Where Should A Very Cautious Investor Invest?

[sugarflux]

Hi

I have a STR fund which has been in plain old savings accounts since 2007. With inflation on it's way up and the rates on my savings currently anywhere between 0.01% and 5% and only very low rates available once my current higher deals finish I'm starting to get a bit worried about where to put the money...

I've always been a bit wary of buying gold or silver as whilst i can see the "safer" benefits as a "normal person" rather than a savvy investor it seems strange to me to be holding lumps of metal instead of cash!

When people talk about buying gold and silver do they actually have physical lumps sitting around their living room or have a i mis-understood here?

I spend quite a bit of time in Europe and was tempted to exchange some sterling into Euros and whilst this paid off me a couple of years ago I'm not really a currency speculator either.

I've toyed with the idea of opening a stocks/shares ISA and think this would be a good idea for a long term investment and would be happy to drip-feed into it on a monthly basis but wouldn't be happy to put lump sums of money into the stock market.

I've avoided fixed term bonds as when/if the hpc actually comes to fruition i want to be ready to buy so would not be happy to lock savings away for any fixed length of time.

I'm a very cautious investor, I suppose. I don't want or need to get rich quick but the idea of my hard-earned savings inflating away into the abyss is making me re-assess.

Has anyone got any suggestions where savings would be slightly safer for an ordinary person like me?

Thanks in advance

~S~

[General Congreve]

What should he do bumpy? I'm all ears?

[General Congreve]

To continue from a discussion with Bumpy last night (late 2am) here is our final exchange on the de/merits of gold, it covers a lot of bases and I hope it is of use to you, because it took me a long time to write and no one read it by all accounts. Bumpy seems to be here now though, so hopefully he can offer some more counterpoints to further the discussion.

Bumpy:

Like any investment a balanced portfolio is required. Gold may be OK, but it is not the panacea you try to make out by your continual ramping

1. Holding physical is exposing yourself to theft. In times of trouble you will not be able to trust ANYONE.

2. Holding physical means you cant respond to a crashing market and gold falls can be dramatictically fast.

3. Everyone is thinking gold is the answer. That is the time to get out.

4. Buying gold that is held for you is nothing more than another Ponzi scheme.

5. If you must have exposure to precious metals then mining shares are a good way to do it.

6. In times of trouble, governments have been known to confiscate physical gold.

7. The price of gold is governed by more than supply and demand. You are at the manipulative hands of other more powerful and shrewd investors.

My Response:

1. Holding physical in no way exposes someone to theft any more than having an internet banking account exposes you to internet banking fraud, cash in your wallet exposes you to mugging or owning a bunch of antiques exposes you to burglary. If we follow this line of argument to its logical conclusion, we'd all own nothing, reject all forms of wealth and live on the streets in rags. I don't deny that owning gold exposes one to the risk of theft, but no more than any other desirable physical or monetary asset and as long as due diligence is followed, it should not be a concern. I would also add that as I have not fashioned my physical gold into a hat that I parade around town in, the chances of me being mugged for my gold are pretty negligible.

2. I can get access to my physical and be at my dealer's within an hour or two, if need be. But once again, due diligence. Follow the latest news and the markets and you are less likely to be caught out. As an example, I sold my last property in August 2007 at the peak and I pulled my savings out of Icesave exactly 2 days before it collapsed. I achieved this because I followed the markets every move leading up to property's reversal and Iceland's Banking Crisis. Saying that markets can suddenly reverse is not news or an argument against gold, when taken in consideration with the prevailing global financial situation.

3. Just complete twaddle. Who's everyone? I've never heard a taxi driver, bloke down the pub, or any of my friends even mention the stuff, let alone know a thing about it. If you asked a random sample of 10 people in the street what the price of gold was I bet you'd be lucky to get 1 answer in the ballpark. Those that favour gold are in the minority on here too. Just remember how many people were blabbing about the price of their home during the housing boom and the endless MSM drivel on the TV and in the papers - that's everyone thinking something is the answer. When the cover of TIME magazine shows a golden bull spearing a dollar with its horns, that'll be the time to call the top of the market.

4. That's why you buy physical. To counter the risk of theft you place you physical in a safety deposit box at an institution where the contents of said box are considered assets of the individual, not the institution (in case of failure of said institution). Basically avoid banks.

