Taking out a personal loan to invest in Gold

atush

Ark_Welder wrote: »

It could be some investors that have been in for a long time and have decided that now is a good time for them to get out.

Do you have anything to back up your statement that it might be the UK's reserves and give your statement some credibility? One of the major problems with gold is the amount of conspiracy theories and out-and-out gossip that is basically a lot of chaff.

Too right Ark. A profit isn't a profit until you sell. Like i did when I sold some of my holdings at just over 1400. Yes, I suspected it would go higher but I wanted to lock in some profits at over 100% from the buy.

But that doesn't mean those of us selling and crystallising profits are selling it all- just a phased withdrawal.

lvader

Are personal loans really cheap at the moment? I thought around 10% is typical, which is hardly cheap.

atush

gadgetmind wrote: »

Investment Trusts are allowed to gear, and many do, but they keep it down to 10-15% of their NAV. The justification seems to be that they don't have the opportunity risk of a large cash holding while still being able to react to opportunities.

I have *once* borrowed money to make an investment. I drew down an extra £50k on my mortgage (with Leeds Perm) and stuck the money into a Leeds Perm savings account, and thus qualified for £12k+ of free Leeds Perm shares. Oh how I miss carpetbagging!

Gadget, I too remember those days lol. But I was a more a 500 quid to 5 K gal, not a 50K bagger ;-) I bagged a few in my day, but only a few.

But in your case, the capital, having been deposited and held as cash, was not at risk. Apart form the lost interest if the demutualisation didn't proceed. Not the same risk as is involved in comodities trading. WE saw gold take a bit hit earlier before this latst rush. New ones getting in could be caught out if they needed cash in a hurry.

Geoff23

Ark_Welder wrote: »

. .

Ten years ago, nearly everybody thought Peak Oil was a conspiracy theory. It turned out to be true. The internet is an unmediated source of information. That is a double-edged sword. On the one hand you have to sort through a lot of rubbish to find the good stuff. On the other, it is possible to find information that you would otherwise have not found out about until much later, if at all.

Extracting useful information from the internet is a black art in its own right.

32rclint95

Don't borrow to invest. It is similar to someone borrowing money to play roulette except more financially risky.

jon3001

32rclint95 wrote: »

Don't borrow to invest. It is similar to someone borrowing money to play roulette except more financially risky.

In what way is borrowing to invest more financially risky than borrowing to play roulette?

paul5046

deutsch wrote: »

This long term loan, would be a long term investment in Gold for 5 years.

I just have a feeling for the next half decade, Gold is going to shoot up so much more than the low interest rate loans that are available.

I have money to invest in gold, but combining it with a loan, would mean I could buy more.

Bonkers mate. Read JK Galbraiths book about the Wall street crash, this is exactly what hapened. People borrowed money to buy shaers, in the hope of making money.

Bonkers.

Geoff23

I think the problem here is not so much the risk but the guaranteed overheads. You have to pay quite a bit of interest on the money you have borrowed, on top of the actual costs of the transaction and possibly also storage/security costs. Gold has to go up considerably more for this to be worthwhile than it would if you were just converting cash savings. Now...if you happen to think gold is going to the moon then maybe it is still worth doing, but otherwise it probably isn't.

Ark_Welder

Geoff23 wrote: »

Ten years ago, nearly everybody thought Peak Oil was a conspiracy theory. It turned out to be true.

Crude oil is a finite resource. Therefore, production will peak and then diminish. That isn't a conspiracy. That is common sense reasoning.

Geoff23

Ark_Welder wrote: »

Crude oil is a finite resource. Therefore, production will peak and then diminish. That isn't a conspiracy. That is common sense reasoning.

Sure, but the question is when. There is no better example of innaccurate official statistics than those for oil reserves, especially those of the OPEC countries.

My point was that ten years ago, most people thought that the idea of conventional oil production peaking in the near future was a crazy thing only believed by viewers of dodgy websites. Since then things have changed, although some people out there still think it [peak oil having already happened 2005-2008] is nonsense.