"Safe" investment, maybe gold?

[A44RON]

Jiebo said:

Diversify. Going all in gold is about as stupid as going all in on a single company share.

Gold is great as 10-15% of your portfolio. Not 50. Certainly not 100.

During normal economic times I would agree. However, this is far from that and unprecedented. Which is why you're seeing demand for physical precious metals increasing.

Given the seismic amount of fiat (no, not the car) currency printed this year which will continue to be printed, there is absolutely nothing wrong with 50% of ones portfolio in Gold & Silver.

[A44RON]

Jiebo said:

Bonds / Gilts is your hedge.

https://www.ft.com/content/f98d242c-2bf5-11e7-bc4b-5528796fe35c

Gilts and Bonds are vulnerable to rising inflation because the fixed income buys less as inflation eats into it.

UK inflation-linked bonds are very expensively priced and yields are low. They could be vulnerable if we get a Bond market correction caused by inflation pressures and perhaps will not behave in the way you would assume.

[A44RON]

sideways sid said:

...5 pages of discussion about gold, which is not an investment.

OP, did you consider Premium Bonds?

Also, not an investment, but addresses some of the OP's concerns much more closely than commodities.

not an investment?

Tell that to the chaps who bought Gold in 1970 at US$230 per oz and then transferred their portfolio into property in 1981 at US$2,172 per oz (944% increase)...

and the individuals in 2001 who bought at US$380 per oz and sold it all in 2011 at US$2,078 per oz....

[A44RON]

egor110 said:

How come you've totally avoided adding a mix of shares and bonds though ?

For the reasons above, basically.

[bitchstewie]

A44RON said:

During normal economic times I would agree. However, this is far from that and unprecedented. Which is why you're seeing demand for physical precious metals increasing.

Given the seismic amount of fiat (no, not the car) currency printed this year which will continue to be printed, there is absolutely nothing wrong with 50% of ones portfolio in Gold & Silver.

I tend to invest "all weather" and I'm not aware of any "off the shelf" funds or investment trusts that have gone above 10-12 % gold bullion.

Even a Harry Browne portfolio is "only" 25% gold bullion.

I've run some really funky backtests but I think you'd have to be pretty brave to go 50% in on gold.

[A44RON]

bhstewie said:

I tend to invest "all weather" and I'm not aware of any "off the shelf" funds or investment trusts that have gone above 10-12 % gold bullion.

Even a Harry Browne portfolio is "only" 25% gold bullion.

I've run some really funky backtests but I think you'd have to be pretty brave to go 50% in on gold.

What's brave about it during these current and future economic times? It's arguably the safest hedge going forwards - look around at the global economy - this is not normal buoyant times and people should not be thinking like it is and adjust accordingly.

Adapting to the climate is what's needed. As I said above, when things were normal, I'd agree, but it's not and won't be for some time to come. I'm reading reports that the airline industry will take at least 5 years to recover.

I'm all ears if someone wants to name a safer hedge than precious metals in these current times that also has an investment potential to the level that's been listed on the last two pages... Because it sure isn't in bonds, cash or stocks.

Edited by A44RON on Sunday 3rd May 07:22

[bitchstewie]

A44RON said:

What's brave about it during these current and future economic times? It's arguably the safest hedge going forwards - look around at the global economy - this is not normal buoyant times and people should not be thinking like it is and adjust accordingly.

Adapting to the climate is what's needed. As I said above, when things were normal, I'd agree, but it's not and won't be for some time to come. I'm reading reports that the airline industry will take at least 5 years to recover.

I'm all ears if someone wants to name a safer hedge than precious metals in these current times that also has an investment potential to the level that's been listed on the last two pages... Because it sure isn't in bonds, cash or stocks.

I'd have said going 50% in on any single asset right now is basically betting heavily on red or black.

There are fund managers who eat breathe and sleep this stuff and I'm not aware of any that have done this with gold within their own public funds or suggested "retail" investors do it.

I don't see many holding or advocating holding over 10% or so.

