Gold - worthwhile in the current climate? (LTD Co)
Discussion
Hoping PH can assist here:
I have my own ltd co which has some spare cash. I receive no interest on it at all.
I cannot pay it into pension as that route is now closed to me (lifetime hit) and I do not want to take it out of the ltd anytime soon
What can I do with it to earn some growth or interest ?
The amount available rises monthly - The amount does not really matter for this post.
Last week, after watching the stock market generally collapse and gains for most '22 wiped out, plus the devastation of BTC et al I got thinking about gold. I read various articles that gold is a safe holding over time and I like the sound of it.
If I were to buy a tube of Britannia coins and have them delivered that would cost me around 16k with a buy back price of around 14.5k. I'd therefore need to see gold go up by 10% to be in profit. Lets assume the tube of coins is now worth 20k and I can sell them for 19k, therefore showing a 3k profit over time.
I assume that when I sell them for 19k I have corp tax to account for and would like the profit in my personal account.
Any experts here who can assist ?
Arf
I have my own ltd co which has some spare cash. I receive no interest on it at all.
I cannot pay it into pension as that route is now closed to me (lifetime hit) and I do not want to take it out of the ltd anytime soon
What can I do with it to earn some growth or interest ?
The amount available rises monthly - The amount does not really matter for this post.
Last week, after watching the stock market generally collapse and gains for most '22 wiped out, plus the devastation of BTC et al I got thinking about gold. I read various articles that gold is a safe holding over time and I like the sound of it.
If I were to buy a tube of Britannia coins and have them delivered that would cost me around 16k with a buy back price of around 14.5k. I'd therefore need to see gold go up by 10% to be in profit. Lets assume the tube of coins is now worth 20k and I can sell them for 19k, therefore showing a 3k profit over time.
I assume that when I sell them for 19k I have corp tax to account for and would like the profit in my personal account.
- Is the corp tax original purchase price of 16k or on the increased 19k ?
- How can I extract the profit from the sale of the coins to my personal account in the most efficient way ? Is there some CGT angle here ?
Any experts here who can assist ?
Arf
DonkeyApple said:
Gold is a bit like solar panels. Best left to dodgy salesmen, pensioners and man maths aficionados. 
As you highlight in your first post, the mere act of initial purchase books a massive loss that you then have to hope to recover. That simple act is usually sufficient to confirm you're not really looking at a sensible investment.
Gold has most value as either a hedge, for making an ugly woman socially palatable among prettier women. Or for members of the Jimmy Saville fan club who like to walk around in public in leisure wear and girls jewellery.
Gold will tend to be in demand during economic uncertainty as the wealthy seek to diversify to less risky stores. Or if central banks feel the need to bolster reserves. Even the Asian wedding market can push prices.
I'm not sure there are any overt drivers to see gold give a clear return over the next 5-10 years.
Besides, you're so offside in the first instance (and don't forget that spread will widen considerably should you want to selling when the price is falling and also don't forget that as physical gold is unregulated the vendors can tell you whatever they like to get you to buy) that you could sit on cash at 1% for years and outperform.
That's really useful in a lot of ways ... thxAs you highlight in your first post, the mere act of initial purchase books a massive loss that you then have to hope to recover. That simple act is usually sufficient to confirm you're not really looking at a sensible investment.
Gold has most value as either a hedge, for making an ugly woman socially palatable among prettier women. Or for members of the Jimmy Saville fan club who like to walk around in public in leisure wear and girls jewellery.
Gold will tend to be in demand during economic uncertainty as the wealthy seek to diversify to less risky stores. Or if central banks feel the need to bolster reserves. Even the Asian wedding market can push prices.
I'm not sure there are any overt drivers to see gold give a clear return over the next 5-10 years.
Besides, you're so offside in the first instance (and don't forget that spread will widen considerably should you want to selling when the price is falling and also don't forget that as physical gold is unregulated the vendors can tell you whatever they like to get you to buy) that you could sit on cash at 1% for years and outperform.
