Gold (for diversification and balance)

sixpence.

Sorry about the typo. I have nothing but respect for Scotland and Nicola Sturgeon! I'm just dyslexic so sometimes that happens lol

Is there a way to passively invest in commodities / gold? I know it has to be an ETF. So far I like the look of this gold fund: 
https://www.hl.co.uk/shares/shares-search-results/i/ishares-physical-metals-physical-gold-etc

I like it because the costs are low. Basically is there a way to passively invest in gold and commodities?
My current idea is to have this as a portfolio: 85% in a VLS 60, 7.5% in gold track, 7.5% in commodities tracker. Bearing in mind, I am educating myself every week so this could change. This would guard against inflation, and every year you could rebalance the excess from the gold into the VLS  

MaxiRobriguez

sixpence. said:

dont_look_now said:

sixpence. said:

It is painfully obvious to me right now that equities are over valued

So what asset class is obviously good value now? You can't say "everything is overvalued" because this is about capital allocation, and capital has to be allocated somewhere. This is about the relative attractions of placing capital in different asset clases now. (You are free to say "cash".)

and the government is basically just trying to create a buffer (removing stamp duty and the whole eat out scheme) against the next recession. 

I would recommend ignoring people who complain that markets are distorted because the government is doing something. The government is always doing something. Investors need to live with that reality, not be preparing to say: "My investments would have done well, if it wasn't for that pesky government!"

The SNP is overvalued. That is all I'm saying. The price of shares does not accurately reflect the current economic crisis.
I think you misunderstand me... I'm not blaming the government but (am I crazy here?) it's so darn obvious that the s*** is about to hit the fan. We have to have a recession. If we don't, then economics wouldn't be working in the logical way.

The stock market isn't the economy. 

Coronavirus is killing companies that require footfall - retail, hospitality, transport - but these sectors despite employing many folk don't typically make much impact on index direction. Oh and banks. 

Look at the constituents of the S&P by market cap. Apple, Microsoft, Amazon, Facebook, Berkshire, Johnson and Johnson, Visa, Proctor and Gamble. JPM, UHG, Home Depot, Mastercard, Nvidia, Verizon, Walt Disney, Paypal, Netflix, Adobe, AT&T, Pfizer, Merck, BoA...

I'm 20 odd companies in there until I've found one that's seriously dented by Coronavirus in the S&P500. Many of the biggest stocks there are posting record profits.

The U.S markets may be frothy but they're unlikely to be decimated when everyone "realises" there is a recession.

DiggerUK

I'm of the opinion that gold is 100% passive.....how can it be anything else?
Its pretty, it's shiny, it's a lump of inert elemental metal. I'll acknowledge it would be the centre of attention at a party, just boring as hell.

The World Gold Council does a monthly update on ETF's..._
(register for free)

sixpence.

Respectfully, we'll probably have to agree to disagree on this one. If you think you're stocks are going to go up for the three years then by all means, don't hold any cash and put it all in the market today. I'll stick to my view of over valuation.

MaxiRobriguez

sixpence. said:

Respectfully, we'll probably have to agree to disagree on this one. If you think you're stocks are going to go up for the three years then by all means, don't hold any cash and put it all in the market today. I'll stick to my view of over valuation.

TINA is real.

People have a lot of spare money, bonds yields/prices are worse than stocks so for most it's a choice between stocks and gold for risk takers, and with a fed seemingly happy to prop up markets then there's no reason why both cannot go up together.

I still have a large cash allocation in my portfolio but I can see markets going either way. It wouldn't surprise me that much if they went up for the next three years.

dont_look_now

sixpence. said:

Is there a way to passively invest in commodities / gold? I know it has to be an ETF. So far I like the look of this gold fund: 
https://www.hl.co.uk/shares/shares-search-results/i/ishares-physical-metals-physical-gold-etc

I like it because the costs are low. Basically is there a way to passively invest in gold and commodities?
My current idea is to have this as a portfolio: 85% in a VLS 60, 7.5% in gold track, 7.5% in commodities tracker.

There are in a sense 2 separate dialogues going on in this thread: one in which you attempt to call which asset classes will do well in the short term (i.e. over several years) and some other posters tell you you're wrong or wrong to be so confident, and another in which you are planning to add a small percentage of gold to your portfolio for diversification. Nobody is telling you you're wrong in the latter dialogue. I don't hold any gold myself, but it isn't obivously wrong to hold a little gold (unlike holding nothing but gold).

I think the gold ETF you're looking at is the right sort of thing. I.e. it will give you a return which is the movement in the gold price, less some pretty low charges. I don't know if there are other similar ETFs which might be any cheaper/better.