[oldaudi]

I’ve got a fair bit of Gold and Silver. Nothing larger than 1oz in Gold. Lots of Sovs and fractional. In silver nothing larger than a 10z minted bar and 250g poured bars. The only reason I have this is as a hedge against the stock markets where most of my wealth is. As the stock markets go down, gold tends to go up as it’s seen as a safe haven. Not all the time, sometimes other currencies become the winner such as USD depending on other factors. By the time you include the spread, delivery, profits for the seller then the spread, postage and mark downs when selling it back you very rarely make a “profit” in Gold. Silver even worse with the 20% vat when you buy it. You’re instantly 20% plus down when you buy silver. With there being physical delivery problems at the moment due to Covid it’s a weird market. eBay prices are on the up (be careful) and places like coininvest and bullionbypost will snap your arm off for your physical gold.

I also like to keep it off the record so to speak. If you buy less then £5k a year you don’t need to fill in any forms (I think that’s correct, there are all sorts of HMRC documents about Gold, cgt etc) . As a result nobody really knows you have it (yes there is a paper trail I guess) so I have some of my wealth outside any inheritance calculations. My kids can drip feed it back into the market for fiat currency in the future. I’m not Goldmember by any stretch of the imagination but I’ve managed to put a fair bit together over q15 years. I’ve got receipts for gold 1oz at just over £600.

I would not recommend 50% in one asset, no way. It’s just away of keep equilibrium when your funds and ETFs plummet. I’ve actually been selling some back in exchange for fiat and transferring this into my children stocks and shares funds. It’s the cycle of profit and wealth transfer to my children for me now. You’d be a fool to miss out on high gold and low prices in stocks at this time. Hopefully with income , dividends and compound interest reinvested it’s my path to increase wealth. You get no income from gold coins. I’ll the use my salary to buy more coins here and there
But you have to exposed to Gold for sometime to to this trade, I’m selling a coins for £1300 that I purchased for £700 so it’s a long game. You don’t make profits in Gold buy getting a 1oz coins and then watching Gold go up $20 over two weeks

I’m not really sure why I purchased lots of Silver to be honest. I’ve collected stuff for decades, either panini football stickers or transformers.... now I collect Silver Koala, Panda Kookaburra coins....

Edited by oldaudi on Sunday 3rd May 09:19

Edited by oldaudi on Sunday 3rd May 09:21

[JulianPH]

bhstewie said:

A44RON said:

What's brave about it during these current and future economic times? It's arguably the safest hedge going forwards - look around at the global economy - this is not normal buoyant times and people should not be thinking like it is and adjust accordingly.

Adapting to the climate is what's needed. As I said above, when things were normal, I'd agree, but it's not and won't be for some time to come. I'm reading reports that the airline industry will take at least 5 years to recover.

I'm all ears if someone wants to name a safer hedge than precious metals in these current times that also has an investment potential to the level that's been listed on the last two pages... Because it sure isn't in bonds, cash or stocks.

I'd have said going 50% in on any single asset right now is basically betting heavily on red or black.

There are fund managers who eat breathe and sleep this stuff and I'm not aware of any that have done this with gold within their own public funds or suggested "retail" investors do it.

I don't see many holding or advocating holding over 10% or so.

I am firmly with bhstewie and others here who have highlighted this.

Gold can be a fantastic hedge, but placing 50% of your investments in it is madness as it is very volatile and produces no income to compensate for this.

Of my two main personal retail investment holdings, one has 5% gold exposure and the other has none, so I have c. 2.5% overall exposure to it.

The one with none is 100% equities and is up year to date, so it is not just the asset classes, but the quality and diversification of the holdings with an asset class that is important.

[Benbay001]

A44RON said:

not an investment?

Tell that to the chaps who bought Gold in 1970 at US$230 per oz and then transferred their portfolio into property in 1981 at US$2,172 per oz (944% increase)...

and the individuals in 2001 who bought at US$380 per oz and sold it all in 2011 at US$2,078 per oz....

If you somehow manage to buy any asset at its very bottom and sell it at its very top then you are going to have done very well.

https://www.macrotrends.net/1333/historical-gold-p...

Now, if only you could let us know when we reach those two points.

