Gold in your Investment Portfolio

[josjes]

3. Because gold doesn't pay me dividends and over the years it has really been a really poor investment. I can go to Thailand tomorrow and buy 24 carat in any gold shop very cheap, much cheaper than Australia. If I really want gold I will buy in in Asia not here and at much better prices. I could be wrong but gold does nothing for me or my finances, I will stick with my industrial shares, cheers.

Bill, I think you are referring to Gold as jewellery here. Jewellery in Asia is much cheaper than in Australia (often by 200%), cause the cost of producing, designing is lower due to cheaper labour. Treat Jewelery as an enjoyment to wear and fashion. 99.99 Gold bullion price is however the same everywhere in the world, acording to the country currency conversion to the US$.
How can it be said that gold does nothing to your finance, where if you bought them 3 years, 5 years or 10 years ago and sell it now you will be sitting in 180%, 200% profit in monetary value ?

 

[jman2007]

To my great regret gold has only come to my attention when it reached US$750 last October. Since then I have jumped on the boat and started gradually building up position in gold, until now I have 10% of my investment portfolio allocated into Gold (physical/unallocated Perth Mint certificate). And I plan to add more.

I am interested to know whether :

1. other people in this forum have gold in their investment portfolio and
2. if yes what percentage ? Whether you plan to increase your gold holding ?
3. if no, why you are not interested in gold ?

1.) Yes
2.) 35-40% of my portfolio, potentially could increase to 50%

Also depends what style of company/opportunity you're after. You can substansially reduce your risk profile by picking companies already in production (normally factored into the sp - but research still paramount eg VRE), or are mining a deposit that has been mined before thereby reducing the geological risk factor, or look for up-and-coming emerging producers.

There are SO MANY factors to take into account here. Like any commodity, the quality of the resource, the management team and access to key infrastructure are key. Look for low MC/oz ratios.

jman

 

[refined silver]

To my great regret gold has only come to my attention when it reached US$750 last October. Since then I have jumped on the boat and started gradually building up position in gold, until now I have 10% of my investment portfolio allocated into Gold (physical/unallocated Perth Mint certificate). And I plan to add more.

Careful with the unallocated stuff. Its probably not there. I'm not going to get in a fight about it, or argue with anybody who disagrees, I'll just say it once for those who are interested and want to do their own research on it. But, I think there will come a time in the near future when many holders of paper gold/silver will find, the companies who sold the certificates, actually didn't have all the metal for the certificates they had sold, and so were effectively short the metal. If the metal takes off and anyone wants to redeem the certificate, the issuing company then has to either supply the metal or pay out on the certificate, and some will be unable to do so, and will default. Like I said, I'm not interested in argument, this is only for those who can hear, but many paper certificates in precious metals will default.

I am interested to know whether :

1. other people in this forum have gold in their investment portfolio and
2. if yes what percentage ? Whether you plan to increase your gold holding ?
3. if no, why you are not interested in gold ?

1. Yes
2. 70%+ in Au/Ag - most in junior shares
3. Unfortunately most without gold don't understand the times we are in now.

Gold VS All Ord
Mar 98-Mar08, 220% vs 202%
Mar 00-Mar08, 220% vs 177%
Mar 03-Mar08, 182% vs 193%
Mar 05-Mar08, 182% vs 136%
Mar 07-Mar08, 123% vs -7%

Exactly. Gold from 1968-1980 was one of the best places to be.
From 1980-2000 - a terrible place
From 2000 - 2012/16/20? - one of the best places to be.

 

[explod]

Explod,

Whilst I have never studied Gann myself. Wasn't he more of a salesman than a successful trader? As stated by his son himself, who said his dad left them a mere 100,000k as opposed to millions. He said his Dad was more of a marketing guru than a trader...........

Perhaps even though so, his principles may have been correct, but are there many current, professionals using Ganns techniques? (disclaimer: I have no idea on the Gann techniques, can only state what I have read).

Gann's success or not is irrelevant. He spent his life going through library records back more than 100 years to collate factual cycles for commodities. His books are a solid starting point for serious investors as are many others who I have studies over the years. Buffet is my greatest for UNDERSTANDING, but my post was about cycles, so I mentioned Gann.

A solid 8% return at this time of rampant inflation is a poor investment and I would be having sleep problems if I was geared that way. My wife tells me that some food items have gone up more than 50% in the last 12 months, I know fuel is certainly close to that. My bullion has gone up more than 30% per year since 2005.

When I see that the bullion trend has come to an end I will sell and put my money into the next cyclical matter on the rise. I suspect it will be a few years off and I suspect it will property on the way back up. In the meantime I will continue to study and watch the business cycles.

