What to do with a large sum of money....

amcluesent

>What would you do with it<

Impossible to say without know about your personal circumstances. Anyhow £70K is enough to let you diversify into several savings/investment areas, not put everything into a single account

HelpWhereIcan

Catbells wrote: »

So... I guess its high risk investment. Better not spend too much on it then.

Some would argue that it is a very high risk investment at the moment (even allowing for the fact that direct commodity investments have always been seen as high risk).

Have a read of http://ftalphaville.ft.com/blog/2010/03/02/162286/soros-and-the-bullion-bubble/ to get (in my humble opinion) good links to some of the issues - including the excellent http://www.bloomberg.com/apps/news?pid=20601109&sid=aFszao23VDGA&pos=10

Investment demand, including in bars and coins, doubled to 1,820 tons last year as investors sought a refuge from the global recession, according to GFMS Ltd. That exceeded jewelry demand for the first time in three decades, the London-based research firm said Jan. 13. Prices reached the record $1,226.56 a decade after the metal fell to a 20-year low of $251.95 amid sales by central banks. Gold was at $1,113.70 today in London.

Wish I'd bought some a couple of years ago but hey ho

Catbells wrote: »

Also looks like there's plenty of places to buy it but where do you sell it when the price goes up?

That depends whether you buy physical gold or not. That's where the like of bullionvault come in http://www.bullionvault.com/help/index.do?content=FAQs/FAQs_whyBV.html By no means a reccomendation of them but an FAQ I could find quickly

There are ways of "getting into" gold without buying the physical gold itself such as Commodity Funds, ETFs or even something like buying mining shares.

If the 70k is all you have you need to think very carefully about the risk you are prepared to take with it and set your investment accordingly - not sure that 50k out of 70k directly into gold would suit any but the most adventurous.

hounslow_boy

Catbells wrote: »

So... I guess its high risk investment. Better not spend too much on it then. Also looks like there's plenty of places to buy it but where do you sell it when the price goes up?

This is where advice become highly personal and very controversial:

In my opinion holding GBP at the moment is much more risky than holding gold. I'm reading posts where people are asking which cash deposit to invest in, X account paying Y interest etc. I'm worried for these people because they're either unaware or not worried that sterling is falling through the floor.

Deficit: what you must borrow each year to fund your lifestyle and/or meet your debt interest payments.
Debt: deficit accumulated over the years, plus compounding interest.

The UK's debt, including unfunded pension liabilities is over £1.4 trillion and growing, and there is absolutely no chance of it being paid back.

The only two ways out of this hole are default (bankruptcy) or devaluation (money printing aka quantitative easing). Either option is very bad for sterling and very good for gold.

You can sell gold back to the dealer you bought it from or to any other dealer, sell it on ebay, or if you bought at goldmoney.com or bullionvault.com you can sell it online. In 1980 at the peak of the last gold bull market there were queues of people at bullion dealers waiting to buy gold.

Linton

hounslow_boy wrote: »

This is where advice become highly personal and very controversial:

In my opinion holding GBP at the moment is much more risky than holding gold. I'm reading posts where people are asking which cash deposit to invest in, X account paying Y interest etc. I'm worried for these people because they're either unaware or not worried that sterling is falling through the floor.

Deficit: what you must borrow each year to fund your lifestyle and/or meet your debt interest payments.
Debt: deficit accumulated over the years, plus compounding interest.

The UK's debt, including unfunded pension liabilities is over £1.4 trillion and growing, and there is absolutely no chance of it being paid back.

The only two ways out of this hole are default (bankruptcy) or devaluation (money printing aka quantitative easing). Either option is very bad for sterling and very good for gold.

You can sell gold back to the dealer you bought it from or to any other dealer, sell it on ebay, or if you bought at goldmoney.com or bullionvault.com you can sell it online. In 1980 at the peak of the last gold bull market there were queues of people at bullion dealers waiting to buy gold.