5. Mining shares are a good addition to a physical position and may provide much higher leveraged gains, this is true. However, physical should be your core position because mining companies can fail and in the event of the crisis there is nothing to stop a government nationalising mines on its soil, meaning you'll be lucky to get back a fraction of the value of your investment, if anything. Mining shares should be used as a speculative play, but as a minority share of your overall gold position, due to the risks, but also due to the fact that the possibility of stellar returns, if everything goes well for the company in question, means a little will go a long way, i.e. many junior miners in the late 70's made returns in excess of 5000% (sometimes far in excess - Lion Mines – 1975 price: $0.07 / 1980 price: $380, i.e. an increase of 542,757%), while physical made about 2400% between 1971 and 1980.

6. When FDR confiscated the gold in the 30's in the US, only about 1% of holders were pathetic enough to hand it over and none of the 99% who didn't comply were ever fined or jailed as a result of the confiscation order. However, this is a reason that ETF's and companies like bullionvault are not recommended. Low transaction costs is great, until the government freeze your account overnight and confiscate it or impose huge amounts of CGT on sales. Then suddenly you are really f4cked. With physical there will always be a black market and it's easy to hide from the authorities. The Goverment banning drugs hasn't prevented their trade, it will be the same with gold if need be, unless you're the type to roll over and take it in the @rse like the gormless 1% in the US in the 30's.

7. As are the FX markets. Sterling, which you no doubt keep in your wallet and bank account, is traded on these markets, is it not? George Soros used the FX markets to help crash the pound in the early 90's. Feel safe?

Do you have any other 'worthwhile' counterpoints you'd like to share?

[Cicero]

Hi

I have a STR fund which has been in plain old savings accounts since 2007. With inflation on it's way up and the rates on my savings currently anywhere between 0.01% and 5% and only very low rates available once my current higher deals finish I'm starting to get a bit worried about where to put the money...

I've always been a bit wary of buying gold or silver as whilst i can see the "safer" benefits as a "normal person" rather than a savvy investor it seems strange to me to be holding lumps of metal instead of cash!

When people talk about buying gold and silver do they actually have physical lumps sitting around their living room or have a i mis-understood here?

I spend quite a bit of time in Europe and was tempted to exchange some sterling into Euros and whilst this paid off me a couple of years ago I'm not really a currency speculator either.

I've toyed with the idea of opening a stocks/shares ISA and think this would be a good idea for a long term investment and would be happy to drip-feed into it on a monthly basis but wouldn't be happy to put lump sums of money into the stock market.

I've avoided fixed term bonds as when/if the hpc actually comes to fruition i want to be ready to buy so would not be happy to lock savings away for any fixed length of time.

I'm a very cautious investor, I suppose. I don't want or need to get rich quick but the idea of my hard-earned savings inflating away into the abyss is making me re-assess.

Has anyone got any suggestions where savings would be slightly safer for an ordinary person like me?

Thanks in advance

Ultimately, all investment is speculative ('safe' return vs inflation risk, growth risk vs volatility etc).

Do your own research and make up your own mind. Never act upon advice given on an internet forum (unless you feel so confident in the advice proferred).

Edited December 23, 2010 by Cicero

[888]

Hi

I have a STR fund which has been in plain old savings accounts since 2007. With inflation on it's way up and the rates on my savings currently anywhere between 0.01% and 5% and only very low rates available once my current higher deals finish I'm starting to get a bit worried about where to put the money...

I've always been a bit wary of buying gold or silver as whilst i can see the "safer" benefits as a "normal person" rather than a savvy investor it seems strange to me to be holding lumps of metal instead of cash!

When people talk about buying gold and silver do they actually have physical lumps sitting around their living room or have a i mis-understood here?

I spend quite a bit of time in Europe and was tempted to exchange some sterling into Euros and whilst this paid off me a couple of years ago I'm not really a currency speculator either.

I've toyed with the idea of opening a stocks/shares ISA and think this would be a good idea for a long term investment and would be happy to drip-feed into it on a monthly basis but wouldn't be happy to put lump sums of money into the stock market.

I've avoided fixed term bonds as when/if the hpc actually comes to fruition i want to be ready to buy so would not be happy to lock savings away for any fixed length of time.

I'm a very cautious investor, I suppose. I don't want or need to get rich quick but the idea of my hard-earned savings inflating away into the abyss is making me re-assess.