Trying to tracker other commodities is a very different kettle of fish. Unless you only mean other stable, precious metals (viz. silver, platinum, pallidium), for which I think you can find similar ETFs. But any commodities beyond those can't be tracked in the same way, i.e. you can't buy an ETF which just buys and holds some of the physical commodity and deducts a small fee. Instead, you can find some ETFs which do some bizarre things with derivatives, allegedly related to commodity prices, but which doesn't actually track commodity prices at all. So personally, I would steer well clear of all that. (And that's without considering that speculation with commodity derivatives causes extreme instability and spikes in the prices of the underlying commodities, which in the case of agricultural commodities can threaten farmers' livelihoods and lead to hunger for many.)

sixpence.

I totally agree re the two conversations. Here is a really useful video I just found where this solid guy basically converts Ray Dalio's portfolio to the UK: https://www.youtube.com/watch?v=5T-rc90MGBE

The catch is he concludes that maybe Dalio's approach isn't best suited for UK investors. This comes back to my 85% VLS 60 and 15% gold theory.

He names this general commodity tracker: https://etf.invesco.com/gb/private/en/product/invesco-bloomberg-commodity-ucits-etf/trading-information amongst a few others. HOWEVER: I don't personally really understand other coms such as agriculture and oil so I am questioning if they really belong in any kind of passive portfolio strategy. Maybe best to stick to 85% in VLS60 and 15% in a gold etf tracker. This does seem the right equity, bond, gold, combination.

aekostas

This is only the second thread in which I am participating; very interesting.

Did the OP make any progress with this? I too was thinking about gold in a SIPP, also for diversification, only I was thinking physical gold (as opposed to ETF) on the argument that the ETF is also a financial product. I did some research, saw that bullion companies offer SIPP-suitable accounts and failed to find any SIPP-vehicle that would accommodate physical gold with reasonable fees and charges for a small-timer like me. I then found this thread and here I am, stirring up (relatively) old memories.

EdGasketTheSecond

If you are in a UK SIPP then I think you are looking at ETFs only for gold. SGLN, PHGP, and GBSS. They are sound enough for the next few years at least imho.

Another_Saver

Here we go again.

Gold is not an investment in the sense that cash, equity, property and bonds have a knowable return you can estimate based on the yield. Yes it is a passive inert metal, but buying it, when to buy and sell to crystallise a loss (or profit if you're lucky) is all active.

It has a terrible performance record Vs all other assets.

It's a pure speculative bubble.

The idea that it is a diversifier, negatively correlated with "conventional" investing, is entirely baseless.

The value will crash to negligible when Elon starts mining it from space.

Ray Dalio is a hedge funder.

MaxiRobriguez said:

sixpence. said:

dont_look_now said:

sixpence. said:

It is painfully obvious to me right now that equities are over valued

So what asset class is obviously good value now? You can't say "everything is overvalued" because this is about capital allocation, and capital has to be allocated somewhere. This is about the relative attractions of placing capital in different asset clases now. (You are free to say "cash".)

and the government is basically just trying to create a buffer (removing stamp duty and the whole eat out scheme) against the next recession. 

I would recommend ignoring people who complain that markets are distorted because the government is doing something. The government is always doing something. Investors need to live with that reality, not be preparing to say: "My investments would have done well, if it wasn't for that pesky government!"

The SNP is overvalued. That is all I'm saying. The price of shares does not accurately reflect the current economic crisis.
I think you misunderstand me... I'm not blaming the government but (am I crazy here?) it's so darn obvious that the s*** is about to hit the fan. We have to have a recession. If we don't, then economics wouldn't be working in the logical way.

The stock market isn't the economy. 

Coronavirus is killing companies that require footfall - retail, hospitality, transport - but these sectors despite employing many folk don't typically make much impact on index direction. Oh and banks. 

Look at the constituents of the S&P by market cap. Apple, Microsoft, Amazon, Facebook, Berkshire, Johnson and Johnson, Visa, Proctor and Gamble. JPM, UHG, Home Depot, Mastercard, Nvidia, Verizon, Walt Disney, Paypal, Netflix, Adobe, AT&T, Pfizer, Merck, BoA...

I'm 20 odd companies in there until I've found one that's seriously dented by Coronavirus in the S&P500. Many of the biggest stocks there are posting record profits.

The U.S markets may be frothy but they're unlikely to be decimated when everyone "realises" there is a recession.

The stock market is the economy over the long term, all that's happened is from a very high valuation at the start of the year, stimulus checks and not being able to spend as much, combined the the general Boomer pre-retirement savings as QE, have inflated the US capital supply beyond sense.
The S&P is upto 40% "tech", most of which is really just consumer media. Valuations are firmly in dot-com levels, as is the Value stretch (the PB of a growth index / PB of a value index - and before you say growth stocks have less assets than value stocks, and value stocks assets are "dead, dying and useless" this his always been said).