Buying gold

Prism

EdGasketTheSecond said:

Prism said:

EdGasketTheSecond said:

e) Not true.

"Although the price of gold can be volatile in the short term, it has always maintained its value over the long term."

From:

https://www.investopedia.com/articles/basics/08/reasons-to-own-gold.asp

and

"Using the set gold price of $35 and the price of $1,586.40 per ounce on Feb. 14, 2020, a price appreciation of approximately 4,433% can be deduced for gold.2 Since February 1971, the DJIA has appreciated in value by 3,221%.6"

From:

https://www.investopedia.com/ask/answers/020915/has-gold-been-good-investment-over-long-term.asp

You realise that 4,433% is in comparision a terrible return compared to DJIA which is running at 16,315% over the same time frame. You can't just quote some web links to prove your point without checking them

I suggest you check your math; I agree with the figures quoted by investopedia.

You agree because you have confirmation bias and are choosing to ignore a very obvious and in the Investopedia article completely ignored factor.

EdGasketTheSecond

Well you said I didn't check the figures, which I have checked. The capital gain on gold is around 5000% and on the Dow around 2863%. You might not like the figures and they might not agree with yours but I did check them.

If you include reinvested dividends and exclude charges then the DOW returns 13588% since Feb 1971. I don' t know where you get 16,315% from as you have given no reference and no calculation?

Prism

EdGasketTheSecond said:

Well you said I didn't check the figures, which I have checked. The capital gain on gold is around 5000% and on the Dow around 2863%. You might not like the figures and they might not agree with yours but I did check them.

I know its harder to factor in the effect of dividends but surely you can't just ignore them, especially since the DJ is typically well represented by big cap old company dividend payers. 
I use this calculator 
https://dqydj.com/dow-jones-return-calculator/
There are also ones for gold and some other markets

EdGasketTheSecond

Anyway I am not suggesting holding gold for 50 years continuously is a great strategy. All I am suggesting is that gold is not currently overpriced like stocks, bonds, and property and that it looks a good place to be invested for now until the relative values change which I foresee will be after we are through the covid and the following economic downturn.

kinger101

EdGasketTheSecond said:

Anyway I am not suggesting holding gold for 50 years continuously is a great strategy. All I am suggesting is that gold is not currently overpriced like stocks, bonds, and property and that it looks a good place to be invested for now until the relative values change which I foresee will be after we are through the covid and the following economic downturn.

Gold, stocks, bond and properties are priced at what someone is willing to pay for them.  

markj113

EdGasketTheSecond said:

Well you said I didn't check the figures, which I have checked. The capital gain on gold is around 5000% and on the Dow around 2863%. You might not like the figures and they might not agree with yours but I did check them.

If you include reinvested dividends and exclude charges then the DOW returns 13588% since Feb 1971. I don' t know where you get 16,315% from as you have given no reference and no calculation?

Also lets not forget if you are sensible and buy UK legal tender gold coins like sovereigns there is also no capital gains tax to pay on those gold profits.

port_of_spain

markj113 said:

Also lets not forget if you are sensible and buy UK legal tender gold coins like sovereigns there is also no capital gains tax to pay on those gold profits.

Let's also not forget that there is no income tax on gold in any form, because it's just a dumb lump of metal which is incapable of generating any income whatsoever

nick1234

Big fan of gold, silver and other PMs.  

I own 20% Gold/PM mining stocks (juniors and larger miners), 20% physical gold mostly britannias and sovereigns which are CGT free and 10% physical silver bars.  Silver has tons of potential but Gold is a great store of wealth and one of the best performing assets in 50yrs, better than real estate

The rest is in junk overpriced asset classes such as equities, cash, and govt bonds! 

DiggerUK

nick1234 said:

Big fan of gold, silver and other PMs.  I own 20% Gold/PM mining stocks (juniors and larger miners), 20% physical gold mostly Britannia's and Sovereigns which are CGT free and 10% physical silver bars.  Silver has tons of potential but Gold is a great store of wealth and one of the best performing assets in 50yrs, better than real estate. 

The rest is in junk overpriced asset classes such as equities, cash, and govt bonds!  and silver bars

There, that's got that corrected.
Silver is predominantly an industrial metal, yes it counts as a precious metal, but it is not a monetary metal or a store of value. I recommend you sell the silver as soon as it is right..._

bugbyte_2

I must be a simple being but to me investing just has a few rules. Work out what you want your money to do then find the asset classes that does it. For me, thats increase above inflation for approximately 9 years until retirement whilst being relatively ethical, then allow  draw down during my retirement years. Equities have traditionally done that, so to meet my ethical slant I have tracker funds for Health and Pharma, Clean Energy and Technology ('Ethical' is a construct with limitations) plus a hefty chunk in Vanguard LS 60 (which happily invests in British American Tobacco) brought along with Phama to take a defensive position last year. Interestingly the first three have massively out performed the latter in the last three months which was brought to smooth out dips - who knew? Nine years is a long time so I am not bothered about what is happening now, but because we have experienced a possible crash, Equities represent a buying opportunity, so I have increased monthly investments to take advantage of the fall and hopefully rise. To go back to the OP's original question, Gold at the moment has just increased relative to Equities, so IMHO now is not a buying opportunity. This is backed up by historical analysis which I am sure you can Google. It will swing back again, at which point there will be opportunities to buy Gold, but you need a reason to hold it.