Has anyone got any suggestions where savings would be slightly safer for an ordinary person like me?

Thanks in advance

~S~

Until the USA and UK stop printing money and allow th IR to rise there is not a lot of places to hide.

If you are near retirement age and still employed you can do the usual trick of stuffing the pension fund full, claim a max of 40% tax back and immediately draw down 25% cash so you immediately make 25% profit. I beleive you can use up last years allowance too from memory. But I'm no where near retirment yet.

Edit: sorry it's 41.6% profit because for £6K you get back £2.5K (£4K tax man contribution taking total to £10K and you draw down £2.5K immeditaely)

Edited December 23, 2010 by 888

[Cicero]

Until the USA and UK stop printing money and allow th IR to rise there is not a lot of places to hide.

If you are near retirement age and still employed you can do the usual trick of stuffing the pension fund full, claim a max of 40% tax back and immediately draw down 25% cash so you immediately make 25% profit. I beleive you can use up last years allowance too from memory. But I'm no where near retirment yet.

Correct.

[sugarflux]

Thanks GC.

It certainly is an interesting read and does make me think about some of the positives (as well as some of the negatives!)

To be perfectly honest i think it would be more of a risk having physical gold in the house - that's why my money is in a bank at the moment. It's a slight safeguard against theft (from burglars - not a safeguard against theft from the government).

With regards to running to my gold dealer - where would someone buy a lump of golf from?!?? I have no idea! A jeweller ?

It also does seem that the idea of buying gold is becoming more popular amongst people who would never have discussed the idea of savings in the past. Take all the we'll buy any gold' adverts on tv - this is pretty mainstream if you ask me. Which could, impo, potentially indicate that it is nearing the peak.

Perhaps it is something i should consider for a percentage of my savings - after all spreading the risk is supposedly the name of the game...

~S~

[sugarflux]

Ultimately, all investment is speculative ('safe' return vs inflation risk, growth risk vs volatility etc).

Do your own research and make up your own mind. Never act upon advice given on an internet forum (unless you feel so confident in the advice proferred).

Hi Cicero

I totally agree. If someone on here told me "Go and buy blue cheese" and wouldn't immediately fill my house with it. However I've no idea how the blue cheese market is so am asking for a bit of advice about what i can go and research.

My difficulty is I can't donate all of time to watching news on stocks and shares ready to buy and sell at any given minute. Therefore I accept that high risk investments aren't for me and I also accept my return will likely be slow and steady rather than doubling overnight! I'm happy for modest returns but do want to diversify a little from savings accounts alone as at the moment there are no returns - I'm losing money.

Thanks for the reply

~S~

[sugarflux]

Until the USA and UK stop printing money and allow th IR to rise there is not a lot of places to hide.

If you are near retirement age and still employed you can do the usual trick of stuffing the pension fund full, claim a max of 40% tax back and immediately draw down 25% cash so you immediately make 25% profit. I beleive you can use up last years allowance too from memory. But I'm no where near retirment yet.

I'm nowhere near retirement age either, in fact I'm still (for a very little while) the right side of 30. I am full time employed with a reasonable wage which currently allows me to save around £300 a month (I also have my own business but this doesn't generate enough money to pay a wage yet). My wife is desperate to buy a house and I'm constantly encouraging her to keep on waiting but there's no telling for how long I can keep up the fight (after assuring her back in 2007 there is going to be crash any minute)!

Stocks/Shares is probably my best way to go as i can be as cautious/adventurous as i like but I'm nervous about starting a fund with £3k and losing it due to not keeping on top of the news etc. Plus I don't really know where to start!

~S~

[888]

I'm nowhere near retirement age either, in fact I'm still (for a very little while) the right side of 30. I am full time employed with a reasonable wage which currently allows me to save around £300 a month (I also have my own business but this doesn't generate enough money to pay a wage yet). My wife is desperate to buy a house and I'm constantly encouraging her to keep on waiting but there's no telling for how long I can keep up the fight (after assuring her back in 2007 there is going to be crash any minute)!

Stocks/Shares is probably my best way to go as i can be as cautious/adventurous as i like but I'm nervous about starting a fund with £3k and losing it due to not keeping on top of the news etc. Plus I don't really know where to start!

