Gold, Silver, Stocks, Cash or Equities?

[ZRPMs]

36 minutes ago, walker said:

Hello im trying to find out how to buy gold  without paying the crazy expensive premiums ?? Any help would be greatly appreciated. I don’t mind a premium just hate paying $80-$100 + over spot

I'm Not sure about the US. But the best best deals I've had have come from local dealers I've built a relationship with. It's going to take some phone calls and quite a few conversations with dealers. I've noticed that the premiums have increased lately. Speaking to a few of the dealers when I was trying to make my recent purchase and they all said they have had to offer to pay a little more to get the stock in. There seems to be quite a high demand for the physical so even the competition between the dealers has increased. 

[Bratnia]

On 11/12/2022 at 03:20, ZRPMs said:

Having cashed out of the property I have now lost the income generated from the rental. Whilst I don't need to match or find a greater rate of income. It would be prudent to invest at least some into an income generating investment. I would also like to add a bit of gold in the form of some Sovereign's and/ or Britannia's.

So, my multi part question is. What are peoples thoughts on the price of gold and silver in the near future? As we close out 2022 what is the likely direction for 2023? Is it better to wait a little for a slump in the new year or are we looking at a strong physical market price and will we get to £3,000 an ounce as a few have been saying to me.

50/50 stocks and gold, FT250 tracker fund such as VMID and Britannia coins.

Broadly similar historic reward as house + rent gross returns, waxes/wanes, but without the additional costs and hassle from buying/renting.

The 50/50 stock/gold barbell combines to a central bullet, in effect gold hedges stocks, stocks hedge gold, but not consistently so, some years can have both up, or both down.

In US scale, UK FT250 is somewhat small cap value, and in the absence of UK data you might reference US data for 50/50

Accumulation/growth PV

After 4% SWR PV MC (Monte Carlo simulation. 4% SWR = 4% of the initial portfolio value drawn as income in the first year, with that amount uplifted by inflation as the amount drawn in subsequent years).

I'd lump in over two time-points, half immediately, the other half a year later, so as to better avoid having lumped all-in at the worst possible time. I'd also defer buying Britannia's, initially buy a paper-gold version instead (gold ETF), and later migrate that over to physical gold (Britannia's) after the portfolio had made modest/reasonable gains. Not eating your own capital to pay the Britannia spread, but instead using 'other peoples money'. 4% Britannia spread (premium to spot gold), portfolio up 8%, count it as a +6% up year and where you sold the gold ETF to buy Britannia's).

Don't know and don't really care to predict whether 2023 will be good or bad for gold (or stocks). There's a reasonable chance that if one is down the other may be up. Historically if you long term average the yearly best of the two, and average the yearly worst of the two, those averages are something like +24% and -4%, such that 50/50 averaged +10%. I'd guess that with 2022 having seen FT250 down and gold up, wouldn't be surprised if that flipped around in 2023. £ has dropped quite a lot, US$ has gained a lot, wouldn't be surprised in 2023 saw $ down, £ up, in which case the price of gold would tend to decline in terms of £'s.

[Bratnia]

17 hours ago, Bratnia said:

50/50 stocks and gold, FT250 tracker fund such as VMID and Britannia coins.

Broadly similar historic reward as house + rent gross returns, waxes/wanes, but without the additional costs and hassle from buying/renting.

The 50/50 stock/gold barbell combines to a central bullet, in effect gold hedges stocks, stocks hedge gold, but not consistently so, some years can have both up, or both down.

In US scale, UK FT250 is somewhat small cap value, and in the absence of UK data you might reference US data for 50/50

Accumulation/growth PV

After 4% SWR PV MC (Monte Carlo simulation. 4% SWR = 4% of the initial portfolio value drawn as income in the first year, with that amount uplifted by inflation as the amount drawn in subsequent years).

I'd lump in over two time-points, half immediately, the other half a year later, so as to better avoid having lumped all-in at the worst possible time. I'd also defer buying Britannia's, initially buy a paper-gold version instead (gold ETF), and later migrate that over to physical gold (Britannia's) after the portfolio had made modest/reasonable gains. Not eating your own capital to pay the Britannia spread, but instead using 'other peoples money'. 4% Britannia spread (premium to spot gold), portfolio up 8%, count it as a +6% up year and where you sold the gold ETF to buy Britannia's).

