Help to invest in gold?

raffs

Hi all. I have recently been retired and have my lump sum to invest. I am a cautious person about money as I do not understand finances. I have in the past tried to buy shares but although my family all managed to make money, the first time I tried it I lost my investment - it was only £250 but it was all the spare money I had at the time. Naturally I am very reluctant to get burned there again.

I have around £30,000 to invest and cannot fathom a reasonable way other than in Gold. I know the price fluctuates but as I plan to hold on to it for a while any short term wobbles wont frighten me and I am pretty certain gold wont go out of style any time soon.

So what I am asking you smart people is:

What is the most economical and safe way to invest in Gold?


Thanks for all help as I really know nothing about money other than that is what my wife and kids love!

John_G_Jones

That’s one of the most stupid plans I’ve ever heard, and suggests that you should ask a competent adult to take over your affairs for you, but if you want to go ahead with the plan that is as idiotic as yours then you can walk into the bullion dealers in Savoy Place and walk out with around a kilogram in exchange for your money.

Your argument, insomuch as it can be called one, is like someone saying that they are going tomholiday in the Lake District rather than Las Vegas as they don’t like rain and the last time they went to Vegas it was a bit showery.

Apologies for dancing around the subject, ai’d tell you what I really feel but need to avoid giving investment advice for professional reasons.

user1168934

I have briefly used BullionVault in the past, some of my friends have used it too. I think they are a reputable company but whether they are economical or not I cannot say because if memory serves they charge you a percentage to maintain your gold, so if the price is dropping and you keep it you are kind of paying from your pocket. But I still think (at least at the time) their's was the best account I could find.


Personally, I would avoid gold. At the very least I would not put all the money in any one commodity. Have you looked at index trackers or other investment funds? I think you might even be able to find one that invests in gold and other commodities. Please don't put all your eggs in one basket. It is a recipe for disaster. Diversify!

short_butt_sweet

raffs wrote: »

Hi all. I have recently been retired and have my lump sum to invest.

the first question is: is it really to invest? ... by which i mean: what are your aims for this sum? e.g. boost your income from your pension(s), over the rest of your lives? or spend it on one-off things (e.g. fancy holidays) over the next few years? or put it aside with no defined purpose, but with the hope that, if you want to use it some time in the future, its value has at least kept up with inflation?

if you want a little extra income on top of your pension, then arguably the most risk-averse approach is to use the lump sum to buy a purchased life annuity; because that guarantees you an income for the rest of your life/lives. it is also possible to use investments to produce a little extra income; but in that case the level of income is not guaranteed.

if you want to spend it relatively soon, stick to cash savings accounts. e.g. if you planned to spend it steadily over the next 5 years, you might keep 1/5 of the lump sum in an instant access account, and put another 1/5 into a 1-year fixed-rate account, another 1/5 into a 2-year account, and so on up to a 4-year account.

if you want to put the lump sum aside, for no specific purpose, then you might consider investments. or only invest part of it, and keep part in cash.

I am a cautious person about money as I do not understand finances. I have in the past tried to buy shares but although my family all managed to make money, the first time I tried it I lost my investment - it was only £250 but it was all the spare money I had at the time. Naturally I am very reluctant to get burned there again.

to be blunt, you went about investing in the wrong way. you shouldn't be buying individual shares (which means you can lose everything you put in). instead, you should (if you really do want to invest) buy a multi-asset fund; which spreads you money across thousands of companies' shares worldwide (and also puts some of it in government and corporate bonds).

some examples of multi-asset funds: vanguard life strategy; legal & general multi-index; HSBC global strategy; blackrock consensus.

incidentally, your family members may have known more about how to invest, or they may have got lucky. also, they may have had a mixture of good and bad results, and have a more vivid memory of the good ones - a lot of investors do that.

I have around £30,000 to invest and cannot fathom a reasonable way other than in Gold. I know the price fluctuates but as I plan to hold on to it for a while any short term wobbles wont frighten me and I am pretty certain gold wont go out of style any time soon.

bad idea. i suggest you either invest using a multi-asset fund, or don't invest. it is also possible to pay an IFA to recommend suitable investments for you, but that likely to be uneconomic with only £30k available to invest.

Zanderman

raffs wrote: »

I have around £30,000 to invest and cannot fathom a reasonable way other than in Gold. I know the price fluctuates but as I plan to hold on to it for a while any short term wobbles wont frighten me and I am pretty certain gold wont go out of style any time soon.[/B]

Thanks for all help as I really know nothing about money other than that is what my wife and kids love!

As others have already said, gold is a very simplistic way at looking at investing. You acknowledge the price can fluctuate - but seem to think you can 'hold on to it for any short term wobbles'. Why would they be short-term? They might be long-term.

Gold doesn't, necessarily, keep going up in value, it can lose value. And losing value is what you seem to be scared of.

Investing in funds (or even directly in shares, though that's more risky) is exactly the same. There will be short-term wobbles. There might even be long-term wobbles. But funds, generally, rise in value over 5 to 10 year timetables. So no different, in wobble-terms, to gold.

If you really want to 'invest' your 30K then diversify. Don't put it all in gold. Spread it around various funds, and maybe, if you really like gold, some gold too.

But if you're really as risk-averse as you seem to suggest don't invest it, save it. There are plenty of simple ways to get about 2% on it in fixed rate bank accounts, where the capital will be completely safe - no wobbles whatsoever.

With effort you could get more than 2% - 5% even on some - using bank accounts. but as you've stated you don't really understand finances I doubt you'd want to get into that as it means opening multiple accounts and moving money around.

Saving in bank accounts is your only risk-free way.
Gold is taking risks that you probably don't understand and certainly can't predict.
Conventional investments are also taking risks but are probably better than gold.

A_T

A post like this suggests no attempt has been made to do any research on the subject and just want to be told what to do without any desire to understand or to learn.

eskbanker

A_T wrote: »

A post like this suggests no attempt has been made to do any research on the subject and just want to be told what to do without any desire to understand or to learn.

I think it's one step beyond even that - if OP had said (as many others have) "I have £30K, what's the best thing to do with it?" without really being interested in the options/rationale/pros and cons, that would have been haphazard enough, but "What is the most economical and safe way to invest in Gold?" is an even less enlightened view!

webjaved

With the amount of money you want to invest, I would look at spreading that money across different funds. I think before you think about investing, you need to read up on some blog articles etc. Have a look at Monevator.

Once you have a basic understanding of investing and managing money then you need to dive in a little deeper.

Aretnap

The safest and most economical way to invest in gold is not to do it. Why would you want an asset which has a short term volatility close to that of shares but a long term return close to that of cash?

user1168934

So if the general concesus here is that gold is not a good investment then who invests in gold? why is the price going up pretty much constantly?
... just wondering.

Shashy

user1168934 wrote: »

So if the general concesus here is that gold is not a good investment then who invests in gold? why is the price going up pretty much constantly?
... just wondering.

It isn't.

It's currently about a grand per ounce - more-or-less where it was 3 years ago.

I personally subscribe to the view that buying gold isn't an investment since it's not a value-producing asset - it's just shiny metal.