Better Buy Gold

EdGasket

I own gold but in ETF form. Much safer and the buying/selling costs are much lower than for actual gold. I think it should do well with more QE on the way.

jimjames

pop_gun wrote: »

I brought a gold one ounce sovereign at the beginning of last month and the value of it has increased by over £100.
That's better than any savings account I could lay my hands on.

I think many avoid storage cost by not advertising the fact they own it.

Anyone else investing in physical gold?

I made £150 from opening a bank account, that's 50% more than your gold.

Anyway the actual amounts are irrelevant, it's the percent that matters. You also can't compare it to cash in a savings account that is guaranteed.

Far more realistic to compare to shares, I've certainly made more than £100 on my share portfolio since last month.

jimjames

pop_gun wrote: »

The company I currently working for, don't even know where I live. :rotfl:

You might say I'm a very private person.

I find that very hard to believe.

I'd expect every company needs to know the address for their employees, apart from HMRC purposes also for being able to communicate with their staff as well as pay slips etc.

pop_gun

DiggerUK wrote: »

No you didn't. No such thing as a one ounce sovereign.
..._

You are right!

2015 one ounce Britannia. And yes you could purchase them last year.

I don't know why I keep thinking of them as sovereigns.

oh well..

pop_gun

jimjames wrote: »

I made £150 from opening a bank account, that's 50% more than your gold.

Anyway the actual amounts are irrelevant, it's the percent that matters. You also can't compare it to cash in a savings account that is guaranteed.

Far more realistic to compare to shares, I've certainly made more than £100 on my share portfolio since last month.

It seems everyone on this board is promoting stocks and shares and talking about portfolios.
I forget whether it's the DOW Jones or the FTSE that hasn't recovered it's 1999 highs. Which means long term investors have lost money. There's also brokerage fees and premiums associated with owning stocks and shares. So please spare me the spiel about investing in companies which are more often than not, a hair's breadth from insolvency.

I don't buy gold for it's monetary value (despite what I wrote in my original post about it's current price) but as a hedge against inflation and the likelihood of a new Bretton woods system.

bowlhead99

pop_gun wrote: »

It seems everyone on this board is promoting stocks and shares and talking about portfolios.
I forget whether it's the DOW Jones or the FTSE that hasn't recovered it's 1999 highs. Which means long term investors have lost money.

When someone thinks that everyone else in a room is an idiot, that person should pause for a moment and consider whether it is they that is the idiot.

What the idiot has done in this case is misunderstood what the index is trying to represent, and has forgotten that the constituents of the indexes pay the owners of the shares a nice annual dividend of several percent, which is something that a gold coin does not. On a total return basis (capital plus reinvested income) the FTSE100 had recovered its 1999 peak after about 6 years. The DJIA had recovered its Jan 2000 peak by summer of 2006 even without counting the dividends. Now some 9 years later on they are both significantly higher than that on a total return basis.

If you had been unlucky enough to buy FTSE 100 at its 1999 peak you would have been annoyed that it fell around 40% in the next 3 and a bit years, sure. Of course, gold did that too when it went from £1175 an ounce in 2011 to £725 in 2014, so all markets are volatile in the short term and it's only long term that is worth looking at.

The reason people talk about portfolios is there is more to a market than the index you hear quoted on the news (and misunderstand). The FTSE 100 is just the largest 100 companies listed in London, and weighted very much to certain industries and, as such, is not representative of the UK market or the UK economy. The FTSE 100 excludes a couple of thousand other smaller companies listed in London, many of which will perform better than the giants of the London market over the long-term. A sensible long term investment strategy has little to do with the capital values of one or two quoted indexes which dominate the daily press. It would instead be globally diversified and cover lots of asset classes.

It could even include some gold, but as gold just sits there and doesn't make or create anything it is pure speculation that people will want the shiny metal as much in the future as they want it today, in real terms.

I don't buy gold for it's monetary value (despite what I wrote in my original post about it's current price) but as a hedge against inflation and the likelihood of a new Bretton woods system.

Commodities can be used as a hedge against inflation, sure. If a pound buys fewer (or smaller weight of) certain physical goods in the future due to inflation, then it can be good to have bought the item earlier so it costs you fewer pounds, if it doesn't perish. Then you can use it in the future when you need it. This is true for toilet rolls or barrels of oil. It can also be true for bars of gold, except unlike the Andrex or the Mobil One you don't actually have a personal use for the bar of gold so you are relying on someone buying it off you.

So with the gold you are speculating on the future supply and demand, hoping that the world will decide that it needs or wants gold in the future as much as it needs or wants gold today., in real terms. If gold becomes really popular you will do OK. But perhaps you will wish you had bought palladium or titanium or graphene or whatever element or compound has significant demand a few decades from now combined with short supply. If you wanted to 'hedge your bets' properly you should have a portfolio of all metals and commodities.

And then in doing that and realising they don't all fit under your bed, you may come to the conclusion, like others here, that buying fractional ownership of tens or hundreds or thousands of companies around the globe in multiple regions and industries that grow with the world economy is likely to be a smarter move.

dunstonh

I forget whether it's the DOW Jones or the FTSE that hasn't recovered it's 1999 highs. Which means long term investors have lost money.

Rubbish. you forget dividends

Whilst you look up the real facts about investing, you may wish to check gold trends over longer periods rather than short term periods.

DaveTheMus

markwilkinson wrote: »

To my mind, physical gold isn't an investment, whilst I do hold it.

Remember what you paid for that Coin? Now go to somewhere like the Bullion By Post website and see what you can sell it for. I doubt you have made £100, in real terms.

Gold, in physical form is a funny thing. I buy it when I have spare funds and nothing else tempts me. I am rather reckless in the sense the price doesn't bother me. I buy it for my beneficiaries - they can decide to sell or keep, won't be my problem!

There are one or two companies that if you buy from them they will buy the bullion back from you at 1% below the current spot price...

Ryan_Futuristics

dunstonh wrote: »

Rubbish. you forget dividends

Whilst you look up the real facts about investing, you may wish to check gold trends over longer periods rather than short term periods.

It's not been great though - assuming you bought-and-held near the peaks in 1999 or 2007 - when you subtract fees (prior to compounding) and factor in inflation

An inflation-adjusted FTSE 100:



I think we are fed a little over-optimism from fund (active and passive) providers ... I'm a big Emerging Markets investor, and we've had sideways markets since the crash - and it's been possible to add value, but only by consistently buying on dips, using valuation, pushing that average price down

Nocto

To quote Warren Buffett:

"Gold gets dug out of the ground. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. Anyone watching from Mars would be scratching their head!"