~S~

Buckle down, and wait for the fall. You need to hold your jobs to maintain income. Unless you find something below 30% of current market price don't even bother.

We need a 30-40% correction in this country. I am baised only because I am not leverage, but other than that I will loss that amount on my own home. So no point talking down the current market. If markets do not correct (which is a possibilty) inflation will hit sky high, unempolyment will raise and the next generation will get screwed. Eventually the unempolyed, no property, no pension crowd will revolt. Those with cash will be laughing and leaving the country for cheaper shores.

[General Congreve]

I'm nowhere near retirement age either, in fact I'm still (for a very little while) the right side of 30. I am full time employed with a reasonable wage which currently allows me to save around £300 a month (I also have my own business but this doesn't generate enough money to pay a wage yet). My wife is desperate to buy a house and I'm constantly encouraging her to keep on waiting but there's no telling for how long I can keep up the fight (after assuring her back in 2007 there is going to be crash any minute)!

Stocks/Shares is probably my best way to go as i can be as cautious/adventurous as i like but I'm nervous about starting a fund with £3k and losing it due to not keeping on top of the news etc. Plus I don't really know where to start!

~S~

20% of your savings in gold should help to offset negative real interest rates eating into your savings. Money week recently published this graph that showed how the gold price reacts versus real rates plotted over 281 different 12 month rolling periods in the last 40 years (in the US). The conclusion is pretty obvious (I've attached the graph below).

If rates suddenly move positive, you can always sell your gold before the effects of positive rates take hold. Even without following the markets it should be obvious when rates rise. Even if you miss this big news and gold halves in value, you'll only lose 10% of your savings, not a bad insurance premium in a worst case scenario.

Having said that, the gilt/bond markets forcing up rates (that is the only way it will happen) will destroy the fragile heavily indebted economies of the west, thereby destroying their currencies. A positive for gold, a negative for those holding the currency concerned. So as far as I can tell, it's a win-win situation for gold either way. The only way round this high interest rate outcome is for western governments to completely monetise their own debts to keep inflation rates suppressed, which of course will be an inflationary bomb, another reason to hold gold.

Shares will probably be ok over the longer run, if you pick the right ones, but you'll need most of your savings there to stay level and stay on top of things. From 1970 to 1980 following stock indexes made about 5% return over the DECADE. In Zimbabwe's hyperinflation the Zimbabwean stock market protected capital better than cash, but that's not saying much.

Edited December 23, 2010 by General Congreve

[888]

20% of your savings in gold should help to offset negative real interest rates eating into your savings. Money week recently published this graph that showed how the gold price reacts versus real rates plotted over 281 different 12 month rolling periods in the last 40 years (in the US). The conclusion is pretty obvious (I've attached the graph below).

If rates suddenly move positive, you can always sell your gold before the effects of positive rates take hold. Even without following the markets it should be obvious when rates rise. Even if you miss this big news and gold halves in value, you'll only lose 10% of your savings, not a bad insurance premium in a worst case scenario.

Having said that, the gilt/bond markets forcing up rates (that is the only way it will happen) will destroy the fragile heavily indebted economies of the west, thereby destroying their currencies. A positive for gold, a negative for those holding the currency concerned. So as far as I can tell, it's a win-win situation for gold either. The only way round this high interest rate outcome, is for western governments to completely monetise their own debts to keep inflation rates suppressed, which of course will be an inflationary bomb, another reason to hold gold.

Shares will probably be ok over the longer run, if you pick the right ones, but you'll need most of your savings there to stay level and stay on top of things. Fom 1970 to 1980 following stock indexes made about 5% return over the DECADE. In Zimbabwe's hyperinflation the Zimbabwean stock market protected capital much better than cash, but that's not saying much.

B*llocks to gold. Just sheep talk.

Silver has gone up 100% while gold only 30% in the past year. Talk your way out of that!

Get sucked in if you like, and buy into a late bubble.

[General Congreve]

B*llocks to gold. Just sheep talk.

Silver has gone up 100% while gold only 30% in the past year. Talk your way out of that!

Get sucked in if you like, and buy into a late bubble.

Why can't anyone have a reasoned discussion on here about gold without getting abusive and aggressive? It seems to raise hackles like nothing else. I think a lot of it is to do with envy at seeing others do well.

