investing in gold/silver and possibly trading online? any tips advice?

wakkaday

i want to invest in gold/silver as i believe this is a good investment and cheaper for me at this stage then investing in a property

at the moment i have 2 x 1oz gold coins

i would love to trade online to make some money, i know its a risk, but are there any tips/advice any helpful members can offer?

i would appreciate any guidance... i have tried googling but sometimes have someone telling you rather then reading from pages and pages of articles its easier to understand..

thank you

le_loup

Tips and advice?
Don't do it.

ChesterDog

What makes you think it's a good investment?

For me, good investments are those with a healthy prospect of growth, preferably coupled with the ability to pay an income.

Gold has its good patches - usually when everything else looks like toast - but doesn't have the long term dependability of other assets. Except when it's at bottom of one of those irregular cycles.

wakkaday

great, where would you say invest? surely gold is a good asset to hold and has value against paper money etc

StumpyPumpy

Who told you this was a good idea? The person that sold you the coins, maybe?

If we look at the most well known 1oz bullion coin - the Krugerrand - Current market price today is $1241.26. At close of play on 2/1/2013 it was $1687.625. A loss of 26% in 22 months. If you bought at the beginning of July it would only mean a loss of 6.5% in 3 months.

Advice? The same as playing poker - Even the experts can lose money, but when they win big they do so at the expense of those that do not understand the basics of the game.

SP

ColdIron

Gold is not an investment, it's a store of wealth and a hedge against currency collapse. It pays no dividends and if you are betting on it's price going up (or down) this is therefore speculation

I'm a big fan of gold but recognise that it is not an investment, by all means buy a few more coins but don't expect to make any money from it

wakkaday

ok i take your point...
i want to get involved in trading as an amateur online to hopefully make some cash, i know its risk (a bit like poker)

any good stockbrokers/sharedealing website worth registering too?

ChesterDog

I know it all sounds like wet blanket day, but trading anything online, from a standing start and as an amateur is going to make money, but it will be for someone else.

Many investors in shares, commodities, bonds and the like try a bit of trading before realising it's a mug's game. Charges, spreads, the market - it's all against you. You might do well, but that has a very low probability. The surest way to make money out of the markets is to avoid lots of trading, choose carefully, buy well and hold.

DiggerUK

wakkaday wrote: »

.....i would love to trade online to make some money.......

Dream on, especially with gold.
I'm a huge fan of gold long term, but if you harbour fantasies of making a fortune..........fools and their money etc..
..._

ChesterDog

Wakkaday, all the responses here are likely to be similar: this is the MSE Savings & Investments forum.

You need somewhere with a Gambling & Speculating forum. :-)

puk999

wakkaday wrote: »

i want to invest in gold/silver as i believe this is a good investment and cheaper for me at this stage then investing in a property

Are you only considering precious metals and property for investment?

Are you already invested in stocks/shares (perhaps via funds)? By all means buy a property if you need a roof over your head, but if this is pure investment only, funds are ridiculously simple, have a great track record in the long term, and are easy to liquidate. Stick it all into an ISA too for tax free returns. Once you have taken on some market risk, then look to diversify into precious metals and property.

Gold coins are nice (I have a few) but look at the gold chart for the last few decades. It looks expensive on that time frame. The coins are a PITA to sequester away from prospective thieves and just sit there looking all nice and shiny but not providing dividends. The spread is awful. Buy a gold coin and the next day sell it to the same dealer and you'll lose a ton of money. You also need an exit strategy for the coins. eBay have just raised the final value fee ceiling so you'll pay them a big whack to sell a 1oz gold coin. Then there's the buyer on the other end who'll claim you've sent them a fake (and they'll "prove" it as they'll have acquired a fake coin of the same type from someone else).

Property has its downsides too. Regulations to abide by (boiler/electric certifications, legionella risk assessments, etc), vacant periods, disrespectful tenants who trash the place and don't pay the rent, taxation of rental income, CGT on disposal of property, etc.

Have you an emergency cash fund? This can be useful to have in place before investing so you don't need to liquidate investments for unplanned expenses (e.g. broken car, job loss). Then get some funds within pension and ISA wrappers. Then buy a few precious metals for fun. The usual figure I see banded around is about 5% of your investment portfolio in PMs.