take delivery then when you come to sell you will get chipped on the bid.
It’s total bandit country and you have to be very careful indeed.
Personally, I view it as only appropriate as a small part of a much larger portfolio but it’s always been tremendously popular among small investors like penny shares are.
It’s also not done anything for 5 years and almost all gains are actually through the FX exposure and gold is a hugely expensive and inefficient way to trade cable which is what almost everyone is doing without realising it.
It’s total bandit country and you have to be very careful indeed.
Personally, I view it as only appropriate as a small part of a much larger portfolio but it’s always been tremendously popular among small investors like penny shares are.
It’s also not done anything for 5 years and almost all gains are actually through the FX exposure and gold is a hugely expensive and inefficient way to trade cable which is what almost everyone is doing without realising it.
Derek Chevalier said:
I don't understand what purpose it serves in a portfolio. Is it tin hat protection?
Easily hidden from third wife, Handy for skipping the country when the law finally closes in. Can be parcelled off with an ugly daughter to get her sale away. Wild fowl shooting where lead shot is banned. Weights for impressing your personal trainer. Lots of perfectly sane uses for a bit of gold.
Doofus said:
The one thing I (think I) do remember is that coins aren't subject to GCT, but bullion is.
As I read it, it's down to whether it is legal tender in the UK. Sovereigns are, so they're not subject, but Krugerrands are not, so would be subject to CGT. Not sure about bullion.I have used BullionVault to buy and hold over recent years, cashed as needed a mortgage deposit last year.
There are monthly fees, but buying was fast and selling also. I think funds where available within 1 hr, and withdrawal within 10mins-2hours if I am not mistaken.
You can choose where to locate the holdings something like Swizterland, US or London.
It served my purposes as a hedge and I was lucky to have bought when it was cheap. The fees do add up if holding is small though.
ETFs seem easiest way, but if s
t hit the fan I wasn't sure I was comfortable.
There are monthly fees, but buying was fast and selling also. I think funds where available within 1 hr, and withdrawal within 10mins-2hours if I am not mistaken.
You can choose where to locate the holdings something like Swizterland, US or London.
It served my purposes as a hedge and I was lucky to have bought when it was cheap. The fees do add up if holding is small though.
ETFs seem easiest way, but if s
t hit the fan I wasn't sure I was comfortable.droopsnoot said:
Doofus said:
The one thing I (think I) do remember is that coins aren't subject to GCT, but bullion is.
As I read it, it's down to whether it is legal tender in the UK. Sovereigns are, so they're not subject, but Krugerrands are not, so would be subject to CGT. Not sure about bullion.
Voguely said:
I use BlackRock Gold and General fund and Investec Global Gold as part of shares ISA. Good way to get exposure without faff of physical gold. Both are up between 12-17% since buying in November, which has helped hedge against falls in some other holdings.
I think those are gold miners rather than gold bullion though aren't they?So equities rather than commodities?
I thought the OP was talking either physical gold or presumably exposure via an ETF of which WisdomTree and iShares seem to be the main two.
These lot have been around a long time. . . . but is it the correct time to invest?
https://www.bullionbypost.co.uk/?a_id=6&gclid=...
https://www.bullionbypost.co.uk/?a_id=6&gclid=...
bhstewie said:
hstewie said: I think those are gold miners rather than gold bullion though aren't they?
So equities rather than commodities?
I thought the OP was talking either physical gold or presumably exposure via an ETF of which WisdomTree and iShares seem to be the main two.
Correct, however if you chart a historical performance of either of these against a typical equity index (FTSE100 or Global will do), then you will see they are highly negatively correlated. I.e. when markets fall these ETFs rise and vice versa. Therefore essentially giving the same benefit as physical gold.So equities rather than commodities?
I thought the OP was talking either physical gold or presumably exposure via an ETF of which WisdomTree and iShares seem to be the main two.
Voguely said:
Correct, however if you chart a historical performance of either of these against a typical equity index (FTSE100 or Global will do), then you will see they are highly negatively correlated. I.e. when markets fall these ETFs rise and vice versa. Therefore essentially giving the same benefit as physical gold.
Just playing semantics for a moment, what is the actual benefit of such an asset within a portfolio that cannot be achieved through either holding cash (positive yield), holding direct shorts or running less exposure?Gold or associated funds always seems an incredibly high cost and clumsy means to hedge risk.
DonkeyApple said:
Just playing semantics for a moment, what is the actual benefit of such an asset within a portfolio that cannot be achieved through either holding cash (positive yield), holding direct shorts or running less exposure?
Gold or associated funds always seems an incredibly high cost and clumsy means to hedge risk.
Cash yield is extremely low compared to potential upside of a gold ETF. I'm not sure that retail investors can place direct shorts (unless you are talking about spread betting?) ? And running less exposure simply limits downside rather than giving actual upside. I'm not saying gold ETFs are the magic bullet, but as a small part of a portfolio can be helpful whilst other things are falling. However I'd have to caveat that you'd still need to realise the gains by selling before markets make a full recovery and gold ETFs fall again, so there will be an element of timing needed.Gold or associated funds always seems an incredibly high cost and clumsy means to hedge risk.
Yup but let’s say it tracks perfectly and you are £100k long the market and £10k is in gold can’t you achieve exactly the same risk profile by just being £95k long the markets say?
What’s a holding of gold actually going to achieve other than to raise costs and place a drag on investments?
Plus, cash may have no real upside but it also has no cost and no downside and in all but a horror situation it has more use than gold.
Generally, most people who use gold do so because they have too much cash for it to be secure so they convert the excess to tangible assets.
What’s a holding of gold actually going to achieve other than to raise costs and place a drag on investments?
Plus, cash may have no real upside but it also has no cost and no downside and in all but a horror situation it has more use than gold.
Generally, most people who use gold do so because they have too much cash for it to be secure so they convert the excess to tangible assets.
DonkeyApple said:
Derek Chevalier said:
I don't understand what purpose it serves in a portfolio. Is it tin hat protection?
Easily hidden from third wife, Handy for skipping the country when the law finally closes in. Can be parcelled off with an ugly daughter to get her sale away. Wild fowl shooting where lead shot is banned. Weights for impressing your personal trainer. Lots of perfectly sane uses for a bit of gold.
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