For the record I have a minority position in silver too, which I have held for two years. However, due to dealer spreads and VAT on silver, the benefit of the the price rise since then hasn't generated fantastic returns yet. It has been a lot more volatile too. For me it is more of a speculative bet, although, just like gold I'm sure it has a lot, lot further to go.

However, with the VAT and spreads you need over a 25% positive move in the price of silver before you break even, not the type of risk our OP says he wants to take. With gold it is just the 3% premium over spot that you have to make back before you start making positive ground.

Edited December 23, 2010 by General Congreve

[888]

Why can't anyone have a reasoned discussion on here about gold without getting abusive and aggressive? It seems to raise hackles like nothing else. I think a lot of it is to do with envy at seeing others do well.

For the record I have a minority position in silver too, which I have held for two years. However, due to dealer spreads and VAT on silver, the benefit of the the price rise since then hasn't generated fantastic returns yet. It has been a lot more volatile too. For me it is a much more of a speculative bet, although, just like gold I'm sure it has a lot further to go.

However, with the VAT and spreads you need over a 25% positive move in the price of silver before you break even, not the type of risk our OP says he wants to take. With gold it is just the 3% premium over spot that you have to make back before you start making positive ground.

Gold has become the latest fab. Just like housing before 2008, and like tech stock before 2000, and like the Dutch tunips before that and like the south sea trading comapny before that.

People manuliplating media and prices for their own gains.

BTW, you don't make anything on gold until you sell it! Unless there is another world war you won't be able to use you gold to buy bread on the high street.

In Asian for example silver can be purchase/traded just as easily on the high street as gold. You arguements for gold do not stack up. It is an assest bubble.

Before the rant is over, my other pet hate is the ramping of Apple. Don't get me started on that one.

[J-Hi]

Sugarflux I'm in virtually the same position as yourself. Sitting on lots of cash (in my case in fixed term bonds). Not sure what to do when they mature. Being very conservative I'll probably roll them over and hope GC's prediction of the destruction of fiat currency is exaggerated.

On your other point (pressure from the wife), point out that firstly as you earn most of the money you should have the final say on these matters and secondly as you are much better informed with respect to the macroeconomic situation and it's impact on HP she should accept your greater wisdom.

Nothing annoys me more than pussy whipped men allowing their spouse to push them into house purchases, which simply helps to pump the bubble.

[General Congreve]

Gold has become the latest fab. Just like housing before 2008, and like tech stock before 2000, and like the Dutch tunips before that and like the south sea trading comapny before that.

People manuliplating media and prices for their own gains.

BTW, you don't make anything on gold until you sell it! Unless there is another world war you won't be able to use you gold to buy bread on the high street.

In Asian for example silver can be purchase/traded just as easily on the high street as gold. You arguements for gold do not stack up. It is an assest bubble.

Before the rant is over, my other pet hate is the ramping of Apple. Don't get me started on that one.

Give me strength.

1. Of course you don't make anything out of gold until you sell it, what has that got to do with it? You can sell it for cash when you want, so no problem. Secondly you don't get any value for your sterling until you spend it, so same difference as stores of wealth go. Thirdly I have no intention of using gold to barter for goods. If the pound collapses I will just buy shed loads more devalued pounds with my gold (which will have held/increased its value) as and when I need to, to buy what I need. Why do so many detractors of gold investment always have to resort to alarmist screams of Armageddon? Give it a rest.

2. Seems to me you are plugging silver. I am pro-silver too, but as my previous post points out, silver is not likely to be what the OP is looking for due to volatility risks and VAT/dealer spreads eating into your investment.

3. What has Apple got to do with it? Never heard anyone mention them on here.

Edited December 23, 2010 by General Congreve

[J-Hi]

GC your constant gold and PM ramping does get somewhat tiresome. However, fair play to you for having the balls to invest, so far it's paying off for you. Wish I had the bottle...

[General Congreve]

Thanks GC.

It certainly is an interesting read and does make me think about some of the positives (as well as some of the negatives!)

To be perfectly honest i think it would be more of a risk having physical gold in the house - that's why my money is in a bank at the moment. It's a slight safeguard against theft (from burglars - not a safeguard against theft from the government).

With regards to running to my gold dealer - where would someone buy a lump of golf from?!?? I have no idea! A jeweller ?