[egomeister]

oldaudi said:

I’ve got a fair bit of Gold and Silver. Nothing larger than 1oz in Gold. Lots of Sovs and fractional. In silver nothing larger than a 10z minted bar and 250g poured bars. The only reason I have this is as a hedge against the stock markets where most of my wealth is. As the stock markets go down, gold tends to go up as it’s seen as a safe haven. Not all the time, sometimes other currencies become the winner such as USD depending on other factors. By the time you include the spread, delivery, profits for the seller then the spread, postage and mark downs when selling it back you very rarely make a “profit” in Gold. Silver even worse with the 20% vat when you buy it. You’re instantly 20% plus down when you buy silver. With there being physical delivery problems at the moment due to Covid it’s a weird market. eBay prices are on the up (be careful) and places like coininvest and bullionbypost will snap your arm off for your physical gold.

I also like to keep it off the record so to speak. If you buy less then £5k a year you don’t need to fill in any forms (I think that’s correct, there are all sorts of HMRC documents about Gold, cgt etc) . As a result nobody really knows you have it (yes there is a paper trail I guess) so I have some of my wealth outside any inheritance calculations. My kids can drip feed it back into the market for fiat currency in the future. I’m not Goldmember by any stretch of the imagination but I’ve managed to put a fair bit together over q15 years. I’ve got receipts for gold 1oz at just over £600.

I would not recommend 50% in one asset, no way. It’s just away of keep equilibrium when your funds and ETFs plummet. I’ve actually been selling some back in exchange for fiat and transferring this into my children stocks and shares funds. It’s the cycle of profit and wealth transfer to my children for me now. You’d be a fool to miss out on high gold and low prices in stocks at this time. Hopefully with income , dividends and compound interest reinvested it’s my path to increase wealth. You get no income from gold coins. I’ll the use my salary to buy more coins here and there
But you have to exposed to Gold for sometime to to this trade, I’m selling a coins for £1300 that I purchased for £700 so it’s a long game. You don’t make profits in Gold buy getting a 1oz coins and then watching Gold go up $20 over two weeks

I’m not really sure why I purchased lots of Silver to be honest. I’ve collected stuff for decades, either panini football stickers or transformers.... now I collect Silver Koala, Panda Kookaburra coins....

Edited by oldaudi on Sunday 3rd May 09:19

Edited by oldaudi on Sunday 3rd May 09:21

If your primary reason for holding precious metals is a hedge against stocks, why buy physical rather than use an ETF or similar paper instrument?

[oldaudi]

I Also hold Junior Gold ETF with Hargreaves Lansdown. I think for sometime I was one of these tin foil hat people and I saw myself going to buy my toilet roll in silver coins. It’s also turned into a hobby and I buy non billion coins such as this 1791 Spanish gold and USA Indian Head. But you’re right, holding more in an ETF backed with Gold might be a better idea, but my tinfoil hat wonders if they really are backed by physical good. . [url]

|https://thumbsnap.com/W9FgZIyf[/url][url]

|https://thumbsnap.com/wZWEio65[/url]

Edited by oldaudi on Sunday 3rd May 09:40

[egomeister]

JulianPH said:

I am firmly with bhstewie and others here who have highlighted this.

Gold can be a fantastic hedge, but placing 50% of your investments in it is madness as it is very volatile and produces no income to compensate for this.

Of my two main personal retail investment holdings, one has 5% gold exposure and the other has none, so I have c. 2.5% overall exposure to it.

The one with none is 100% equities and is up year to date, so it is not just the asset classes, but the quality and diversification of the holdings with an asset class that is important.

Is it really that volatile though? I've been watching it for the past few years and it seems quite boring to me (until the last few months...)

This chart of volatility of S&P vs gold would suggest its comparable?

[bitchstewie]

egomeister said:

Is it really that volatile though? I've been watching it for the past few years and it seems quite boring to me (until the last few months...)

This chart of volatility of S&P vs gold would suggest its comparable?

Worth a read on the power of diversification (gold is detailed).

https://monevator.com/diversification-in-the-coron...
https://monevator.com/how-diversification-worked-d...

[JulianPH]

egomeister said:

Is it really that volatile though? I've been watching it for the past few years and it seems quite boring to me (until the last few months...)

This chart of volatility of S&P vs gold would suggest its comparable?

This is my point. The S&P 500 is volatile and the chart you posted shows that gold is comparable with this.

Equities (and bonds) provide an income though and gold does not, so you are wholey reliant on the spot price.

This is gold over the last 3 months:




It has obviously done well, but it has still been volatile.

