Investments - Gold, Silver etc,

Sarah920

Hi there,

I am trying to beat the inflation gremlin. I have locked a goodly amount of my money away in an ISA and though I guess my money is deflating, it'll still be worth it in terms of tax-freedom (when I pay it - I am currently an impoverished student). However, I have £20,000 in a savings account at the moment (The AA) and what will all this financial uncertainty floating around, I thought that it might be an idea to put at least some of it into a bit more solid than a bank account that will hold it's value. Knocking off living costs and rainy day measures, I have £15,000 that isn't working hard enough.

My plan is to put £3000 or thereabouts in a mixture of gold sovereigns from Elm Investments and lock them away in my bank's vault (I am going to go and ask the Co-op tomorrow what their arrangements are). I also was thinking of buying some silver investment certificates - I like Perth Mint of Western Australia's Certificate Programme, but they want an initial investment of $10,000 (£6400) and I'm a bit less keen on that.

I'm not interested in buying shares because it'll make me anxious for personal reasons. I looked at corporate bonds after this article by Money Magpie, but fellow MSErs seemed a bit harsh on the idea because of the risk involved. I read about Smile's funds supermarket, but I have no idea what that is?

So, does anyone have any other ideas? I'd like a nice rate of interest, but right now I'd just like my money to hold its value...

Thanks.

Sarah

sabretoothtigger

Funds means you can give money to a manager to invest for you. He'd handle those tricky shares and so on, google hl


The elm site shows an immediate cost to buying a sovereign of 5%. Shares for comparison are mostly half a percent or less in this loss between buy and sell price.
So I understand people prefer a physical coin but it is a more expensive way to deal anything. Paper is obviously cheaper to process

I like that Elm sells 1/2 Sovereigns for no extra cost so you dont have to buy all at once, I think that price will alter 10 times a week.
I dont find gold cheap now but I'd not say to stay completely in cash either


Apart from high yield or foreign currency bonds, I dont like bonds either. Rates are low and will get higher

You are not interested in a house?

jimjames

Remember with gold you won't get any interest so you're losing 5% of your capital immediately with no cash return. The capital value also isn't guaranteed unlike your savings. So if gold increases by 30% then you'll have done well but equally it could drop 30% and you'll be back to £10k from your £15k.

Share based funds have the chance of dropping too but are based on company profits not just people's perception of the value of gold.

Sarah920

I appreciate the problems with gold, yeah - that was more a long term investment just to hold value in the event of the end of the world etc. I have considered property, but there's not a lot of places that you can buy a house for £10,000 (e.g. run down council houses) and expect to make money from it, surely?

I have looked at funds again and via looking up tax free saving plans with friendly societies, stumbled in M&G Investments. It seems less headachey than just buying shares through a stockbroker - are they useful?

jimjames

In my view tax free friendly society plans should be avoided like the plague. Poor value, high charges and no flexibility for starters.

If you are prepared to risk money then shares via an ISA would be worth considering. Something like the Hargreaves Lansdown Vantage ISA that allows you to choose from 2000+ funds all held tax free. For starting out something like a HSBC UK tracker could be worth it, investing in the top 100 companies in the UK but as around 70% of their income is derived overseas it also gives you a good exposure elsewhere.

Asheron

Don't buy paper anything............. Only buy Physical Gold and Silver, and keep it at your home.

RDB

Asheron wrote: »

Don't buy paper anything............. Only buy Physical Gold and Silver, and keep it at your home.

That is right. Do not buy a paper certificate until you have researched it well.

You will find there are 100 times more ounces of silver on paper in the world than real ounces of silver. This is going up as ETF`s and certificate programs keep on taking currency off people and giving them a bit of paper promising silver. But they do not go out and buy real silver with the currency because there just is not enough silver available in the world.

Asheron is right buy real silver bullion and store it yourself where no one knows about it. Not in the bank vault where more people than think will know about it.

shaun_from_Africa

You can store a box in the vault of most high st banks for a little as £35 a year, and you don't have to declare what is in it.

Keeping gold bullion in your house is fine until it gets stolen.

Dell

shaun_from_Africa wrote: »

You can store a box in the vault of most high st banks for a little as £35 a year, and you don't have to declare what is in it.

Keeping gold bullion in your house is fine until it gets stolen.

In the past governments have confiscated bullion from bank vaults.

I wonder is there more risk of having a vault robbed or your safe in your home? I remember that saftey box storage place in Golders Green getting robbed not long ago and everyone just lost everything because they didnt tell anyone what was in their boxes how could they prove it for insurance?

I agree the best thing is get a very good safe in your home and keep it well hidden and most importantly do not let anyone know you are buying and storing silver bullion.

mike88

You wrote: "I thought that it might be an idea to put at least some of it into a bit more solid than a bank account that will hold it's value."

What makes you think gold holds its value? Like shares the price of gold can rise and fall. It all depends on the price you pay and the price you dispose. In all honesty your investment strategy is ill conceived.

If you are a student you will probably want access to this money in the nearish future so I would stick with what you have got. I wouldn't even bother with shares because you are in danger of committing the typical novice mistake of buying when the market is high.

shaun_from_Africa

In the past governments have confiscated bullion from bank vaults.

When exactly was the last time this happened in the UK? and how would they know what was stored in a sealed box in a bank vault?
This sort of unsubstantiated scare tactic does nothing to help a reasoned debate.

I wonder is there more risk of having a vault robbed or your safe in your home? I remember that saftey box storage place in Golders Green getting robbed not long ago and everyone just lost everything because they didnt tell anyone what was in their boxes how could they prove it for insurance?

More risk having a bank robbed??
How many bank robberies do you think that there are each year in the UK compared to the number of houses broken into?

As to telling no one about your bullion.
What about the people you buy it from, the people who deliver it, the shop or person that you buy a safe from etc.
They would all have a pretty good idea.

I agree that it's not practical to keep silver bullion in a bank due to the weight and volume of it, but IMO, gold is a different matter.
The box I have in my local bank only contains gold coins (all insured with a company not affiliated with the bank) and all I need for insurance purposes is a copy of the receipts provided when I purchased the bullion.