Gold and Silver advice

masonic

alexanderalexander wrote: »

I think you're right that it might smooth overall returns (which is not to be sniffed at entirely -- some people really value smoother returns, whether from an emotional or practical rationale), but I'm not sure it'll increase overall returns in the long term as the gold will usually go back down as the equities go back up (as has happened over the past three or four years).

There are a minority of scenarios where, by virtue of its volatility, a fixed asset allocation to gold with rebalancing could lead to superior returns, but the general case would be a smoothing effect with overall lower returns as you state. Given the long term real returns of gold (near zero) vs. equities (~6%), this is not surprising. With a basket of uncorrelated assets with more similar returns, a positive effect from a rebalancing approach is more likely.

shortcrust

I buy a gold sovereign every year. A drop in the ocean really and bought more as an indulgence than for investment purposes. I like having gold in a slightly Gollum like way. I don't see me selling any for many years to come but I enjoy tracking the price.

redux

If you are determined on this path, though I'm with the people not recommending it, the Royal Mint now trades gold, just as an online account, i.e. not for people who want to look at it as well.

https://www.royalmintbullion.com/Launch/SignatureGold

[Deleted User]

Buying gold/silver shouldn't be seen as a speculative investment (though you can occasionally make a good profit) but as a hedge towards either hyperinflation or currency collapse. It is true that it doesn't bear interest in fiat currency, but if one day you wake up and your bank has gone bust or the government has ordered a bail-in, you wish you had some spare gold left.

ColdIron

I am a bit of a gold bug, I have a useful amount bought during the Brown Bottom, but have never been that keen on silver. For those considering whether to buy gold or silver consider this

£40K of gold is about 50 1 oz coins, these will occupy less than the space of a bag of sugar even in their plastic holders

£40K of silver is about 4,000 1 oz coins, I have no idea how much space that is but it's 17 stone or about one Eric Pickles

I know which one I'd rather be carrying while trying to escape ze Germans

grey_gym_sock

ciaccino wrote: »

Buying gold/silver shouldn't be seen as a speculative investment (though you can occasionally make a good profit) but as a hedge towards either hyperinflation or currency collapse. It is true that it doesn't bear interest in fiat currency, but if one day you wake up and your bank has gone bust or the government has ordered a bail-in, you wish you had some spare gold left.

that's all very well, but holding a very small percentage of your wealth in gold won't give you much protection in those circumstances. and holding a large percentage will tend to drag down your investment returns in the long run.

there are more effective ways to protect yourself against hyperinflation: buy real assets which tend to have better investment returns, such as shares and property. and perhaps buy assets in other countries or currencies.

if you're rich enough, and paranoid enough, that could involve owning homes and bank accounts in multiple countries. if you're less rich, it could involve making a world equity tracker a significant part of your portfolio (and owning your main home).

[Deleted User]

grey_gym_sock wrote: »

that's all very well, but holding a very small percentage of your wealth in gold won't give you much protection in those circumstances. and holding a large percentage will tend to drag down your investment returns in the long run.

there are more effective ways to protect yourself against hyperinflation: buy real assets which tend to have better investment returns, such as shares and property. and perhaps buy assets in other countries or currencies.

if you're rich enough, and paranoid enough, that could involve owning homes and bank accounts in multiple countries. if you're less rich, it could involve making a world equity tracker a significant part of your portfolio (and owning your main home).

This is perfectly valid and legitimate analysis if you believe that fiat currencies will go on forever. I don't and don't expect many to agree with me.

grey_gym_sock

ciaccino wrote: »

This is perfectly valid and legitimate analysis if you believe that fiat currencies will go on forever. I don't and don't expect many to agree with me.

i don't think i was making any such assumption. the point of real assets is that their value is not tied to any currency. this applies to shares in businesses, and to real estate, as well as to gold. shares and property are plausible investments to hold when any 1 (or more) fiat currency collapses, as has happened many times. i don't expect all fiat currencies to collapse at the same time; but does that change the analysis?

atush

if you're rich enough, and paranoid enough, that could involve owning homes and bank accounts in multiple countries. if you're less rich, it could involve making a world equity tracker a significant part of your portfolio (and owning your main home).

Does 3 homes in 3 different countries and bank accts in 3 different countries count?

We have this, but I dont consider myself either rich nor paranoid

shortcrust

ColdIron wrote: »

I know which one I'd rather be carrying while trying to escape ze Germans

There was me thinking I was the only one who likes to imagine fleeing across the border with my gold hidden in the seams of my coat!:D