Is it worth investing in gold?

Mistermeaner

dunstonh wrote: »

So, you are just limiting yourself to 100% in three different options? Investing 100% in any one option is never the best way. However, you are jumping all over the risk scale. Risk is not on/off. It is a sliding scale.

If you S&S ISA was wiped out then you wouldnt care as you would be too busy boarding up the windows, stockpiling weapons, water and cans of beans.

Only a fool would go 100% into beans - diversity is king: tuna, chickpeas, spam all offer viable alternatives.

atush

And if I invest my money in a S&S ISA, that could all be wiped out if the markets crash.

As Gadget said. it isn't wiped out if the markets crash- it is worth less on paper. It is only wiped out if you sell in a panic.

Which is whay you are supposed to have cash reserves to use if you really need money and the market is going down?

ValiantSaint

dunstonh wrote: »

So, you are just limiting yourself to 100% in three different options? Investing 100% in any one option is never the best way. However, you are jumping all over the risk scale. Risk is not on/off. It is a sliding scale.

If you S&S ISA was wiped out then you wouldnt care as you would be too busy boarding up the windows, stockpiling weapons, water and cans of beans.

Well, as you can see, I'm not the most clued up about investing, and to be fair, it's all a bit confusing. I've not a clue where to start

snowqueen555

Gold has a markup when they are minted and made into coins over spot price. I also think they are hard to sell at the price you bought them at, which makes them not so good an investment. I think most people buy a few with the expectation to hoard them for a long time.

colsten

I have a Krugerrand that I was given as a present in 1981. Before it gets lost behind the sofa, I'd like to sell it. Any suggestions for the best place to sell it to?

ViolaLass

OP, you've given no indication of what you would view as a 'good' return, but on £5k, you could get 5% with no risk at Nationwide. If it's all the savings you have, I would stick with that.

grey_gym_sock

DiggerUK wrote: »

Despite everything claimed about gold in this thread, all our saving and investment gambles over the years have been preserved in our gold holdings.
The stubborn fact still remains the sub £650 per ounce average that it cost us, that is despite the massive fall in price since September 2011.

so with gold at £700-odd per ounce now, you are up a total of 10% or so, after how long holding gold? clearly more than 5 years, perhaps a lot longer. so you are at best about keeping up with inflation, perhaps less.

isn't about keeping up with inflation a good result? yes, if you did it with no risk - which is what somebody who'd bought national savings' index-linked savings certificates (which are unfortunately no longer on sale) a few years ago could claim.

you've actually done it (if you have even kept up with inflation) after buying something massively volatile, which could easily halve or worse from its current price. if you'd bought shares instead of gold, they might now be worth about twice what you'd paid for them. shares are nearly as volatile as gold, but if you hang on to them, you eventually get some reward for that volatility. with gold, you have a very bumpy ride, and then on average end up back where you started, allowing for inflation. you'd have done better to go for the index-linked saving certificates, which would have kept up with inflation with a perfectly smooth ride.

Until we see prices fall, and stay under our £650 cost average, it is Digger Mansions that is shown to provide sound long term financial acumen.

the gold price remains high. look at the long-term price graphs which allow for inflation, e.g the 2 graphs in this article: http://www.rickferri.com/blog/investments/gold-bugs-swatted-again/ - gold has fallen only slightly since those graphs, so it remain historically high.

"and stay under", you say ... i.e. when it falls below your cost price (and if you allowed for inflation, it might already be below), you'll just claim it's OK because it will rise again. well it may; and then fall again; and so on. but you don't have a exit strategy. you're just going to hold it for ever, apparently. i do hope that you own digger "mansions" without a mortgage and have enough pensions to live off, so that your gold is essentially play money whose value won't affect your life.

ValiantSaint wrote: »

Well, as you can see, I'm not the most clued up about investing, and to be fair, it's all a bit confusing. I've not a clue where to start

1 simple approach to investing is to buy an all-in-1 fund such as 1 of the vanguard lifestrategy funds: see http://monevator.com/vanguard-lifestrategy/ or http://monevator.com/using-vanguard-lifestrategy-funds-life/ (and the monevator site is generally worth reading) - that gives you ownership of a tiny bit of thousands of different companies from all around the world, which means you're not at risk of losing everything you put in, as others have said.

the main thing is to be prepared for the value of the investment to go up and down - i.e it could be down 25% in 1 year, up 30% in another year, etc - and nobody really knows what the next year will bring (though many claim to know). this means that, if you'll want your money back after only 1 year, investing doesn't make much sense, because you could easily have lost money - in that case, it's better to stick to savings/current accounts. but if you're prepared to stick with it for at least 5 years, or preferably 10 years, then you're very likely (though not guaranteed) to get out substantially more than you put in.

bowlhead99

DiggerUK wrote: »

Long winded posts don't change the facts

Despite everything claimed about gold in this thread, all our saving and investment gambles over the years have been preserved in our gold holdings.
The stubborn fact still remains the sub £650 per ounce average that it cost us, that is despite the massive fall in price since September 2011.
Until we see prices fall, and stay under our £650 cost average, it is Digger Mansions that is shown to provide sound long term financial acumen.

Gold, not greed, is good .
..._

I agree long winded posts can't change facts. What they can do is perhaps shed extra light on short posts.

For example, if someone had bought a load of gold in the good old days when it was available at normal prices (the price had always been lower than £650 up until 2009), they might very well be sitting on reasonable gains even if they did later make some purchases at crazy prices over £1000 which dragged their average up.

If those people state that selling out of all their other investments and putting it into gold has served them well, that they are sitting on decent profits and declare that they have sound long term financial acumen: then new investors who don't understand much about the fundamentals of the gold market or about the full range of other useful investment opportunities out there, might blindly follow them in buying gold over other investments for their own long term planning, and destroy their own potential wealth.

Someone else might declare that they bought their own house or a fleet of BTL properties a couple of decades ago with all the proceeds of their savings and investment gambles, and it served them well as the houses went from £40k to £300k, or £250k to £1m+, and until the houses go back to £30k it has demonstrated their sound financial acumen.

The fact is that as houses can no longer be bought for 2-3x average salaries, a boast that you bought some at low prices and would still be in profit if the price fell a bit, and therefore putting all your money into houses at the right time was a great thing to do with hindsight, is not particularly useful as advice for a new investor who doesn't have the opportunity to go back in time a couple of decades ago and buy before the price went silly.

So IMHO while "long winded posts don't change the facts", a short post about a "fact" that you bought something for a low price and now it is at a high price, is not going to be very useful for the OP who is wondering what are the current worthy places to stick his money. There are all sorts of things the OP could do with his money but listening to someone who loves gold and wants everyone to buy more of it so the price will rise, is maybe not the top priority to go and do.

redux

If both Gordon Brown and George Osborne can be criticised about their trading in gold, one selling low and the other buying high, it is not straightforward.

colsten

redux wrote: »

If both Gordon Brown and George Osborne can be criticised about their trading in gold, one selling low and the other buying high, it is not straightforward.

Links for Osborne buying gold?