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Gold - Get Physical

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I'm helping a friend with her retirement planning/investing. Today she asked me about investing in/buying gold. What are the pros/cons and differences in buying physical gold vs a gold ETF? And if she wanted to buy physical gold, where is a legitimate place to buy it?

Personally I don't invest in gold but she likes the safety and security of gold. I'm not going to steer her away from gold, but I'll suggest it be a smaller part of her portfolio, perhaps replacing bonds. For example instead of 80% equities and 20% bonds, she could do 80% equities, 10% bonds and 10% gold.
 
The biggest problem with gold is that it will only really hold its value over time with inflation, its doesn’t generate additional investment returns.

so if your friend plans to live say 30 years in retirement, but only has $300K gold will protect that $300k from inflation but it won’t grow it, so she will only have about $10k of spending power per year.

however if she puts it in some real investments, the capital might fluctuate with the stock market or property market, but over time she will get the same inflation protection, but also get an investment income/earnings that she can life off.

—————-

If she has all the money she will every need, gold is ok, but if she needs it to actually grow, put it in a range of assets in a tax advantage structure like super.
 

Firstly, good call.

Secondly, I was shocked to discover today that Australia's gold reserves are stored in the UK at the Bank of England.


About Our Gold Holdings | Questions & Answers

Frequently asked questions about the RBA Website
www.rba.gov.au

I beg your pardon? Why do the Poms have their grubby fingers on our gold? If the SHTF how are we going to get our gold back to Australia? Book it economy seats on a Qantas flight? This is a damned outrage. I can just imagine those Poms fondling our gold ingots while the wankers at the RBA are playing heads and tails with a few 1oz coins. I expect that is probably the "very small amount" of which they speak.

@Garpal Gumnut, do you have any contacts that can do something about this? We are one bad geopolitical move away from a global catastrophe and our gold is being admired and caressed by some rotten tooth toffs at the BoE on the other side of the world. Given what is going on in the world right now with war and civil unrest in a number of hot spots I think we need to get our gold back home.
 

I seem to recall that we sent an audit team over there a few years ago to put our fingers on the nuggets and there was a discrepancy. I'm sure if I bothered to Google it I would have a definitive response to that assertion. But I thought I'd write an extra two sentences here instead. I'm not sure why the Perth Mint couldn't be expanded to be our Fort Knox. Or, use my second car space which only has bikes in it at the moment.
 

Aussie fingers should be on our nuggets, not British ones. And yes, there's no reason why we can't have our own special purpose vault. I bet the BoE are charging a pretty penny to watch it for us. We're big boys now, we can take care of our own gold.

But the real issue for me, as I articulated above, is that if the SHTF how do we bring 80 tonnes of gold back to Australia in a hurry? London is a primary nuclear target. If Putin nukes London, our gold is FUBAR. I just think it's a bad move to have it located over there. There's a saying in the precious metals game, "if you don't hold it, you don't own it". In my view, if Australia's gold is located in a vault in London surrounded by sticky fingerered Poms, 17,000 kms away from Canberra , then we don't really own it.
 
Maybe we could store it next door to our strategic oil reserves?.
Oh wait, that's no good either, cause that's in the US of A where it's going to be really helpful for who when we need it in a hurry
 
Well we are just a self governing dominion of the British empire… oops I mean commonwealth.

Go join the Army and see who you pledge allegiance too, I will give you a hint, it’s not the people of Australia.

in 1999 we voted to rejected Moves to become more independent.
 
At around $80 million a Tonne, our gold reserves would be worth around $6.4 billion.
The UK is the second largest holder of Oz agricultural land.
It also holds other investments in water rights (around 8% equal with China ), and investments in LICS, Commercial real estate, ASX listed entities and few other things.
The combined value of these would far outstrip the 6.4 billion in gold value, so we could just say thansk, keep the gold, we will strip you of all investments.
Mick
 


There is room in the cellar for Australia's Horde. South Townsville was bombed by the Japanese during WW2 so we are used to conflict.

gg
 
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