Gold SIPP

kempiejon

I have been dripping money into a gold ETF (in my SIPP) since early 2020. My gold holding is now up about 30%. For most of the first year prices declined, for the next couple of years it did wobbled about most of that growth has come in the last 6 months. I have not added in this recent run nor have I thought about reducing my stake. 
Over 20 years gold has been ahead of the S&P 500 and UK FTSE100, Over 50 years gold has lagged the US equity market. One can play with a graphs here. 
https://curvo.eu/backtest/en/compare-indexes/ftse-100-vs-gold-bullion-vs-sp-500?currency=gbp
https://www.longtermtrends.net/stocks-vs-gold-comparison/

I see no reason not to have money in gold, I think it has a place, in some peoples assets, like cash or property, stocks, bonds and gilts.

OldScientist

kempiejon said:

I have been dripping money into a gold ETF (in my SIPP) since early 2020. My gold holding is now up about 30%. For most of the first year prices declined, for the next couple of years it did wobbled about most of that growth has come in the last 6 months. I have not added in this recent run nor have I thought about reducing my stake. 
Over 20 years gold has been ahead of the S&P 500 and UK FTSE100, Over 50 years gold has lagged the US equity market. One can play with a graphs here. 
https://curvo.eu/backtest/en/compare-indexes/ftse-100-vs-gold-bullion-vs-sp-500?currency=gbp
https://www.longtermtrends.net/stocks-vs-gold-comparison/

I see no reason not to have money in gold, I think it has a place, in some peoples assets, like cash or property, stocks, bonds and gilts.

Care with the longtermtrends data you've linked must be taken to scroll down to the total return indices (i.e., where reinvested dividends are included) rather than using the price return data towards the top of the page. Doing that indicates that over the last 20 years the SP500 total return index has returned 690% (price return is 423%) and gold 540%.

Going to 30 years instead of 20, the picture is a bit different because gold returned 500% (i.e. less than over 20 years) and the SP500 total return was just under 1800%. Gold had a poor decade in the 1990s and US equities a good one.

However, it is not all about returns. Again the longtermtrends site you've linked to is useful - scrolling down to the correlation graph illustrates the diversification benefits (i.e., negative correlation) that gold sometimes provides.

I have a small (about 5%) part of my portfolio in a gold ETC where it does little harm and a marginal amount of good (e.g., during the pandemic). However, one must be prepared to hold (and rebalance) during what might be decades of underperformance.

While there are portfolios that advocate quite large gold holdings (e.g., see https://portfoliocharts.com/portfolios/golden-butterfly-portfolio/ for a US example, although the results can be configured for holding in the UK, but note that backtesting is only done since 1970) one must understand and be committed to them.