What Type Of Gold Investment Is Best?

Ryan_Futuristics

MrAndMrs wrote: »

How would you go about P2P lending? I always considered it to be pretty risky if it went wrong. Have you done P2P before? How did you do it?

Well many will tell you gold was once considered a very good hedge against inflation, and at one point portfolios would routinely hold 25% or more gold

But nowadays its price tends to be a little volatile and the risk/reward profile of holding it tends to be a little less appealing than other asset classes ... So today, many would advise no more than 2-5% in gold


Re: P2P lending

Well it's quite a new sector, so no one really knows the risks yet - although Zopa has been around a while, and has weathered a financial crash relatively unscathed

I think people would consider it risky when compared to a saving account - because there are more theoretical risks, such as your capital investment not being guaranteed, and a degree of uncertainty in bad debts

But compared to most other investments (such as bonds, property and stocks) so far it seems to be a fair bit lower down the risk spectrum

I'm currently splitting my money between RateSetter (at 5.9% interest over 5 years - with the ability to take an income and withdraw money early), and FundingCircle (at 7-8%)

RateSetter is very easy to use, and has a protection fund in place, while FundingCircle is slightly higher up the risk/reward ladder, and I use the Autobid feature, and opt to lend no more than £20 to any one company (so with at least a £2,000 investment, your money is well diversified, so no single bad debt can hurt your savings too much)

So far I've been very happy with both of them - they're among the largest 3 P2P lending provides, and they're government regulated ... I suspect the risk to the sector would be a financial crisis which made it difficult for lenders to repay - but then there probably wouldn't be many hiding places from such a crisis ... Still, I limit my allocation to 10-12%

Linton

MrAndMrs wrote: »

I don't want lots of the stuff, only 10% as a hedge against inflation. I hear it's a good hedge...?!


I'm glad that you agree (in a round about way) that ETFs are worthless. I completely agree with your points so was trying to wrap my head around why people still suggest it over holding physical gold.

Trouble is unless you are considering timescales of centuries the volatility of gold is more significant than inflation linking. See here
- between 1913 and 1970 the inflation adjusted price of gold halved. Between 1980 and 2000 it dropped 80%. Over some other periods you could have made massive real profits. Feeling lucky?? Its nothing like the equivalent of an inflation linked bond.

I am not saying ETFs are worthless if you want to balance against something very different to equities. eg start with 10% gold, 90% equities. Wait until prices change so that you are say 15% gold and 85 % equitities, sell the excess gold and buy extra equities to return the balance to 10/90. If prices go the other way sell excess equities to buy more gold. In this way you are continuously buying when prices are low and selling when high. Whether the loss of 10% potential equity investment would be justified by the gains of rebalancing I dont know.

block10

MrAndMrs wrote: »

I don't want lots of the stuff, only 10% as a hedge against inflation. I hear it's a good hedge...?!

Why hedge at all in an era of deflation?

agent69

Ryan_Futuristics wrote: »

Re: P2P lending

FundingCircle is slightly higher up the risk/reward ladder, and I use the Autobid feature,

So far I've been very happy with both of them - they're among the largest 3 P2P lending provides, and they're government regulated ...

Here we go again with your questionable assistance.

• You still use auto bid on FC despite all the advice you have been given to the contrary (http://forums.moneysavingexpert.com/...d#post58252637).

• All P2P platforms are government regulated

• Why would you lend on unsecured FC loans at 7 - 8% when you can get secured loans at 10 - 13% on AC, TC, SS and Abirate?.

And by the way you can currently get 6.2% for 5 year loans on Ratesetter

agent69

agent69 wrote: »

Here we go again with your questionable assistance.

• You still use auto bid on FC despite all the advice you have been given to the contrary (http://forums.moneysavingexpert.com/...d#post58252637).

• All P2P platforms are government regulated

• Why would you lend on unsecured FC loans at 7 - 8% when you can get secured loans at 10 - 13% on AC, TC, SS and Abirate?.

And by the way you can currently get 6.2% for 5 year loans on Ratesetter

forgot to mention that Ratesetter has a 1% splashback offer until the end of next week.

redux

MrAndMrs wrote: »

I don't want lots of the stuff, only 10% as a hedge against inflation. I hear it's a good hedge...?!

Gold has dropped about a third in the last 3 years.

And you can find some people predicting it will go down for 5 to 7 years.

Kendall80

redux wrote: »

Gold has dropped about a third in the last 3 years.

And you can find some people predicting it will go down for 5 to 7 years.

Its up quite a bit these last few months I recall. Past performance......


Edit: Investec global gold is up 25% in the last month.

Generali

If you want a hedge against inflation buy an inflation-linked Government bond.

If the British Government defaults on Sterling debt you're going to have a lot more to worry about than your retirement income.

If you really want to invest in Gold, buy a decent ETF like one of these 2:

http://etfdb.com/issuer/state-street-spdr/
http://etfdb.com/issuer/ishares/

This is what Warren Buffett has to say about Gold:

Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.

Read more: http://www.minyanville.com/trading-and-investing/commodities/articles/Warren-Buffett-brka-gold-investing-investing/10/3/2012/id/44617#ixzz3PcDJUYEL

Kendall80

It is really shiny though!


Seriously.... maybe Buffett should have a good read of this page http://geology.com/minerals/gold/uses-of-gold.shtml

TheTracker

MrAndMrs wrote: »

I'm hoping to retire in the next few years am looking to invest in a BTL property with the intention of using the income as a little bonus on top of my hard saved pension. I would also like to put 10% of my portfolio into gold. I'm trying to work out all the pros and conns of investing in either gold exchange traded funds or holding physical gold bullion. Or is there a better way than the two ways suggested above? Would really appreciate any comments from anyone who has invested in gold before or even looked into it and may be decided not to. Thank you.

I know someone who sings the praises of BullionVault. Have you looked?

Personally I wouldn't go near Gold for the reasons others have provided. And Gold plus BTL sounds terribly risky.