My financial advisor has told me to buy gold

aroominyork

dunstonh said:

Type_45 said:

Financial Advisors of today have only ever known rising equity markets.  They've only ever known the kindest conditions investors have operated in. And they look to each other to confirm their biases (which is human nature).

The investing environment hasn't always been like it has been for the past 40 years. And it won't be like it is now in the future either. But as we are at the tail end of the longest bull run in history people have forgotten what has come before and what will happen in the future.

The average age of an IFA (dont know about FAs) is 57.

I'm quietly imagining the fun IFAs have when they get together for their Christmas quiz. However please inform the quizmaster that an individual cannot have an average age.

Type_45

Deleted_User said:

Alan Turing put all his savings in silver in WWII, and buried it near Bletchley Park. After the war, he couldn't find it again.

If he could mess up taking personal responsibility for the physical custody of an asset, so can you.

Others may have said the same if they had to pay tax on it. 

Cus

Frequentlyhere said:

HappyHarry said:

I would always suggest that an emergency fund is 100% cash deposit.

Any gold holding would be part of the client’s investment portfolio, and I would not count it as part of an emergency fund.

I haven’t heard of any adviser recommending part of an emergency fund being held in gold, until now.

Second to this. Holding physical gold gives you a volatile and relatively illiquid asset with also extra transaction costs. A gold ETF would be marginally better, but still as volatile. I'm really not sure why anyone would advise this.

Besides which, how big does an emergency fund need to be? 10% of an emergency fund might only be £1k-£5k. I don't  see the point of messing about with transaction costs and safes for this level of investment.

I guess it depends on how much of an emergency there is. I can imagine, in a world apocalypse, the showing of your gold ETF balance account to the roaming gangs might not cut it, but a shiny coin might.

NeedSomeHRadvice

Do any of them know what they are taking about. No one at the BoE predicted the 2008 financial crash they all claim!! These are the best minds and it is their full time job and they failed. Every quarter they do their predictions and they turn out to be wrong. These BoE and IFA are just guessing like the rest of us. They guess a little better sometimes because they have more time/it's their full time job and sometimes get lucky, but mostly they are failures and know about as much as the future as the guy at the bus stop.

If you really want to know where to put our money then look at Nancy Pelosi or the other Congress people whose wealth has skyrocketed since they went to Congress. I'm sure it's the same here, look at Tony Blair, but I don't think Rees-Mogg and Farage publish their profits and shares so we can't find out. If you want real profitable investments then follow Nancy Pelosi and the other congress members are invest like them or ask Tony Blair (if you can find him).

John464

NeedSomeHRadvice said:

Do any of them know what they are taking about. No one at the BoE predicted the 2008 financial crash they all claim!! These are the best minds and it is their full time job and they failed. Every quarter they do their predictions and they turn out to be wrong. These BoE and IFA are just guessing like the rest of us. They guess a little better sometimes because they have more time/it's their full time job and sometimes get lucky, but mostly they are failures and know about as much as the future as the guy at the bus stop.

If you really want to know where to put our money then look at Nancy Pelosi or the other Congress people whose wealth has skyrocketed since they went to Congress. I'm sure it's the same here, look at Tony Blair, but I don't think Rees-Mogg and Farage publish their profits and shares so we can't find out. If you want real profitable investments then follow Nancy Pelosi and the other congress members are invest like them or ask Tony Blair (if you can find him).

Politicians have inside knowlege of things that affect markets.
They can move markets just by making statements because of the power they hold
(like who is going to get Government contracts for useless PPE) Why else would investors court them and pay so much to hire serving politicians, (or ex politicians - even those who were totally hopeless in office who still have contacts and can call in favours)

Type_45

Cus said:

Frequentlyhere said:

HappyHarry said:

I would always suggest that an emergency fund is 100% cash deposit.

Any gold holding would be part of the client’s investment portfolio, and I would not count it as part of an emergency fund.

I haven’t heard of any adviser recommending part of an emergency fund being held in gold, until now.

Second to this. Holding physical gold gives you a volatile and relatively illiquid asset with also extra transaction costs. A gold ETF would be marginally better, but still as volatile. I'm really not sure why anyone would advise this.

Besides which, how big does an emergency fund need to be? 10% of an emergency fund might only be £1k-£5k. I don't  see the point of messing about with transaction costs and safes for this level of investment.

I guess it depends on how much of an emergency there is. I can imagine, in a world apocalypse, the showing of your gold ETF balance account to the roaming gangs might not cut it, but a shiny coin might.

I think the greater probability is not being able to get your money out of a financial institution in such a situation, rather than a theoretical roaming gang going door to door demanding treasure.

Type_45

Deleted_User said:

Type_45 said:

Deleted_User said:

Alan Turing put all his savings in silver in WWII, and buried it near Bletchley Park. After the war, he couldn't find it again.

If he could mess up taking personal responsibility for the physical custody of an asset, so can you.

Others may have said the same if they had to pay tax on it. 

A bizarre reply. Tax hardly matters when you have a 100% loss.

My post demonstrated that your claim that, when gold is found buried after hundreds of years, "it was there for them if they needed it during life" is not always true. Take the L.

It's not a bizarre reply. It's simply gone over your head.

I was positing that perhaps he didn't lose it but said it was lost in order to relieve himself of any other claims to it.

Quite what that has to do with people who bury gold for a rainy day but die without needing it (or being able to use it) I've no idea.  

