How to invest in Gold ?

Mishomeister

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billybluehat_2

I subscribe to Moneyweek magazine they always have a section on investing in gold. http://info.moneyweek.com/ wish i had £5k to invest

Mishomeister

Any more suggestions, maybe without subscribing to anything?

DiggerUK

Mishomeister wrote: »

I am thinking of investing in gold............. So which are a reputable firms? I have done some research on Google and found a few articules with tips and recommendations, but not sure how trustworthy they are......

Check out Daily Telegraph site.
Most sites with info are sellers of gold so they aint going to rubbish what they sell; so caveat emptor, as well as DYOR.
Get to know more about gold before you buy.

Do a search on MSE as well, lots of regular threads and comments.
Pay particular attention to anything I say, I'm a self made guru of gold you should know. :rotfl:
..._

Jegersmart

Buying gold is very much like buying a single company share in terms of outright risk. Gold could easily lose half its value in a very short period if money flows out into something else. I would stay clear or invest only a small part of your portfolio in gold. imho, dyor.

jon3001

Mishomeister wrote: »

I am thinking of investing in gold. I have never done it before but still believe it will provide a better return for my £5000 savings, than my Cash ISA with 3%APR. I am looking for some newbie guides on how to start, which firm to use to buy it. So which are a reputable firms? I have done some research on Google and found a few articules with tips and recommendations, but not sure how trustworthy they are. All I am looking is a newbie guide, suitable for someone living in London and list of reputable firms to buy it from.

How much of a return above 3% pa are you aiming for and what risks are you willing to take? Is gold investment the right way of achieving that?

Gold is 15% higher than it was last week (in USD terms). Next week it could be 15% lower. Are you prepared for those kind of swings?

I get the impression you want to buy physical bullion from a dealer in London. Are you aware that bullion coins will typically have a buy/sell spread of 7.5% or greater (equivalent to 2.5 years return on your cash ISA).

I own some gold, silver and other commodity investments as part of what I consider a balanced portfolio. I would never consider it a substitute for a savings account.

moneyfoolish

I bought £2000 of BlackRock Gold & General Accumulation Units on July 21st as I believed the Stockmarket was heading for disaster. This proved to be correct but whilst Gold has gone up by 8% so far this month, my units have gone down by 10%!!!!!! Are there any financial experts on here who can explain why because I don't understand at all? The units have gone Ex-Dividend which would explain some of the fall but the company has 80% in Gold Mining Stocks. The units are valued in dollars but then so is gold!

Aegis

russell_anderson wrote: »

I bought £2000 of BlackRock Gold & General Accumulation Units on July 21st as I believed the Stockmarket was heading for disaster. This proved to be correct but whilst Gold has gone up by 8% so far this month, my units have gone down by 10%!!!!!! Are there any financial experts on here who can explain why because I don't understand at all? The units have gone Ex-Dividend which would explain some of the fall but the company has 80% in Gold Mining Stocks. The units are valued in dollars but then so is gold!

You're investing in equities of companies which mine gold, not gold itself. As such, you have to expect to be affected by equity market movements as well as the price of gold. Due to the risk associated with mining companies, you'll probably see more volatile movements than the main indices around the world.

EdGasket

There are Exchange Traded Funds (ETFs) that can be bought like shares which invest in Gold the metal rather than gold shares but be careful to check exactly what the fund is invested in so you don't come a cropper like russell_anderson above. Alternatively there is Bullion Vault which holds the gold for you 'securely' and you get a receipt - don't think it's covered by the FSA protection though. Personally I would buy gold mining shares as they have come down with the market but should be making plenty of dosh on the high gold price. I suggest Petropavlovsk (dealing code = POG) as being exceptional value right now.

moneyfoolish

Aegis wrote: »

You're investing in equities of companies which mine gold, not gold itself. As such, you have to expect to be affected by equity market movements as well as the price of gold. Due to the risk associated with mining companies, you'll probably see more volatile movements than the main indices around the world.

Yes, I understand that but it's seems still completely illogical to me that if gold is shooting up the stock price of companies mining it will go down! After all, it's not as though I'm investing in a mining company directly but a unit trust which holds a spread of companies and assets.

gadgetmind

russell_anderson wrote: »

I bought £2000 of BlackRock Gold & General Accumulation Units on July 21st as I believed the Stockmarket was heading for disaster. This proved to be correct but whilst Gold has gone up by 8% so far this month, my units have gone down by 10%!!!!!! Are there any financial experts on here who can explain why because I don't understand at all?

Because the gold mining companies tend to be in dodgy territories and have also been pretty rubbish at returning their bonanza to shareholders.

I sold that Blackrock fund on July 20th in both my ISA and my wife's as I had gone right off the underlying story and I had also just crept slightly into profit. I put most of the money released into Ruffer Total Return, which has weathered the last week pretty well, but also put some into Lloyds ordinaries, at just under 42p, just before they fell to 33p.

Ah well.