Oh, and though gold may be useless, people are gready and chase riches, as other investments begin to fail due to the financial crisis a gold rush will get going, just because it has been going up for the last 7 years.

Its all sentiment from that point of view. So we could calve it into three parts, we have (a) needs, (b) sentiment and (c) greed

 

[Bill M]

How can it be said that gold does nothing to your finance, where if you bought them 3 years, 5 years or 10 years ago and sell it now you will be sitting in 180%, 200% profit in monetary value ?

I've been in the market since 1987 so to round it off to a nice 20 year time lets take a look at the deal.

In January 1988 the XAO closed at 1,257, gold was at $436.

20 years later even with all the doom and gloom around the XAO is at 5505. That is an increase of 330%. Gold went up only 110% in the same period.

You put on your 6% fully franked dividends over 20 years as well and you can see that the XAO over the long term clearly beats gold as an investment.

Gold did nothing from 1988 to 2003 in fact the cumulative average price was down to $363 in 2003, a loss of -17% over a 15 year period.

Now if you bought gold in 2003 you would be doing well now, up 154%, well done to all those who did.

For a long term investor such as myself I just prefer my industrial stocks that pay good dividends. I can not predict where the price of gold will go in the future. It's a case of different strokes for different folks and historical poor performance over the long term is the reason I don't invest in it.

 

[projack]

I very relay post seriously. Actually I think this my first to do so.

I invest in gold and silver, since I lost a fortune on HIH.
I have started increasing my investment from 2003 when I recognised the bull market in gold technically on the charts, and fundamentally with problems in the US financial systems.
I think it is stupid to say what was the price of the gold in any given year and compare it with the XAO. You just don’t invest in gold that way. You must have you own good reasons to do so, and I f you don’t see any changes, just forget about the fluctuations.
Once I traded with XAO futures spending all my days front of the screen, but I was not very successful. One day my broker told me that his most successful (futures) traders don’t even have computer. I could not understand that at the time, but I do it now.

 

[Tysonboss1]

For a long term investor such as myself I just prefer my industrial stocks that pay good dividends. I can not predict where the price of gold will go in the future. It's a case of different strokes for different folks and historical poor performance over the long term is the reason I don't invest in it.

Amen...

 

[projack]

For a long term investor such as myself I just prefer my industrial stocks that pay good dividends. I can not predict where the price of gold will go in the future. It's a case of different strokes for different folks and historical poor performance over the long term is the reason I don't invest in it.

Actually Industrial didn’t do as well than resources, but if you played safe you probably picked the sector leaders 5-10 years ago.
Let see how they preformed in the last 5 years.
(left QAN out because of the oil price Amen...)

 

[projack]

Sorry TSL and TAH charts were one year only. Here is the correction.
(Makes not much different He..)
Lucky you the dividend just about compensate for inflation.

 

[projack]

OK. I had enough with those wonderful Industrials.
Lets analyse something very ugly don’t know where its heading stuff.
But I must warn you first;
For a long term investor such as myself I just prefer my gold stocks (these days) even though they don’t pay good dividends. I can not predict where the price of the above industrial stocks will go in the future. It's a case of different strokes for different folks and historical poor performance over the long term is the reason I don't invest in them.
;

 

[Spaghetti]

I have some holdings in gold stocks but little as I have mainly cash atm. Do watch closely for a big move though.

The value of gold (if realised) will be as a store of wealth. So I would not compare to other non-precious metals or other sectors in the stock market.

I look at the historical performance of gold and suggest it has not done so well because paper currency was well liked and used so no incentive to transfer to gold. However now we see currencies around the world subject to inflation, credit crisis and tigher supply we may see more and more only wanting to take temporary positions in paper but storing wealth in gold.

So I compare to paper (afterall what is the paper worth of our currencies?) and obviously gold holds more value than paper plus it has limitations, you cannot simply print it. If you put your cash in the bank for 5% interest only to see it's value decline by 8% then why wouldn't anyone look at alternative?

The trouble is though that for gold to go sky high we need lots of bad news.

But if you see nothing but bad news in the future economies then gold will outperform at some stage.

 

[projack]

Politicians don’t like gold, because gold has this keep the bastard honest affect.

We often talk about high oil prices in recent years, but who tell you that, if you kept you money in gold oil price would not changed much.

Qantas used to charge 4-5 ounces of gold for a cheap return trip to Europe; they do the same deal now for 2 ounces. That is a real bargain, but no wonder the share price is a disaster.