Don't know and don't really care to predict whether 2023 will be good or bad for gold (or stocks). There's a reasonable chance that if one is down the other may be up. Historically if you long term average the yearly best of the two, and average the yearly worst of the two, those averages are something like +24% and -4%, such that 50/50 averaged +10%. I'd guess that with 2022 having seen FT250 down and gold up, wouldn't be surprised if that flipped around in 2023. £ has dropped quite a lot, US$ has gained a lot, wouldn't be surprised in 2023 saw $ down, £ up, in which case the price of gold would tend to decline in terms of £'s.

Using Kenneth French's data for earlier UK years, before the FT250 index was released, FT250 data from when available ...

 

 

Edited January 2, 2023 by Bratnia

[Bratnia]

14 minutes ago, Bratnia said:

Using Kenneth French's data for earlier UK years, before the FT250 index was released, FT250 data from when available ...

 

 

If you start with 50/50 stock/gold, withdraw a 3% SWR for 30 years, withdrawing from whichever asset has the higher value at the time, no other rebalancing (stock dividends assumed to be accumulated/auto-reinvested) then broadly the final inflation adjusted portfolio value remaining at the end of the 30 years was similar to had you rebalanced the assets back to 50/50 equal weightings each year.

The weightings did drift, for instance in some cases ending up with more than 90%+ in stock at the end of the 30 years, however typically the early years sequence of returns risk was mitigated (heavy stock weightings after many years and any declines are more inclined to be just giving back some of gains rather than eating into ones own capital).

Which could be quite nice. Initially load 50/50 into stock and gold, and thereafter each year you just sell some shares, or ounces of gold, whichever pot had the higher value at the time, no further purchasing of either stocks or gold, just selling relatively small amounts (SWR). And largely mitigates early years bad sequence of returns, if for instance stock dived in the first few years then gold tends to counter-balance those declines, or vice-versa.

[MonkeysUncle]

Late to the original question here but my two cents:

Spread your money over multiple asset classes. Don't throw a huge percentage at metal or shares or magic beans or whatever.

Only invest in anything if you are able to sustain a loss. 

For every chump talking the price of something up there is another talking it down.

Have an exit strategy; that genuinely might be a hold indefinitely/ forever but consider a strategy, otherwise you could well end up resentful that X you bought has shed 70% of its value the last 12 months. 

Never believe any prediction of any market. It's as much a lottery as backing Pantomime Dobbin in the 3.30 at Haydock Park.

 

[ZRPMs]

1 hour ago, MonkeysUncle said:

Late to the original question here but my two cents:

Spread your money over multiple asset classes. Don't throw a huge percentage at metal or shares or magic beans or whatever.

Only invest in anything if you are able to sustain a loss. 

For every chump talking the price of something up there is another talking it down.

Have an exit strategy; that genuinely might be a hold indefinitely/ forever but consider a strategy, otherwise you could well end up resentful that X you bought has shed 70% of its value the last 12 months. 

Never believe any prediction of any market. It's as much a lottery as backing Pantomime Dobbin in the 3.30 at Haydock Park.

 

Thank you, Some wises words. As a bit of an up date,

I've done a bucket list purchase a of 100 Sovereigns. and a couple of other bits and bobs so that should be my metals apart from my normal budget. This has been part of the retirement plan for quite a few years now. I have an eye on the exit plan but still really in the accumulation phase.

I've paid off my home mortgage and some of the BTL mortgages I have. Plan is to get out of the rentals slowly. Sick to death of what the sector has become, and the c**p you have to deal with. Although I do realise it's getting the same in every sector.

I've got my stocks and shares ISA toped up for this year and ready for the next. 

A small amount for some buying and selling. A designated kitty.

I have a little bit left for emergencies and larger opportunities. Always handy to have a bit of dry powder, so to speak.

As an after thought. I best mention I need to invest in a van or pick up. The prop shaft rear joint decided to separate it self earlier today whilst I was driving. It could have been worse, and could have dig in to the ground and flipped me over. As it happens I was pulling up to a set of traffic lights and was only doing about 5 to 10 mph. Repair bill estimate £1000 to £1500. Time for a change. RIP another Transit.

 

Edited January 4, 2023 by ZRPMs

[MonkeysUncle]

Definitely keep some dry powder. I always like to be ready for the worst, then if it happens at least immediate access to money needn't add to worries - I have two years salary sat as cash. About half of that is physical cash safely buried, call me paranoid but banks and IT don't reassure me!