It also does seem that the idea of buying gold is becoming more popular amongst people who would never have discussed the idea of savings in the past. Take all the we'll buy any gold' adverts on tv - this is pretty mainstream if you ask me. Which could, impo, potentially indicate that it is nearing the peak.

Perhaps it is something i should consider for a percentage of my savings - after all spreading the risk is supposedly the name of the game...

~S~

Firstly, you do not need to hold physical gold in your house, you can put it in a safety deposit box, but do check out the legal position of your holdings in that box, should that institution fail. One other option are institutions like Bullionvault that store allocated gold for you, but there is the risk of government imposing rules on such institutions that could see your fund unmovable without being subject to new tax rules etc. If you want to go that route, Baird & Co. (the UK's longest established private gold dealer) offer their own allocated storage service, the margin was 2% last time I checked I believe, so cheaper than buying physical. The risks of theft, institutional failure or government intervention is something that needs to be weighed up by the individual when deciding which route to take. Personally I'm all for physical, but that's me.

As for the peak in gold, yes there are a lot of adverts for gold. But what are they saying? They are saying GIVE US YOUR GOLD IN RETURN FOR THESE FLIMSY BITS OF PAPER! In addition to that, the rates they are offering to an ill-educated pubic are laughable. I had a flyer through my door the other day from a jeweller saying they pay as much as £50 per sovereign (something a dealer would buy from you for £190). All these adverts are about is relieving people of their valuable gold as bargain-basement prices, a very wise thing for a merchant to do in the prevailing economic circumstances.

Bearing this is mind, we get to the IMPORTANT bit:

When there are adverts on the TV OFFERING TO SELL YOU GOLD AT GREAT PRICES (inflated above spot), that is when we are near the top of the bull market/in a bubble.

As for buying gold. Yes, a dealer is the best place. There are several decent ones in the UK and purchasing is as easy as buying a book on Amazon or picking up the phone and giving a debit card number, all bars/coins are sent fully insured recorded delivery. All you have to do is a quick search on google. I have already referenced you Baird & Co. I have used them in the past and they are one of the best (a bit posh on the phone - they warm up a bit when you start talking money ), my own personal favourite I refuse to share here, I am keeping them for myself (not that a bit of google research wouldn't lead to to them - but I'm not giving it away), you never know when a rush might be upon us, don't want to be queuing behind other HPCers when that happens!

Edited December 23, 2010 by General Congreve

[General Congreve]

GC your constant gold and PM ramping does get somewhat tiresome. However, fair play to you for having the balls to invest, so far it's paying off for you. Wish I had the bottle...

Look, I am not ramping. The guy asked for some advice, with regard to various things including metals, I am giving it.

I do not just post away saying BUY GOLD. I back everything up with detailed points and arguments, this thread is testament to that. If someone makes a counterpoint (it is rare to actually get a decent one or find anyone offering viable alternative strategies for wealth preservation, it's usually just abuse) I do likewise.

What a lot of people fail to see is the bigger picture. Sticking a wedge in the bank and waiting for a house price crash is losing everyone money, and that strategy will lose people a lot more before this is all over. There are big forces at play and they will affect us all.

As for bottle, fortune favours the brave my friend.

[888]

Give me strength.

1. Of course you don't make anything out of gold until you sell it, what has that got to do with it? You can sell it for cash when you want, so no problem. Secondly you don't get any value for your sterling until you spend it, so same difference as stores of wealth go. Thirdly I have no intention of using gold to barter for goods. If the pound collapses I will just buy shed loads more devalued pounds with my gold (which will have held/increased its value) as and when I need to, to buy what I need. Why do so many detractors of gold investment always have to resort to alarmist screams of Armageddon? Give it a rest.

2. Seems to me you are plugging silver. I am pro-silver too, but as my previous post points out, silver is not likely to be what the OP is looking for due to volatility risks and VAT/dealer spreads eating into your investment.

3. What has Apple got to do with it? Never heard anyone mention them on here.

Apologise for turning into a gold debate.

No I do not have any silver, or sell the stuff, but simply pointing out facts. In fact I have gold aquired when it was $250. It does not deter me from pointing out gold is an asset bubble. Ditto as I mentioned earlier on I own my own house, but I still beleive the UK market is 30-40% over priced.

