Is 10% of assets into gold sensible advice at present?

H

Hooverfish

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Age: 58
Spouse’s/Partner's age: 67
Annual gross income from employment or profession: 29k part time
Annual gross income of spouse: pension 12k
Monthly take-home pay 29/12= 1950
Type of employment: e.g. Civil Servant, self-employed PAYE with some self-employed

In general are you:
(a) spending more than you earn, or
(b) saving?
Difficult to predict due to parent-care responsibilities that change! But about neutral.

Rough estimate of value of home - not relevant, we own it outright, we're not moving.
Amount outstanding on your mortgage: NONE
What interest rate are you paying?
Other borrowings – car loans/personal loans etc - NONE
Do you pay off your full credit card balance each month? Yes
If not, what is the balance on your credit card?

Savings and investments:
Do you have a pension scheme? Yes
Do you own any investment or other property? No
Ages of children: none
Life insurance: none - we don't need any

What specific question do you have or what issues are of concern to you?
We've recently been advised to put 10% of our assets into gold because:

- world excessive debt
- likely long term low interest rates mean opportunity cost is low (gold doesn't give you any income - less of a problem when interest rates/equity returns poor)
- cash balances are likely to cost money to deposit for next few years
- Trump/Brexit/general trade chaos/climate change
- Good hedge against a future problem with the dollar

While we don't disagree with this general view, gold investment seems to be changing recently.
- Over a third of it's in jewellery/decoration and younger people, particularly in markets like India, are no longer as interested in gold decoration
- Price of gold is currently quite high
- The environmental and human cost of gold mining bothers us, as it probably does many
- What actually happens to gold ounces held in Zurich if everything goes tits-up? How does it help you get food and shelter?

Would be interested to know what people think about gold, or any other factors we should consider, before making a decision? Thank you for your views.
 
Hooverfish,
You've gone to a great deal of trouble and writing in not telling us anything about assets, worth, wealth, house value, etc. Sort of difficult to have an answer for such vague information.
 
Congratulations on having a paid off home and zero debt. Those two things right there are probably the best two things anybody can have under their belt.

10% is ok, it's not going to hinder or hurt you to have 10% in gold. Presume you mean physical gold. It's nice to have but you end up having to mind it and sell it down the road or if you want to leave it to somebody when you die you will have to explain to the person its value and how to sell it. Not everybody will understand its value, in particular younger people.
Gold isn't going to make you much if anything, it's a store of wealth , It's not really an investment. You might get a spike in value in an economic meltdown.
Over the past 40 years it has been shown that the stock market is a better return than gold .
Avoid individual companies, Buy an index that exposes you to a wide range of companies

Equity returns are good , due for a correction perhaps or maybe not . Over the long term you should get at least 5% pa compounded on your money(conservative estimate). If or when a correction comes then that is an opportunity to buy an index/stock cheap.

If you have spare cash that is not making you anything then put some solar PV panels up on your roof.
at least that will give you a low risk return over the next 25 years. And with the new feed in tariff scheme (expected to be announced in the budget), it would make good sense in the case where a bank is paying you nothing.

rough example: 4kw solar pv system with battery will cost you 6k after SEAI grant. You will get approx €400 in electricity savings per year . Depending on the feed in tariff the electricity provider will give you then that could be another €100 per year. Money back in 12 year and after that you are saving approx 500 per years in today's money. with Electricity prices going up 3-4% each year your payback will probably be much shorter.
 
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You have a pension scheme (public service scheme?), you are 58 and 67, you own your own home, mortgage free, you have no debt.

You should not invest in gold. I am not going to get into the reasons as if it was some kind of debate with considerations on both sides, its not, someone is trying to sell you something, be careful.

Hooverfish said:
Rough estimate of value of home - not relevant, we own it outright, we're not moving.
Click to expand...

To recognise that the value is irrelevant in these circumstances is a good insight.
 
Thank you for the replies. @noproblem - I'm sorry, I just didn't have time to fill in those bits and I didn't feel they were relevant since the question was about a percentage. Perhaps you feel there is a minimum or maximum amount for assets that is unwise regarding the 10% advice that we received? Whatever it is, we're small fry, so we likely didn't exceed it!
 
If it was me at that age I'd max out the state savings. If I still had cash left over I'd invest in equities via the investment trust route (which was pointed out to me by Sarenco on here) they are like ETF's without the tax hassle . If I was worried about the stock market crashing I would have a percentage of my portfolio in so called "defensive stocks" stocks that generally don't fall as much during a crash , there's no guarantees of course.
Instead of buying gold I'd rather future proof myself by doing stuff that will pay back over time , not so sure about solar panels but changing to electric cars and insulating the house etc can bring savings down the line.

That's just my unqualified unpayed opinion but I'm paranoid about everyone so would wonder why your advised to buy gold.
 
Don't invest in gold held in Switzerland or in gold certificates held by Australian banks.

If everything goes tits up, God alone knows what's going to happen. The Govt. in an emergency may seize your gold for the common good. The Australian system might crash and what are you going to do, or be able to do about it. Zilch.

My advice is to buy gold sovereigns and hold them yourself, in a bank vault, not on deposit. Sovereigns are small enough. Krugerands and other 1oz coins are too big. If you want to sell one now, you have to find someone willing and able to come up with over E1,200, whereas if your selling a sovereign, they only need E300 so.they are far more practical.

Don't go near jewellers or anyone else charging a big commission on the purchase and again on the sale. They'll fleece you.

Sovereigns are recognized everywhere in the world, so it's easier to trade than some lesser known foreign coin.

Just my tuppence worth
 
It sounds cool to own some gold. Apart from that it just sounds like way too much hassle!
 
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