Blackrock gold fund and gold bubble profit taking?

sva19

I have been investing in the blackrock gold fund for a few years now, doing monthly contributions of £100 etc.

The fund has grown by around 50% for e.g £1000 to £1500.

Reading a lot about gold price bubble etc, so when profit taking how much should you generally take out and how much leave. I.e do you just take out just the the profit £500 or take it all out if you think the gold bubble will burst and stock falls say by 30%?

Do most people think gold fund and prices are riding far too high?

Tate65

Well I'm no expert, but I do also have money in Blackrock's gold fund too, and money in other natural resources funds. I've been wondering whether it's getting time to sell some or all of the Blackrock fund, as gold's at a high. But you never know - it could keep going. So it could be worthwhile selling some and keeping some. Or maybe even selling some now, more in a month, etc.

The whole market's quite high and I've heard recommendations to sell into the Santa rally. It's very hard to predict the markets, though, and if you sell you have to either find somewhere else that's better to put the money or else keep it out of the market and get back in when prices drop. But it's very easy to miss the best time to get back in!

Lokolo

Sell what you feel comfortable with.

If say you take the £500, what will you do with it? Will you put it into another fund? If so, where and why.

If you think gold might crash, why don't you sell some units (be it £500, £600, £1000), then when it does crash, reinvest it.

Just a couple of ideas I thought I would throw.

sva19

Thanks tate65, yes looks like we both in same position, it still rising in prices, which has reaaly helped my investment this yr following 2008 credit crunch drop. I'm try to gauge that if gold price drop what % will it be 20%, 30% etc? I personally could accept a 20% drop in gold funds within my portfolio, which amounts to £714 in portfolio1 and £406 in portfolio 2.

I have approx 29% of Blackrock and other nat resources fund in 1 portfolio and 19% in my daughter portfolio 2. I think both portfolio are too heavy in one specialised area and need to be cropped.

So try to see if I should take some profits. I think I may consider selling a % now and next month and then see, putting funds in safe corporate bonds

cogito

My personal rule in this scenario is to bank profits and let my initial investment run unless I have a very good reason for cashing in.

Old_Slaphead

I usually have a fixed price in mind (maybe +50%) and if it hits that then decide to sell around 25-30% (which sounds pretty much like cogitos strategy). If things keep going up then I'll sell some more.

That's the theory anyway but it also depends how overall liquid I am and the feelgood factor.

At the moment I'm selling a few things into strength. My views were that the market would reach 5100-5200 before falling back. I'm no expert (far from it) but I do know that when there's a setback it'll happen quickly (before the amateurs have chance to get out) and when you least expect it.
I'm also suspicious that it's in the financial sectors interest to have a good run up to the yearend (bonuses, performance figures etc) - next year, well seem to be plenty of black clouds on the horizon.

DiggerUK

sva19,
Why pull a defeat from a victory. What will you do with your profit.

The only safe place to put your profit would be in physical gold, bit like moving to the safe house next door.

Putting profit in corporate bonds is goofy, bit like moving to the house next door just before it gets demolished.

Best of fortune.

mattih5

I also invest in the Blackrock Gold & General fund and have done for ~2 years. I was in the same situation as you are now a month or so ago. I eventually decided to keep the fund running (which I'm glad of) and take ~50% of the PROFIT as that moment. I review the fund each week and decide whether to take more profit. I prefer to stick to a fixed amount of 50% for dicipline reasons.

Ok, you may be disappointed to learn Gold has risen and the fund could have risen more if you hadn't have taken profit, but at least you've banked profit. So far I've taken several hundred pound as profit from this fund and it (as of today) is still showing a +41% profit.

The profit i've taken is sitting as cash as I'm undecided what to do with it; that's the next hurdle you'll come across.

Jake'sGran

I only put money into the Blackrock Gold fund in the summer and don't think there is any point in taking profit at this stage.

Mattih5 - Have a look at First Choice Asia Pacific leaders. It's the best one of my new investments this year.

sabretoothtigger

A bubble is a situation where the underlying fundamentals behind the price are close to zero value.

This word is overused and certainly not true of gold. If it was maybe twice the price it should be I could agree, thats a bubble but I dont think gold is going to half in price or should even


Rather then focus on when to take profits, its best to come up with which investment will you switch the money to.
I know someone who bought a load of barclay shares cheap. My suggestion there was to withdraw the original amount of money placed because it had grown so much this would allow alot of profits still.

Gold hasnt grown that much, most of its benefit is as an inflation hedge, the price may have risen faster then that (justifiably) due to a widening demand as a reserve currency

Seems reasonable to switch out half of investment if you really suspect a short term fall or have a great place to put it next. If you will place it in a current account then I would say dont bother messing with it at all, wait till you can think of somewhere better.
In theory gold should be really slow growth (or inflation neutral) and people and new ideas should be the best investment. The more the latter exists the less value gold has

Aegis

sabretoothtigger wrote: »

A bubble is a situation where the underlying fundamentals behind the price are close to zero value.

I disagree with this definition. A bubble is when the price of an asset rises without correlation to improving fundamentals. House prices bubble just as easily as anything else, and it's fairly clear that houses have value.

Trading stuff with zero asset value for huge prices sounds more like a Ponzi scheme than an economic bubble.