Time to Buy Gold?

chucknorris

Aegis wrote: »

Picking exactly eight years (i.e. from 19 October 2007), an average UK All Companies fund has generated 40% returns with dividends reinvested.

4.3% annualised return, or thereabouts, which is pretty good considering what happened in 2008.

Without actually looking, that's what I thought too, shares have recovered well since 2008, and of course shares pay dividends (unlike gold, unless the investment is in a gold related share investment).

atush

DiggerUK wrote: »

Digger Mansions pile of gold came in at an average cost of under £650 an ounce.
From a high point of £1170 an ounce, it has gone down to sub £700. We would like it up higher of course, but who here could have survived a 40% hit on their portfolio and survived.

Other point to take in to account is the difference in gold prices, and equity prices, between now and 2007. Even with dividends included, equity investments aren't a lot to shout about. By all means ride the boom, but what is suggested when this boom goes bust.

Digger Mansions can at least sleep easy in the interim..._

And what income has your portfolio returned to you over the period?

Zero,

redux

DiggerUK wrote: »

We would like it up higher of course, but who here could have survived a 40% hit on their portfolio and survived.

Other point to take in to account is the difference in gold prices, and equity prices, between now and 2007. Even with dividends included, equity investments aren't a lot to shout about.

Electra Private Equity: 1999 £5 to £6, 2007 £16, 2008 £8, 2015 £34

Jupiter European Opportunities IT: 2001 75p, 2007 200p, 2008 100p, 2015 550p

RIT Capital Partners: 1999 323p, 2007 £11, 2008 £8, 2015 £16

Scottish Mortgage, Baillie Gifford Shin Nippon, etc

Plus most have dividends of 1 to 2%, which compound the return if reinvested

DiggerUK

The recent crisis showed how gold really shines when markets go south. The markets went south after 2007 because of easy money sloshing around.
Markets are holding for now because of low central bank rates, and QE providing lots of cheap money to buy up assets that aren't worth a lot (Lloyds being a case in point).

To ignore the fragility of this rekindled boom is scandalous. It is as clear as daylight what is going to happen to this boom.......it's going to end like the last one, and then what does everybody plan to do.

I am as sure as I need to be, that more easy money is coming, and interest rates will stay down. This will keep the sugar rush to the markets, and hold gold in a bear market, as good a time as ever to buy for the long haul.

For what it's worth I feel gold will be hide bound between £700 and £800 an ounce for a while yet, but don't quote me..._

atush

Well I know what I plan to do.

Sell the rest of my gold (bought int he low $600s, not GBP) and buy equities int he dip.

I wont buy gold again til it is well sub $1000

redux

summary of gold prices for 200 years:

______________ total return; annualised

1800 > 1930 _______ 0 _________ 0

1930 > 1970 ______ x2 ________ 1.7%

1970 > 1979 _____ x10 ________ 26%

1979 > 2004 _______ 0 _________ 0

2004 > 2012 ______ x4 ________ 19%

2012 > 2015 _____ x0.5 _______ -20%

So there don't seem to have been many times in the last 220 years when it would have been good to buy gold, and not much sign to do it right now.

Compare that to an old advert I remember for a certain investment trust, which said £1000 invested there in 1945 would by then be worth £1 million. Now probably 3 or 4 times that.

sabretoothtigger

1000 was a ton in 1945 though. No wonder its worth over a million now, compounded growth thats great but also some of that is just inflation.

1945 £ 8.40 for oz gold
Live Gold Price £757.926
so 1,000 sat in a block of metal is now 90k
Leave it there and it might be 180k in a few years

Neither situation is exactly realistic because people use their money or capital and they have to employ it in meeting costs such as housing. We cant always choose when to sell 2008 would have been a bad time for a bill, I think a mix of both strategies is best. Dont sell all or buy all into either


Gold isnt supposed to do anything at all, whats changing is the overvaluation of sterling and dollars back and forth. People attempt to speculate when but are misled into thinking this is the fault of gold for altering so much. Clearly the metal never grows nor retracts, its just a plain store of value.
If gold ever goes back up in price, whats happening is the currency value is drastically falling because of QE or whatever has failed.
Growth from a good investment would be better but then most business is global so its money outside of sterling, etc Its more complicated

http://www.measuringworth.com/ukcompare/

redux

sabretoothtigger wrote: »

1945 £ 8.40 for oz gold
Live Gold Price £757.926
so 1,000 sat in a block of metal is now 90k
Leave it there and it might be 180k in a few years

37 to 1150 dollars is up about 30 times, not 90

sabretoothtigger

I was quoting Sterling, so I meant 1945 got 119 ounces of gold and thats £90,000
Our exchange rate varied with USA greatly since the war, did I get the maths wrong.

Its confusing to follow gold price in dollars because we set our own course. Same with foreign shares, if sterling went back to $2 I'd be worse off even if markets went to new highs probably. BP pays a dividend set in dollars so some people now are liking that foreign income

panpoul

I was also thinking to buy some gold but i think that i should wait a little more..