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Gold: cost effective way to drip feed into a monthly gold investment

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potopoto Forumite
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Hi all, hope you're all doing well in these critical times.
I have been investing on a monthly basis about 1000£ with Charles Stanley for the last couple of years. I have now decided to add gold to my portfolio, about 15%, so I am looking at drip-feeding about 150-200£ pound worth of gold each month. I am struggling to find the best, most cost-effective way to do so. The options I have considered includes:
  1. Buy coins: they seems to be the worst due to the 7-9% spread
  2. Use services like BullionVault: here the monthly storage cost is about 3.5£ per month, so it becomes low (0.12% pa) only on  a balance of over 30K. Plus commission cost of 1-1.2%  to buy and sell
  3. ETF/ETC: here the dealing charges (11.50£ on Charles Stanley) are not ideal for a month investment of 150-200£
What would you suggest the best way of doing so? Is there any other options I am missing?
I am also looking at oeic funds with a reasonable percentage of gold is their assets (like Troy Trojan) but this would leave me without direct control over gold allocation - so not ideal in that respect. Anyway, is there any other funds worth looking into?
Many thanks in advance for your expert feedback.

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Replies

  • EdGasketTheSecondEdGasketTheSecond Forumite
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    Some other brokers have smaller dealing commissions for regular saving; have a look at Halifax or AJ Bell. Gold ETF's would be the cheapest way subject to a sensible broker charge for a small amount. BullionVault is privately owned so not FSCS protected but check reviews if you want to go down that path; the negative reviews are about various charges and difficulty getting money out if your circumstances change; like bank or address etc. You could buy a silver or gold coin when you have saved enough but charges are high and then how would you store them and eventually sell?
    Overall I concluded ETFs are the best route for small investors but do bear in mind they still rely on counterparty custodians to be honest, do their job, and remain solvent!
  • potopoto Forumite
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    It looks that the Glint app might fit the bill.It seems to have low costs, but I am not sure if that is to be "trusted" with any serious money. Any thought on this?
  • EdGasketTheSecondEdGasketTheSecond Forumite
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    'All that glints is not gold' springs to mind.
    Reviews aren't too good:
    Why not forget these type of players and go with the established, bonefide companies that I suggested where you will have fscs protection?

  • potopoto Forumite
    25 posts
    Eighth Anniversary 10 Posts Combo Breaker Name Dropper
    Thanks @EdGasketTheSecond for your feedback. To have full fscs protection I think I will have to resort using eft/etc, right?
    As I am not to keen on leaving charles stanley, I am considering to buy more and less frequent (like 800£ 3 times a year) in order to reduce the impact of the dealing costs.
  • dunstonhdunstonh Forumite
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    To have full fscs protection I think I will have to resort using eft/etc, right?

    ETFs do not get FSCS protection.


    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • potopoto Forumite
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    Thanks @dunstonh. So how can I get FSCS (or some sort of) protection when buying gold?
  • Old_LiferOld_Lifer Forumite
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    I bought half a dozen Krugerands  in 1974 when inflation was rising  rapidly , the world was in a total mess after the Oil Crisis  and everything was doom and gloom,  just  as it is today    By  the following year the main share index had fallen 70 per cent in about 18 months  and was around  80 per cent down from its all-time high.   Inflation  peaked at around 26 per cent.   I held  onto  my investments and  bought more collective investments  (unit trusts) as I thought at the time that individual company shares  would be too risky for me as I then had less investment experience  and this turned-out later to have been a good decision.  As a result of this experience  I have  continued to invest more  whenever there is a crisis with  steep falls in stock markets and everything  ahead is doom and gloom.

    I sold my  Krugerands during the gold boom of early 1980 when gold reached around 850 dollars an ounce.  Gold fell sharply not long after  and if I remember correctly   traded in the  range  490odd  dollars to circa 250 dollars  (please correct me if wrong)  during the next twenty years or so.   Of course, the dollar exchange rate is also a factor in the price when buying gold.

    Personally ,  I would only invest in physical gold if we had revolution on the streets and hyper-inflation.   Physical  gold requires secure storage and pays no dividends,   which is particularly important during long periods when the gold price is depressed and trades within a narrow range.



  • EdGasketTheSecondEdGasketTheSecond Forumite
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    No investment has FSCS protection; only the broker/platform organisation. Halifax and AJ Bell have FSCS protection so if they go bust or run off with your cash you should get it back. If Glint goes bust, it's only the receivers that you might get anything back from.
  • So, if Halifax or AJ Bell run off to the Seychelles with your cash, instead of using it to buy shares in a gold ETF as you instructed, you would have a claim against AJ Bell / Halifax, which which the FSCS would pay if AJ Bell / Halifax had collapsed and couldn't pay.
    OTOH, if the company running the ETF ran off with the ETF's cash to the Seychelles, instead of using it to buy physical gold, then you would have no FSCS protection. (You would still own shares in the ETF, but they might be worthless.)
    This is something to be aware of. And a reason to stick to ETFs run by apparently stable companies. But not a reason to avoid ETFs altogether. Certainly not for gold, where storing it yourself involves its own obvious risks. (Though arguably more reason to avoid ETFs which invest in shares, bonds, and so on, where there are FSCS-protected alternatives, viz. UK-domiciled OEICs and unit trusts.)
  • DiggerUKDiggerUK Forumite
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    Gold  is at all time highs in U.K., as ever with gold the wise thing to do is average in.

    With the amount you are looking at I suggest you buy a sovereign as and when you have the cash. They are £300+ today, that's about one every two months. There are hiccups in the supply line a.t.m. but you can buy and wait on delivery, nothing to worry about. 
    I am a long term user of this firm based in Sutton Coldfield and can vouch for their prices and reliability.   https://atkinsonsbullion.com/

    Sovereigns are classed as legal tender so do not attract any taxes when you buy or sell.
    I don't know were you get the 7-9% spread figure from, it's way too high. Coins are the cheapest way to buy gold, household insurance will cover them. We pay about £1 per £630  cover. But that only happens once you go over policy limits per item..._
    I am not now, nor have I ever been, a Financial Adviser.
    'Forward to the British Spring' 'Viva Wikileaks'
    Justice for Harry Dunn
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