Lets get some facts into the discussion...

The £ is not "falling through the floor".

The $ rate was about 2.4 in 1981 and just over 1 in 1985. Since these extremes for the past 25 years it has fluctuated between 1.5 and 2, mostly around the 1.5 mark. It is currently 1.45 - a bit low but not wildly different from previous values.

Against the euro the £ is at its highest for nearly 18 months. There was a comparatively large drop from 2007-2008 but since then the trend if anything has been upwards.

Those people who queued to buy gold in 1980 paid about $800/oz. Current price $1227/oz. That works out as 1.4%/yr - what a great investment over 30 years!!!!

hounslow_boy

I did say it was controversial

Linton wrote: »

Lets get some facts into the discussion...

The £ is not "falling through the floor".

Depends on the timescale you choose to justify your argument.

Linton wrote: »

The $ rate was about 2.4 in 1981 and just over 1 in 1985. Since these extremes for the past 25 years it has fluctuated between 1.5 and 2, mostly around the 1.5 mark. It is currently 1.45 - a bit low but not wildly different from previous values.

Ditto.

Linton wrote: »

Against the euro the £ is at its highest for nearly 18 months. There was a comparatively large drop from 2007-2008 but since then the trend if anything has been upwards.

The dollar, the pound and the euro are all devaluing or falling in real purchasing power, but at different rates which gives the illusion of one currency rising vs another. They're all falling, but at different rates.

Linton wrote: »

Those people who queued to buy gold in 1980 paid about $800/oz. Current price $1227/oz. That works out as 1.4%/yr - what a great investment over 30 years!!!!

Those people bought at the peak - generally not a good idea. The commodities market, like the housing market, is cyclical. Timing is important. You chose the peak of the last gold bull market, and it's subsequent rapid decline, as the starting point for your analysis.

lvader

hounslow_boy wrote: »

Those people bought at the peak - generally not a good idea. The commodities market, like the housing market, is cyclical. Timing is important. You chose the peak of the last gold bull market, and it's subsequent rapid decline, as the starting point for your analysis.

They didn't know they bought at the peak, just like people buying now don't know if Gold is close to peaking.

hounslow_boy

lvader wrote: »

They didn't know they bought at the peak, just like people buying now don't know if Gold is close to peaking.

True.They didn't know it was peaking, and I don't know if gold is close to peaking. But there is a predictable trendline in all bubbles. They all culminate in a mania phase, an irrational exuberance phase when a rising market becomes the only justification for a rising market.

It's why I'd strongly recommend people learn as much as they can about the asset class they are investing in. There's so much information out there. Read as much as you can about the fundamentals affecting your market, become your own authority so that you are comfortable with your decisions.

It's true that a lot of people don't see bubbles topping but these guys did:

'Peter Schiff Was Right' on youtube:
http://www.youtube.com/watch?v=Z0YTY5TWtmU

Doug Casey on 321gold.com in March 2007:
http://www.321gold.com/editorials/casey/casey031207.html

lvader

People are always predicting bubbles or trends, practically every outcome has been covered by someone. I'm not sure if that makes then better informed or just lucky. I think there is huge amounts of market manipulation going on, especially by the US and main European governments. They won't allow gold investment to get out of hand, they are still very much protecting gilts.

strawberries1

Hello everyone, I've been reading your posts with intrest.
If one doesn't have a foot on the property ladder yet, lives and works in London, with about £50,000 savings what will you suggest one does ???? buy a property now or wait till next year to start looking? or wait a couple more years? I know no one has a crystal ball to see the furture but if you've got some knowledge of the market I'll appreciate your input.
ta!

MeanExpat

"If one doesn't have a foot on the property ladder yet, lives and works in London, with about £50,000 savings"

If you intend to carry on living and working in London for the next 5-10 years, it's obvious to me that you should buy NOW.
Even if didn't stay in London, you could rent out your property in London and rent elsewhere cheaper.