Investing in Gold

grumiofoundation

tcallaghan93 said:

Gold isn't an investment it's a metal. You can buy it but don't assume it's going to generate a return.

You can't assume any investment will generate a return. 

DiggerUK

With current record highs being reset with gold it is sadly the case that the bugs and evangelicals will be out in force. It is also the case that those with opposing viewpoints will also be out in force.

As both will be telling each other it will all end in tears, I'd advise posters to just sit back, make a choice, and put the kettle on.

Digger Mansions is in the position of having a pile of gold appreciating at a steady trot, a huge bucket list; whilst planes and cruise ships are going nowhere we want them to. 

In our situation the Diggers have decided  to keep calm and carry on going nowhere..._

83705628

grumiofoundation said:

tcallaghan93 said:

Gold isn't an investment it's a metal. You can buy it but don't assume it's going to generate a return.

You can't assume any investment will generate a return. 

/
You can, by definition - cash interest, bond coupons, stock growth and dividends. Unless you think the UK is seriously about to become Japan 30 years ago, or the entire global order is going to stop, or WW3 is on the cards, then yes, you can expect a return, the same as the last 3 centuries.

RyanHello

Gold itself is different from a lot of investments. It doesn't pay a dividend or benefits from compound interest. But the one thing it has going for it is it's pretty reliable and as been the last 50 years. If you invested £10000 in gold in 2007 and left it, it would now be worth £27000. If you have a decent variety of bonds, stocks, shares, funds in your portfolio, it wouldn't hurt to add gold to that. Plus it's VAT FREE!!  

83705628

RyanHello said:

Gold itself is different from a lot of investments. It doesn't pay a dividend or benefits from compound interest. But the one thing it has going for it is it's pretty reliable and as been the last 50 years. If you invested £10000 in gold in 2007 and left it, it would now be worth £27000. If you have a decent variety of bonds, stocks, shares, funds in your portfolio, it wouldn't hurt to add gold to that. Plus it's VAT FREE!!  

/
It's not reliable, it would hurt relative to stocks at least over the long-term, and the return is unknowable.

Type_45

bowlhead99 said:

aroominyork said:

But that raises a question of whether gold should only ever be bought to "never sell... hand it down the generations", or do people sensibly hold it as a diversifier 

Although I'm sure we are all envious of those families with a swimming pool full of gold coins in which to bathe... if the intention is to hand something down the generations, a portfolio of stocks - or more usefully, shares or units in an investment fund, because individual stocks can become worthless - would fit the bill better due to better long term growth potential versus a commodity.

So as something held for the benefit of the current generation rather than future generations, its main purpose would be a diversifier.

Ideally, diversifiers should have income and/or growth potential in their own right (i.e. equity dividends and or value growth from a share in a profitable business, or an agreed rate of interest on a bond with growth potential on the side).  Gold doesn't have fundamental growth or income potential because it sits there at the same size and doesn't pay an income (instead costing money to store and insure). However like some other commodities it does have speculative value so can go up in price per ounce (and that speculation value can be sufficient to offset inflation over some periods), and it can have a negative correlation to other asset classes from time to time. The negative correlation (though unreliable) is something that can make it more useful as a diversifier than cash.

So, no harm in having a few percent of your portfolio in it as a diversifier if you are looking to reduce volatility rather than go for all out growth.

Not seen bowlhead in a long while?

MX5huggy

Banned in January 

Bobziz

Subterranean....

Type_45

MX5huggy said:

Banned in January 

Banned?! He seemed a pretty sensible, straight-laced bloke. What was he banned for?

MX5huggy

Type_45 said:

MX5huggy said:

Banned in January 

Banned?! He seemed a pretty sensible, straight-laced bloke. What was he banned for?

 No idea, just clicked on his username and thats the info.