Is it worth investing in gold?

Aretnap

ViolaLass wrote: »

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.

Or a Nationwide Flex Direct account and a TSB Classic Plus account - both of which pay 5% and between them would accommodate £4500 of the OP's £5K.

5% with no risk (OK, 4% after basic rate tax, but it will be tax free from next April) is actually a bloody fantastic return at a time when base rate is 0.5% and inflation is within spitting distance of zero. People who fondly remember the good old days before the financial crisis when you could get 7% on a savings account tend to forget that at the same time inflation was nudging towards 5% - so in real terms the OP can get a better rate today than he could have got in a savings account eight or nine years ago.

In fact, never mind savings accounts - the long term average return on the UK stock market is only a little over 5% above inflation, so to be able to get that sort of return from a bank at no risk is absolutely great. Shame you can only do it with relatively small amounts of money. If I could put my pension fund into a bank account which could promise to pay 5% above inflation* I'd take it all out of the stock market and put it there, and know that I could be certain of a comfortable retirement.

So it's not true that you hardly get any interest - with a little effort you can get a return that many larger scale investors would kill for.

*True, TSB and Nationwide don't promise to raise their rates when inflation eventually goes up. Still, the high rate/low inflation combination is something to enjoy while it lasts.

ValiantSaint

Thanks again. I would like to see around a 5% return on the 5k, if possible. I did a little reading about the Nationwide "Flex Account"

Access to 5% AER (4.89% gross p.a) interest on in-credit balances of up to £2,500 (fixed for the first 12 months). You must pay in £1,000 per month (excluding internal transfers) to get this rate. After 12 months the interest rate reverts to 1% gross pa./AER (variable) on balances up to £2,500.

Back to 1% after 12 months? Happy days

It's all this "Pay X to get Y" that puts me off. My and my Wife are looking to start a family, so shifting money around all the time just complicates things. It would be nice just to stick the money somewhere, let it grow, and maybe cream a bit off the top once a year

ViolaLass

ValiantSaint wrote: »

It's all this "Pay X to get Y" that puts me off. My and my Wife are looking to start a family, so shifting money around all the time just complicates things. It would be nice just to stick the money somewhere, let it grow, and maybe cream a bit off the top once a year

Get your salary paid in, problem solved.

And stop asking for the earth! You're not going to find a risk-free, hassle-free, 5%-or-better return investment.

Also, 5% of £5k is £250. I don't know what wild plans you have in mind for your 'cream' but don't get carried away.

jimjames

atush wrote: »

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?

But as Gadget said, even if the markets crash you still aren't "wiped out" if you have invested in a good mixed portfolio. With all the headlines recently about stock market crashes and billions lost, the average drop is probably only around 15-20% so I'd say that it pretty far from being wiped out even if you sold now.

redux

colsten wrote: »

Links for Osborne buying gold?

At his Budget speech in 2012 he repeated criticism of Brown for selling at a low point, and said he was taking opportunities to rebuild gold stocks.

He didn't explain why he hadn't said so earlier and instead had apparently chosen what we now know to be close to a high point.

Masomnia

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.
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 .
..._

£650, so that's what 6 or 7 years ago? And it's now £750 an ounce? I reckon you'd have done better tracking the FTSE100 and reinvesting the dividends. I'm sure someone else will do the sums for me though

DiggerUK

ValiantSaint wrote: »

...........Back to 1% after 12 months? Happy days.............It would be nice just to stick the money somewhere, let it grow, and maybe cream a bit off the top once a year

It's a twelve month solution, about as good as it gets for you.

It would be nice to find somewhere that allowed you to cream a bit off the top.......the reality is, as it is though.
There is no painless way to tell you that, the windbags around here will try and convince you that nothing has really changed in the last eight years, and it's all back to normal.

In your current position gold is of no use to you. If you want to know what price gold will be in a years time......ask me in a year. As things stand it looks like it will be in the £7 - 800 an ounce range, but don't quote me on that.

The truth is that you're keeping afloat, and that's as good as it's gonna get for now. Stay keen to find a way forward, best of fortune.
..._

colsten

redux wrote: »

At his Budget speech in 2012 he repeated criticism of Brown for selling at a low point, and said he was taking opportunities to rebuild gold stocks.

He didn't explain why he hadn't said so earlier and instead had apparently chosen what we now know to be close to a high point.

I can't see where Osborne bought any gold but I might not read the reports correctly?

EEA 2010: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/221565/eea_accounts_200910.pdf

EEA 2014: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/329828/EEA_Accounts_2013-14_-_print.pdf

DiggerUK

Masomnia wrote: »

£650, so that's what 6 or 7 years ago? And it's now £750 an ounce? I reckon you'd have done better tracking the FTSE100 and reinvesting the dividends. I'm sure someone else will do the sums for me though

Bulk was purchased between 2005 and 2010.........the point I was emphasising, is that despite the massive fall in price it has still shown to have been a sound decision. 'Returns' as measured by being ahead of inflation, are more favourable than NSI Index Linked, which is why we stopped rolling them over.

Yes, being in equities for the last five years would have done us well, we just decided that it would be wiser to walk out the casino with our winnings and put them in a safe place, and we have been proved correct to have done so.
Safe havens are, as safe havens duzz.
..._

redux

colsten wrote: »

I can't see where Osborne bought any gold but I might not read the reports correctly?

EEA 2010: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/221565/eea_accounts_200910.pdf

EEA 2014: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/329828/EEA_Accounts_2013-14_-_print.pdf

If I want to remember what I did in 2012 I don't use a 2010 or 2014 diary.

'We are also taking the opportunity to rebuild Britain's reserves, which had fallen to historically low levels.'

George Osborne, 2012 Budget speech, as reported.