ISA or Gold?

Bostonerimus1

Belfastboy51 said:

So would it be better to put a lump sum in my work pension? would it gain more and be tax free? 

What type of workplace pension do you have and what are you trying to achieve?

aroominyork

Bostonerimus1 said:

aroominyork said:

EthicsGradient said:

Some people like to have, say, 75% of their investments in shares, and 25% in gold. This gives them most of the gain of the stock market, but with less of a chance of an overall sudden fall.

25% in gold? Some people, but not many. 5-10% is the range more often quoted as a likely store of value in case everything else goes wotsits up 

25% in gold is the old "Permanent Portfolio". 25% stocks, 25% bonds, 25% cash, 25% gold.

There's a portfolio for every day of the year!

Bostonerimus1

aroominyork said:

Bostonerimus1 said:

aroominyork said:

EthicsGradient said:

Some people like to have, say, 75% of their investments in shares, and 25% in gold. This gives them most of the gain of the stock market, but with less of a chance of an overall sudden fall.

25% in gold? Some people, but not many. 5-10% is the range more often quoted as a likely store of value in case everything else goes wotsits up 

25% in gold is the old "Permanent Portfolio". 25% stocks, 25% bonds, 25% cash, 25% gold.

There's a portfolio for every day of the year!

There is an uncountably infinite number of possible portfolios.

ColdIron

Bostonerimus1 said:

aroominyork said:

EthicsGradient said:

Some people like to have, say, 75% of their investments in shares, and 25% in gold. This gives them most of the gain of the stock market, but with less of a chance of an overall sudden fall.

25% in gold? Some people, but not many. 5-10% is the range more often quoted as a likely store of value in case everything else goes wotsits up 

25% in gold is the old "Permanent Portfolio". 25% stocks, 25% bonds, 25% cash, 25% gold.

Not dissimilar to Personal Assets (PNL) but with only 10% in gold rather than a bonkers 25%

EthicsGradient

ColdIron said:

Bostonerimus1 said:

aroominyork said:

EthicsGradient said:

Some people like to have, say, 75% of their investments in shares, and 25% in gold. This gives them most of the gain of the stock market, but with less of a chance of an overall sudden fall.

25% in gold? Some people, but not many. 5-10% is the range more often quoted as a likely store of value in case everything else goes wotsits up 

25% in gold is the old "Permanent Portfolio". 25% stocks, 25% bonds, 25% cash, 25% gold.

Not dissimilar to Personal Assets (PNL) but with only 10% in gold rather than a bonkers 25%

There's a site - Portfolio Visualizer - that allows you (denominating it all in dollars) to backtest various combinations of stocks, bonds, gold and a few other things (though their data going back as far as 1970 is pretty much just the S&P 500, some (US?) bond index, cash, and gold), and things you want to do with it, such as an inflation-linked withdrawal, or whether you rebalance each year. To survive the early 70s stock market drops while making what most people would say is a prudent withdrawal rate (eg the 4% often mentioned), the one thing that seemed to work was having a significant amount in gold - over 20% - along with most in stocks (bonds didn't help much). If you just have 10%, that cushions a couple of years, but a downturn that lasts 5 years or more can produce problems. When the markets start to grow, you still have most in there to take (moderate) advantage.

This is for what to do with a lump sum at the starting point, of course, and wanting to take income from it right away; if you are looking for something to invest in now and not withdraw anything for the first 10 years, and maybe add regular investments too, then just shares nearly always works out best.

ColdIron

PNL doesn't claim to produce the highest growth. As is often cited, it's objective is "to protect and increase (in that order) the value of shareholders' funds per share over the long term" much as Harry Browne's "Permanent Portfolio" of old sought to do

Each of its Four Pillars have a specific objective, e.g. the second pillar of bonds is mostly US index-linked bonds (US TIPS) and UK inflation-linked gilts

XzavierWalnut

Albermarle said:

XzavierWalnut said:

Belfastboy51 said:

So i would assume you are saying wait until the turbulent times have passed and get a better rate for the gold. Presumably coins are the best option? tax free and zero capital gains? 

Problem these days, there are always turbulent events. Personally, I bought gold bullion because I always wanted to own some, not particularly to make a lot of money.
For large purchases coins seem to be the best option to avoid CGT.

Nothing special about 'these days' . Plenty of turbulent events in the past ( WW2 etc) and will be plenty in future. Normally financial markets shrug off most of  these events quite quickly.
Even with Covid it only took about 6 months for the markets to recover.

I probably notice and worry about events more now, as I am older.
  

kempiejon

@XzavierWalnut "I probably notice and worry about events more now, as I am older."
Always worth checking your asset allocation if you start worrying when you watch the events, The more pull backs I see the better buying chances. Older and looking to deaccumulate perhaps a different mix would make you more comfortable. I usually don't care as I trust my plan but it's what let's you sleep soundly.

LHW99

Bostonerimus1 said:

Belfastboy51 said:

So would it be better to put a lump sum in my work pension? would it gain more and be tax free? 

What type of workplace pension do you have and what are you trying to achieve?

The advantages of adding more to the workplace pension are:

HMRC pays in more (you pay a net amount, and end up with the gross amount in the pension) - free money

Your employer pays in, and may pay in more if you do - free money

You are building up a fund to support you when you retire (from age 55 / 57 currently)

An ISA is tax free, but doesn't get the HMRC / employer contributions.

It is flexible, if you have a sudden emergency or want / need to retire before 55 / 57 it can be used.

DRS1

Belfastboy51 said:

So would it be better to put a lump sum in my work pension? would it gain more and be tax free? 

It is never a bad thing to put money into your pension.

If you have the same investment in an ISA or a pension it will grow the same (subject to fees which may not be the same for the ISA and the pension) because both are tax exempt.

You do need to remember that what you get out of an ISA at the end of the day does not attract any more tax but what you take out of a pension can attract tax.  Usually 25% of the pension can be paid as a tax free lump sum and the rest can be taken as taxable income - like a salary it is paid under PAYE and how much tax you pay depends on how much the payment is and what other taxable income you have.  Before you say why isn't an ISA better you need to remember that you get tax relief on your contributions to a pension but not on your contributions to an ISA.  So a pension can be better than an ISA - there is an often quoted 6.25% better but that depends on your tax rate.