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In a world where financial markets are as unpredictable as ever, safeguarding your investment portfolio is of top priority. One of the, if not the, most powerful asset, that has stood the test of time and market volatility is gold. Often regarded as the ultimate investment insurance policy, gold boasts unique characteristics that set it apart from all other traditional assets, apart from maybe silver. Its value and performance tend to move independently of other investments, making it a safe haven when markets get shaky or inflation rears its ugly head. As I often do, I will take you on a journey into the world of gold and precious metals investment, shedding light on how you can bolster your portfolio's resilience and potentially save you from the perils of a financial collapse.
One of the most direct ways to introduce gold into your investment portfolio is by acquiring physical gold, also known as "stacking" bullion. Gold bars and coins, minted by reputable institutions like the UK's Royal Mint or trusted precious metal dealers, are tangible assets that can fortify your holdings and stand you in good stead when the SFTF!! But before you take the plunge, it's essential to do your homework on pricing. Gold dealers typically make their profit by selling above the spot price and buying below it. This spread varies based on factors like bullion weight, gold content, supplier reputation, and current market dynamics. The good news is that investing in physical gold comes with tax advantages. Stamp duty and VAT are non-existent on purchases, and when you decide to sell coins produced by the Royal Mint, such as Britannias and gold sovereigns, you won't be liable for capital gains tax since they're classified as legal tender.
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Gold coins, in particular, can carry extra allure due to their potential rarity and collector's appeal, often referred to as semi-numismatic coins. The one-ounce UK gold sovereign, stands as the most commonly traded gold coin with the smallest premium over the spot price. Other favored options include the UK Britannia, Canadian Maple leaf or the Austrian Philharmonic, all boasting 24-carat gold, and weighing 1oz. Nevertheless, it's essential to factor in additional costs like delivery, insurance, and secure storage when considering physical gold.
If the thought of storing physical gold seems daunting, don't worry; there are digital solutions available. Online investment platforms like GoldMoney allow you to invest in gold bars or coins securely stored in their vaults. The Royal Mint also offers a digital alternative where you can invest in physical gold, silver, or platinum based on monetary value rather than weight, all conveniently housed within their vault. While it may be cheaper in the short term, I can not emphasize this next bit enough - " IF YOU DONT HOLD IT, YOU DONT OWN IT". For those who wish to use their gold for everyday transactions, apps like Tally or Glint enable you to invest in gold stored in Swiss vaults, converting it into credits for use through the app or a specialised debit card.
Regardless of how you choose to invest in gold, it's essential to weigh the pros and cons up and do whats best for you as an individual. Supporters of gold investment, like myself, see it as a valuable diversifier in times of correlated market turbulence. Critics, on the other hand, point out the absence of income generation, whether through physical gold or dividend-less ETFs. Moreover, the price of gold can exhibit short to medium-term volatility, making it challenging to pinpoint the ideal entry or exit points. Another saying i enjoy passing off as my own(its clearly not) is - " Its never about TIMING the markets, more so its TIME IN the markets that offer the greatest returns"....
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Before taking the plunge into gold investment, it's prudent to consider its historical performance. While past performance doesn't guarantee future returns, the recent data is somewhat telling. As of July 2023, an ounce of gold was valued at $1,958, a notable surge from $1,714 just a year prior, marking a healthy 14.2% increase. Looking further back, in July 2018, gold stood at $1,231, translating to a remarkable 39% climb over the past five years. In comparison, the FTSE All Share Index struggled, registering a 1.32% decline over the same period. However, timing does remain a crucial factor, and predicting it accurately can be challenging. If you had invested in gold three years ago, you would have bought it at $1,936, which briefly spiked to $2,067 in August. Despite the rollercoaster ride, your return would have been a modest 1.1%.
But it is incredibly important to remember that in the current climate of currency instability, gold is still hovering near its all-time highs, still effectively preserving wealth in a crazy and challenging year. Looking forward, the looming specters of inflation and geopolitical turmoil may further buoy the gold price in the long run. Investing in gold isn't just about protecting your wealth; it's about embracing a timeless asset that transcends market volatility, providing a beacon of financial stability in an uncertain world. Whether you choose the tangible allure of gold coins or the convenience of digital investments, gold could be your secret weapon in safeguarding your financial future.
If you dont own any precious metals, then why not tell us? As a community we encourage ALL engagements and encourage everyone to take the plunge and own at lease a sinlge ounce of silver or a fraction of gold. If your struggleing to find a safe and secure place to buy, reach out to the community as there is always someone willing to offer their time and advice to help you out.
40+yr old, trying to shift a few pounds and sharing his efforsts on the blockchain. Come find me on STRAVA or actifit, and we can keep each other motivated .
Proud member of #teamuk. Teamuk is a tag for all UK residents, ex-pats or anyone currently staying here to use and get a daily upvote from the community. While the community actively encourages users of the platform to post and use the tag, remember that it is for UK members only.
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Want to find out more about gold and silver? Get the latest news, guides and information by following the best community on the blockchain - #silvergoldstackers. We're a group of like minded precious metal stackers that love to chat, share ideas and spread the word about the benefits of "stacking". Please feel free to leave a comment below or join us in the community page, or on discord.
