A family member is purchasing gold worth $60000 as a investment . Is it worth it? I didn’t give any advice or any input as I have no idea, but it does make me think is it worth it?
Any experiences or knowledgeable people out there ?
Is It Worth Buying Gold as a Investment?
FujiFruit on 09/01/2022 - 19:37
Last edited 09/01/2022 - 19:43
Last edited 09/01/2022 - 19:43
Comments
A family member is purchasing gold worth $60000 as a investment
That's only about a kilo, which is tiny! haha
Is it worth it?
It's just like any other investment - the prices go with the market so any "advice" on future prices is just speculation. They'll also need to find someone to buy the gold near the market price later when it comes time to sell.
Gold has a really specific purpose as an investment, and that is retaining value when everything goes to custard.
The best way I have seen it articulated is in Nuriel Roubini's Black Swan book, where he describes the ability of his family to flee the civil war in Lebanon with some wealth, because they had some physical gold investment to carry with them.
In WWII there were similar stories about people surviving the holocaust (but also many where it didn't help).I'm sure similar tales are told in Zimbabwe, Venezuela and other places where the financial system has broken down.
Otherwise, gold is only useful at times of high inflation (or when people are scared it is coming!), when your money is worth substantially less each year, and people flock to gold to hang on to what they have.In all these dire circumstances, a big advantage is being able to bury a chunk in the backyard and know it is there. $60,000 is a bar weighing 750g at today's price, so easily concealable and transportable (and stolen!).
In all other times, gold is not a great investment, in my opinion, as it pays no return, has a fairly volatile price, and has been subject to sovereign risk (google the gold standard for the problem between 1920 and 1970).
If this is an investment as an emergency backstop against disaster, from a person who has $1m+ in investments, it is not unreasonable, I guess.
If it is a substantial part of that person's worth, it probably isn't a good investment if they are hoping to make money from it.
Phunkydude makes the point above that gold miners can be a much better investment, if you aren't worried about the end of the world, as they typically pay dividends and benefit from the price of gold going up. But they don't have the end of the world insurance aspect.
As usual mskeggs has the best answer in the thread.
One thing I'd add: gold is super important as a show of wealth and class and prestige in some countries where
a) wealth and class and prestige are super important in that culture, far more than in Australia
b) hundreds of millions of people are getting a lot wealthier relatively quickly at the momentlike India, for example. IT outsourcing is ballooning upper-middle-class wealth in India and all of those people are buying as much gold as they possibly can for their weddings and so on.
So forecasts of the growth in certain developing nations are good forecasts for increase in the gold price.
Gold bullion isnt' like other investments as it will not provide an income in terms of dividends or compounded returns….but is good as a store of value in uncertain times . Over last 20 years it has traded from US$1700 down to $1100 and back up to 2000/oz in 2019. When you then look at converted to AUD it actually looks quite fantastic,ranging from 600 AUD in 2002 to over 2800 in 2019 without the dip in the middle years, but thats only on the back of fortunate curreny rates.
Gold is more a relative safe store of value that will always be redeamable on bullion markets, much like high rated goverment issued bonds, and wont go broke like a company can, but as an investment where you may get a return, well thats less assured, you could easily hit a loss as much as a gain as its not based on performance but more on market/world stability, the more volatile, the more money is pumped into "safe" investments like gold.
A few years ago buying USD would be a good investment.
Almost everything is s good investment.
But it's better to focus on one method.
As you lose track of lots of investments.
Like any investment if you know what you are doing then it will be a good investment.
I'd take gold over bitcoin. If gold crashes it will recover, but anytime bitcoin crashes that could be it forever.
In an apocalypse, yes.
In any other situation, no.10 year return on gold is around 0%, and will be the same 10 years from now unless there's a major societal collapse.
I hold some gold and silver, but if you're looking for an investment, look elsewhere.
Well the 10 year return on gold is more like 50%
And the 20 year return is 360%
So an apocalypse isn't required for a return, unless you belive we have been living through a 20 year apocalypse.
Well the 10 year return on gold is more like 50%
And the 20 year return is 360%The 10Y ROI is way off and the 20Y ROI was ok.
People shouldn't expect gold to 6x in the next 20Y.
Ozbargain.com.au
And no, I wouldn't expect gold to 6x in the next 20 years either.
In a true apocalypse, your gold will be worthless. What you need are fertile land and body of water, and weapons to defend yourself.
weapons to defend yourself.
Are we allowed sharp sticks still? It are they too dangerous for us?
Nup. Gold doesn't provide value to anyone. It doesn't work. It doesn't make an economic good.
Gold is very good for making electrical contacts.
Isn't what makes it valuable though
You said
Gold doesn't provide value to anyone.
But, it does.
@brendanm: Topic title: Is It Worth Buying Gold as a Investment
My comment: Addressing it as an investment
go away
Gold is like getting a 10 year bond, basically if you cash it out early, you will need to sell it under value
Not to mention ATO will know you bought it.
Where is the fun in that?
U can't touch it and have to pay GST plus fees.
Have about 1-2% of my portfolio in gold.
Silver is a better investment right now
Gold is a good hedge against inflation.
Gold is not really a great investment, it more of a store of value, it cost you to hold and generates no income so it cant really considered a good investment
people buy gold in unstable countries to store their wealth, my parents used to buy gold when we live in third world countries as everything else is too risky
police and corrupt official can seize your houses, hard to find where you hidden your goldnot a single ounce of gold when we live in Australia, housing and shares provide much better return in stable countries like Australia, US, Germany, UK etc…
paper gold , or real gold
might as well invest on gold producer shares ?
newcrest mining - ncm
northern star - nst
dyor , not investment advice