DonkeyApple said:
TobyTR said:
DonkeyApple said:
arfur said:
I'm not looking for a quick buck ... I'm thinking monthly investing over >5-10 years
Gold is a bit like solar panels. Best left to dodgy salesmen, pensioners and man maths aficionados. As you highlight in your first post, the mere act of initial purchase books a massive loss that you then have to hope to recover. That simple act is usually sufficient to confirm you're not really looking at a sensible investment.
Gold has most value as either a hedge, for making an ugly woman socially palatable among prettier women. Or for members of the Jimmy Saville fan club who like to walk around in public in leisure wear and girls jewellery.
Gold will tend to be in demand during economic uncertainty as the wealthy seek to diversify to less risky stores. Or if central banks feel the need to bolster reserves. Even the Asian wedding market can push prices.
I'm not sure there are any overt drivers to see gold give a clear return over the next 5-10 years.
Besides, you're so offside in the first instance (and don't forget that spread will widen considerably should you want to selling when the price is falling and also don't forget that as physical gold is unregulated the vendors can tell you whatever they like to get you to buy) that you could sit on cash at 1% for years and outperform.
When you divide the current M2 money/currency supply by the price of Gold it's still under-valued with more upside potential. And that's before we get into a potential for a Bretton-Woods 3.0... there's a reason why majority of Central Banks have been increasing their Gold reserves - because it is true sound money.
I did LOL at sitting on cash at 1% when real inflation (not CPI / CP-Lie) is over 15%.
2000 to 2011 was the last time gold rose. That was off the back of a heavily deflated base and a return to storage by Central Govts. The price in 2022 has the same USD value as 2011. Zero change but worse, that's the period of massive QE and currency devaluation and gold actually fell back during the first 6 years of QE and has only started to rise recently, albeit stalled on Covid and remains today, lower than prior to Covid!
Anyone can cherry pick a data set to try and change a reality. One only has to look at a petrol thread to see this but the reality is for a realistic perspective one needs the whole picture.
One also, when contrasting to cash needs to very much recognise the difference between physical and paper. The OP in this thread is referring to physical which has very significant transaction costs that have to be overcome, storage costs (for sensible investors, ie insurance) and other factors that need to be considered. The OP was also mooting an all in investment which then requires certain obvious risks to be accounted for. Plus, there may be tax considerations if using an LTD.
The replies to the thread have pretty much made it clear that it's probably pointless, and certainly painful to hold physical gold and use it as a investment.
Thx for the thoughts on this though - appreciated
DonkeyApple said:
Scootersp said:
I believe there is room for a happy medium! It's a very divisive topic, it tends to present with polar opposite views with slightly derogatory tags given.
There is only one reason I can think that central banks buy it and that's because one day they think they might need it? like a ancient security blanket? and these are the people that do make the financial rules and can change them?
The problem is that when there is an extreme view that view will always be at odds with more than one use of the material. There is only one reason I can think that central banks buy it and that's because one day they think they might need it? like a ancient security blanket? and these are the people that do make the financial rules and can change them?
Ie, gold clearly has a value and clearly serves a purpose. Believing that in a specific situation it may not serve any sane purpose is not the same as believing it never serves any purpose.
So in this particular thread where an OP was looking at a specific scenario, stating that gold performs well over a 5000 year outlook compared to a major currency or that it can be an efficient means to cross borders rapidly in a violent geographical scenario are really all that relevant.
If the OP has asked what the best store of wealth might be for a zombie apocalypse or for a plan to live to be 5000 years old then they might be valid arguments.
The point being that just because gold may be a poor store of value in one scenario doesn't mean it's bad for another and vice versa, just because it's good for zombie holocausts or 5000 year investment horizons doesn't mean it's any good as an alternative for toilet paper.
For most people in a stable economy and with a typical lifespan, beyond sensible exposure as part of a broad portfolio or making phone calls, gold serves almost not purpose other than making old men less terrified of the world outside and for offloading ugly daughters.
I did say in the OP that the amount didn't matter, but I would think it's around the 8k pcm that I used to put into pension, but no longer can. I did also look at gilts, but ffs - even that is only 1% pa voucher for 5 years ..
I suspect it will just sit there for 10 years accumulating and I'll take the 10% entrepreneur relief (if it still exists) at some point when I retire.
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