Don't get me wrong, I have nothing against gold as an investment, I was just highlighting that I wouldn't put half my investable assets in it, particularly when it is nudging its all time high!

[A44RON]

Benbay001 said:

A44RON said:

not an investment?

Tell that to the chaps who bought Gold in 1970 at US$230 per oz and then transferred their portfolio into property in 1981 at US$2,172 per oz (944% increase)...

and the individuals in 2001 who bought at US$380 per oz and sold it all in 2011 at US$2,078 per oz....

If you somehow manage to buy any asset at its very bottom and sell it at its very top then you are going to have done very well.

https://www.macrotrends.net/1333/historical-gold-p...

Now, if only you could let us know when we reach those two points.

Well we're about to find out over the next few years...

[egomeister]

JulianPH said:

This is my point. The S&P 500 is volatile and the chart you posted shows that gold is comparable with this.

Equities (and bonds) provide an income though and gold does not, so you are wholey reliant on the spot price.

This is gold over the last 3 months:




It has obviously done well, but it has still been volatile.

Don't get me wrong, I have nothing against gold as an investment, I was just highlighting that I wouldn't put half my investable assets in it, particularly when it is nudging its all time high!

Ah sorry, I read it as a comparison to stocks - clearly bonds have been more stable.

We're only nudging all time highs in dollar terms, in GBP we've long gone through that! I'd not be averse to adding to my gold position even now, but with the caveat of watching carefully what the USD is doing.

[bobski1]

oldaudi said:

I’ve got a fair bit of Gold and Silver. Nothing larger than 1oz in Gold. Lots of Sovs and fractional. In silver nothing larger than a 10z minted bar and 250g poured bars. The only reason I have this is as a hedge against the stock markets where most of my wealth is. As the stock markets go down, gold tends to go up as it’s seen as a safe haven. Not all the time, sometimes other currencies become the winner such as USD depending on other factors. By the time you include the spread, delivery, profits for the seller then the spread, postage and mark downs when selling it back you very rarely make a “profit” in Gold. Silver even worse with the 20% vat when you buy it. You’re instantly 20% plus down when you buy silver. With there being physical delivery problems at the moment due to Covid it’s a weird market. eBay prices are on the up (be careful) and places like coininvest and bullionbypost will snap your arm off for your physical gold.

I also like to keep it off the record so to speak. If you buy less then £5k a year you don’t need to fill in any forms (I think that’s correct, there are all sorts of HMRC documents about Gold, cgt etc) . As a result nobody really knows you have it (yes there is a paper trail I guess) so I have some of my wealth outside any inheritance calculations. My kids can drip feed it back into the market for fiat currency in the future. I’m not Goldmember by any stretch of the imagination but I’ve managed to put a fair bit together over q15 years. I’ve got receipts for gold 1oz at just over £600.

I would not recommend 50% in one asset, no way. It’s just away of keep equilibrium when your funds and ETFs plummet. I’ve actually been selling some back in exchange for fiat and transferring this into my children stocks and shares funds. It’s the cycle of profit and wealth transfer to my children for me now. You’d be a fool to miss out on high gold and low prices in stocks at this time. Hopefully with income , dividends and compound interest reinvested it’s my path to increase wealth. You get no income from gold coins. I’ll the use my salary to buy more coins here and there
But you have to exposed to Gold for sometime to to this trade, I’m selling a coins for £1300 that I purchased for £700 so it’s a long game. You don’t make profits in Gold buy getting a 1oz coins and then watching Gold go up $20 over two weeks

I’m not really sure why I purchased lots of Silver to be honest. I’ve collected stuff for decades, either panini football stickers or transformers.... now I collect Silver Koala, Panda Kookaburra coins....

Edited by oldaudi on Sunday 3rd May 09:19

Edited by oldaudi on Sunday 3rd May 09:21

Can I ask where you buy from? Looking to get a few bits to invest in.

[A44RON]

https://www.ft.com/content/ecd9c6d5-6c42-4aa2-ae00...

"Hedge funds bet on gold as refuge from unfettered currency printing"

[bitchstewie]

A44RON said:

https://www.ft.com/content/ecd9c6d5-6c42-4aa2-ae00...

"Hedge funds bet on gold as refuge from unfettered currency printing"

Absolutely I don't think anyone disputes that.

Just the percentage that seems open to debate.