The DON'T buy gold thread

cloud_dog

I don't think's to do with being negative or positive on gold, it comes across as almost belittling a post or point of view.

Negative comments are just as valuable as positive, and anyone who is blinkered or ignores an opposing view deserves everything which comes their way.

Thefunkygibbons

The problem with Gold is that it does not earn an income, whereas shares pay dividends

However, it is no different than an ETF in oil, basically a punt on whether the price willl go up or down

nrsql

>> whereas shares pay dividends
Some do, some don't, some did, some will.

Doesn't matter - can always take an income from increases in value.
Note - dividends might decrease the value so they don't come free.

gozomark

its not that gold doesn't pay an income, but that it doesn't generate an income whether paid out or not - a share may not pay a dividend, but as long as its profitable, its still increasing in intrinsic value. Buying gold is no different to buying stamps, or a lump of rock.

Pssst

Invest in Chocolate.

I have. I now have a huge box of Lilley O briens to chomp through ..

Lol_UK_2

sabretoothtigger wrote: »

Gold is not priced in dollars exclusively, if the dollar falls in value then you will need more of them to buy the gold ie. the price rises

Has the price of gold risen in pounds today?

Yes it has...which is not say that it won't go down or up over the coming months.
My contention would never be to own gold and no other investments- that would be silly...However I just feel we are entering dangerous financial territory and things have not looked too good with traditional investment strategies of late.

Who sold all those pension schemes to folks whose pot has diminished by up to 75% is what I'd like to know...Financial advisors who advocated 'safe' investments?

Discounting gold as a possible hedge against inflation (just as the bank of England prints £75 billion in cash) doesn't make much sense to me...

Stavros wrote: »

By getting a good IFA, choosing a diverse investment strategy and having a Fund manager with a proven track record. What I don't do is listen to people on here who are neither

Fair enough, but that hasn't told me anything about a good place to invest- what is safe, what is risky- where to put money right now.
Could that be because right now it's anyone's guess, and nobody knows where to invest or what to invest in?

sh856531

Discounting gold as a possible hedge against inflation (just as the bank of England prints £75 billion in cash) doesn't make much sense to me...

I think everyone will surely accept that you view it as a hedge against inflation, and of course that's entirely your decision to make - and I hope it works out for you.

However, I'll try and provide a couple of reasons why I do think discounting it as a hedge against inflation is entirely sensible.

1. We are currently entering a period of deflation, not inflation, so if anything the value of cash is going to increase in relative terms. As you mentioned, inflation may increase again in the mid-term but there's nothing to stop the BoE reversing all its interest rate decisions in short order.

2. Gold could well be at its peak. If you think back to October, there were a few points where people were literally worried that the entire banking sector in several countries was going to collapse - potentially within hours. I don't know about you but even though I'm not happy about what the government is having to do to bail out the banks - I don't feel like all the banks are going to suddenly collapse anymore. With that in mind it could be the case that all the uncertainty has already been priced into gold and its gradually going to decline in value as confidence and recovery slowly begin to seep back into the system.

If that were to happen, then the worry I would have for you is that the decrease in the value of gold would be potentially much higher than any loss of purchasing power due to inflation.

But it's all just personal decisions and view points at the end of the day.

I guess you just have to be very confident that inflation will rise substantially and gold will hold its price whilst that happens. Personally I'm not as confident as you that either of those two things will hold true.

But regardless I hope it works out

:-)

S

Lol_UK_2

sh856531 wrote: »

I think everyone will surely accept that you view it as a hedge against inflation, and of course that's entirely your decision to make - and I hope it works out for you.

However, I'll try and provide a couple of reasons why I do think discounting it as a hedge against inflation is entirely sensible.

1. We are currently entering a period of deflation, not inflation, so if anything the value of cash is going to increase in relative terms. As you mentioned, inflation may increase again in the mid-term but there's nothing to stop the BoE reversing all its interest rate decisions in short order.

2. Gold could well be at its peak. If you think back to October, there were a few points where people were literally worried that the entire banking sector in several countries was going to collapse - potentially within hours. I don't know about you but even though I'm not happy about what the government is having to do to bail out the banks - I don't feel like all the banks are going to suddenly collapse anymore. With that in mind it could be the case that all the uncertainty has already been priced into gold and its gradually going to decline in value as confidence and recovery slowly begin to seep back into the system.

If that were to happen, then the worry I would have for you is that the decrease in the value of gold would be potentially much higher than any loss of purchasing power due to inflation.

But it's all just personal decisions and view points at the end of the day.

I guess you just have to be very confident that inflation will rise substantially and gold will hold its price whilst that happens. Personally I'm not as confident as you that either of those two things will hold true.

But regardless I hope it works out

:-)

S

Thanks for a very well reasoned post!...I was expecting the standard cries of 'gold-bug' and ' numptey' from the usual suspects. You may be right- I've been reading and listening to the doom-sayers who are saying ' we ain't seen nothing yet' and saying gold will double in value, and that is the view I've tended towards.
I guess all bets are off right now, because times are getting more and more unpredictable financially, almost every investment strategy has risk and so anything is possible!

Stavros_3

Lol_UK wrote: »

Fair enough, but that hasn't told me anything about a good place to invest- what is safe, what is risky- where to put money right now.
Could that be because right now it's anyone's guess, and nobody knows where to invest or what to invest in?

I have paid good money for good advice via my IFA. I have invested a very large 6 figure sum with a wealth management company with a proven track record on med- long term investments with the following objectives. To give me the best possible return on my capital over 5- 10 years in line with my exposure to risk. I want my investments to be as tax efficient as possible. My portfolio is global and very diverse (nope it doesn't include G**d pmsl). At the moment I have only a small exposure in uk stocks but the one they have picked is up 25% since end of last December, but these are long term and which has made around 2.5k. I could tell you which company but that would be against forum rules. My final comment is this:-
No-one on here is going to post where you should invest. If you are seriously interested in investments and have a sizeable amount to invest for the long haul, you should consult an IFA. hth
P.S the 'gold-bug' and ' numptey' (spelt Numpty) was not aimed at yourself)

Lol_UK_2

Stavros wrote: »

I have paid good money for good advice via my IFA. I have invested a very large 6 figure sum with a wealth management company with a proven track record on med- long term investments with the following objectives. To give me the best possible return on my capital over 5- 10 years in line with my exposure to risk. I want my investments to be as tax efficient as possible. My portfolio is global and very diverse (nope it doesn't include G**d pmsl). At the moment I have only a small exposure in uk stocks but the one they have picked is up 25% since end of last December, but these are long term and which has made around 2.5k. I could tell you which company but that would be against forum rules. My final comment is this:-
No-one on here is going to post where you should invest. If you are seriously interested in investments and have a sizeable amount to invest for the long haul, you should consult an IFA. hth

Ok so you know your stuff, and are doing well and I won't knock you for it.
We are not all as lucky to have that kind of money or be able to afford fund managers- I have a few grand in Halifax, a few more grand in PB's and a few grand in gold- ex-bankrupt, self-employed and no house- and a happy bunny!
I can make more money in a day than the current percentage interest an ISA would pay in 5 years so no point in that. So I should sell my gold (that I'm 15% up on in 4 months)?