Type_45

Deleted_User said:

Type_45 said:

Deleted_User said:

Type_45 said:

Deleted_User said:

Alan Turing put all his savings in silver in WWII, and buried it near Bletchley Park. After the war, he couldn't find it again.

If he could mess up taking personal responsibility for the physical custody of an asset, so can you.

Others may have said the same if they had to pay tax on it. 

A bizarre reply. Tax hardly matters when you have a 100% loss.

My post demonstrated that your claim that, when gold is found buried after hundreds of years, "it was there for them if they needed it during life" is not always true. Take the L.

It's not a bizarre reply. It's simply gone over your head.

I was positing that perhaps he didn't lose it but said it was lost in order to relieve himself of any other claims to it.

Quite what that has to do with people who bury gold for a rainy day but die without needing it (or being able to use it) I've no idea.  

OK, I misunderstood your comment.

I doubt he was lying about losing it. It doesn't really make any sense, because Capital Gains Tax was only introduced in 1965 in the UK, so I don't know what tax there was he'd want to evade.

The connection with people who bury gold is that some of them actually lost it, like Turing lost his silver, so it wasn't available for a rainy day. Either because they couldn't find it, like him. Or because it was stolen, either by somebody they trusted with the information (e.g. a spouse who wanted to leave them before divorce through the courts was available, so just took the gold and left), or somebody else who chanced on it. Or some other mishap. The idea that you can be careful about it, and then it will be safe, is an illusion.

It's about diversification.  

Don't have everything in the financial system.  Don't have everything in crypto.  Don't have everything in metals.   Don't have everything in cash stashed in barrels hidden in the desert.


If you have everything in your Halifax S&S ISA then you have a single point of failure, no matter how "diversified" you think your global tracker is.

Type_45

Deleted_User said:

Type_45 said:

Deleted_User said:

Type_45 said:

Deleted_User said:

Type_45 said:

Deleted_User said:

Alan Turing put all his savings in silver in WWII, and buried it near Bletchley Park. After the war, he couldn't find it again.

If he could mess up taking personal responsibility for the physical custody of an asset, so can you.

Others may have said the same if they had to pay tax on it. 

A bizarre reply. Tax hardly matters when you have a 100% loss.

My post demonstrated that your claim that, when gold is found buried after hundreds of years, "it was there for them if they needed it during life" is not always true. Take the L.

It's not a bizarre reply. It's simply gone over your head.

I was positing that perhaps he didn't lose it but said it was lost in order to relieve himself of any other claims to it.

Quite what that has to do with people who bury gold for a rainy day but die without needing it (or being able to use it) I've no idea.  

OK, I misunderstood your comment.

I doubt he was lying about losing it. It doesn't really make any sense, because Capital Gains Tax was only introduced in 1965 in the UK, so I don't know what tax there was he'd want to evade.

The connection with people who bury gold is that some of them actually lost it, like Turing lost his silver, so it wasn't available for a rainy day. Either because they couldn't find it, like him. Or because it was stolen, either by somebody they trusted with the information (e.g. a spouse who wanted to leave them before divorce through the courts was available, so just took the gold and left), or somebody else who chanced on it. Or some other mishap. The idea that you can be careful about it, and then it will be safe, is an illusion.

It's about diversification.  

Don't have everything in the financial system.  Don't have everything in crypto.  Don't have everything in metals.   Don't have everything in cash stashed in barrels hidden in the desert.

If you have everything in your Halifax S&S ISA then you have a single point of failure, no matter how "diversified" you think your global tracker is.

The financial system is not a single point of failure. It's a complex system, parts of which can and do fail sometimes, and all of which has some risk of unexpected service interruptions, but many parts of it are so integral to how our society operates that very large resources will be used if necessary to make sure it doesn't break permanently in unacceptable ways. Unacceptable means unacceptable to the very wealthy and powerful, or unacceptable to such a large proportion of the population that it would be likely to cause public unrest. So consider that when deciding what parts of the financial system to rely on, and to what extent.

E.g. things like P2P platforms failing, or small, obscure brokers dealing in non-standard investments, can be allowed to happen. The overall systems of share ownership - CREST, standard nominee accounts to hold shares, etc, absolutely can't be allowed to fail, because a very significant part of overall wealth is held like that.

So by all means use 2 or 3 platforms (and stick to platforms that are reasonably big, and don't do too many non-standard things) to hold investments, but don't worry about all platforms being part of the same financial system.

Similarly, I keep enough cash at home that I could pay for my shopping and so on for a little while if card payments and ATM withdrawals weren't functional - but it really doesn't have to be for very long, because those things would have to be fixed very quickly if they weren't working, or there could be public unrest.

In short, it can be perfectly sensible to have the overwhelming majority of your assets, other than your home if you own that, in the financial system, so long as you are a bit judicious about what parts of it you use and how.

The alternatives to the financial system you mention are all very marginal things which generally you are better off holding very little in. They're also 3 different asset types (crypto, metals, cash) but all with the same method of custody: try to look after it yourself. So it's one alternative to the financial system, not many. And that one is much less safe than the financial system, which was my point.

You're making many assumptions. Chief among them: "the financial system won't be allowed to collapse because...  civil unrest".  You are assuming that the government/financial authorities will even have the ability to fix what breaks.  What if they can't?

What if this is actually the end of these currencies and this financial system...  and the "very wealthy" people you are hiding behind to protect the financial system because they also have assets within it then turn out to have taken their money out long ago because they knew it was coming to an end but they couldn't tell you because they didn't want a collapse until they were out...

bostonerimus

Yawn! This thread gets sillier by the post.