Gold is basically another currency. It has NO intrinsic value, in science and industry it can be replaced by other materials, and a small amount goes a long long way. Nearly all the gold ever dug up is still around, it does not get used up. It is simply being ramped up by speculators.

Black gold on the other hand would be a good investment as there is a finite amount, it is being constantly used up, and it still cannot be replaced by another fuel yet.

I am simply pointing out facts to the original poster.

There is no security in any investments these days because money is made on volatility instead of long term goals (except real finite items like black gold).

Your portfolio may well be up due to you current holdings in gold, but it does not change the facts about gold.

BTW: look up AAPL if you don't understand my comments about Apple. There is money to be made out there, including gold (but again it does not change what gold is LOL).

And I would be stupid to post all my personal situation on a forum for public consumption ROTFLMAO.

Edited December 23, 2010 by 888

[Fawkandles]

Dont be scared of buying shares. Its simple to do, and can be as cautious as you like.

For example buy some long term holdings in defensive stocks with large steady market caps that profit from stuff that will be in demand for the coming years like gas and uranium. Or copper. Or oil.

In fact the dividends in something like centrica could pay your gas bills which are gunna be higher soon.

[General Congreve]

Apologise for turning into a gold debate.

No I do not have any silver, or sell the stuff, but simply pointing out facts. In fact I have gold aquired when it was $250. It does not deter me from pointing out gold is an asset bubble. Ditto as I mentioned earlier on I own my own house, but I still beleive the UK market is 30-40% over priced.

Gold is basically another currency. It has NO intrinsic value, in science and industry it can be replaced by other materials, and a small amount goes a long long way. Nearly all the gold ever dug up is still around, it does not get used up. It is simply being ramped up by speculators.

Black gold on the other hand would be a good investment as there is a finite amount, it is being constantly used up, and it still cannot be replaced by another fuel yet.

I am simply pointing out facts to the original poster.

There is no security in any investments these days because money is made on volatility instead of long term goals (except real finite items like black gold).

Your portfolio may well be up due to you current holdings in gold, but it does not change the facts about gold.

BTW: look up AAPL if you don't understand my comments about Apple. There is money to be made out there, including gold (but again it does not change what gold is LOL).

And I would be stupid to post all my personal situation on a forum for public consumption ROTFLMAO.

Haven't got time to waste to much more effort on this, got a movie to watch with the missus, but...

1. Are you telling me oil isn't volatile, manipulated or prone to bubbles? $150/barrel ring any bells?

2. Because gold doesn't get used up it makes it the perfect stable currency (or currency backer). Always has been. As for being a currency, yes it is. As I'm sure you are aware currencies strengthen and weaken versus other currencies. Now, which is the only major currency in the world that isn't backed by a shed load of debt and an overheating printing press that is busy trying to mitigate that debt with a flood of fresh notes? Which currency is going to come out on top in this scenario do you think?

3. I know what the f4ck Apple is and I know the FED are pumping it, but what does it have to do with this thread?

4. I think you'll find the bubble is in FIAT when all this is over.

Goodnight!

Edited December 23, 2010 by General Congreve

[porca misèria]

Hi

I have a STR fund

STR as in save to retire, or sold to rent? I guess the former, since you're not a speculator.

Good basket of assorted assets. Expect some to prosper, others to fail, but time is on your side.

And if/when interest rates rise, the dynamics of different asset classes changes: cash suddenly improves relative to many asset classes. Especially leveraged assets - like houses.

[porca misèria]

I totally agree. If someone on here told me "Go and buy blue cheese"

Good idea. An asset class the Brits do really well, from classic Stilton to more exotic delicacies.

[Peter Hun]

Dont be scared of buying shares. Its simple to do, and can be as cautious as you like.

For example buy some long term holdings in defensive stocks with large steady market caps that profit from stuff that will be in demand for the coming years like gas and uranium. Or copper. Or oil.

In fact the dividends in something like centrica could pay your gas bills which are gunna be higher soon.

I agree, shares pay a dividend and give capital appreciation if they are solid companies. The reason share prices are climbing as they are considered an inflation hedge by institutional investors.

Forget holding much (<10%) gold or any other metal, its a very high risk Ponzi scheme, probably at its peak and when gold crashes it does so spectacularly. Just holding gold loses money with inflation and turns you into an obsessive gold ramper apparently - well how else would the 'investment' work if you can't get other people to prop the price up.