Posted by
bailout10
15 yrs ago
Hi,
Would anyone know much about investing in gold and how to go about it? I am looking to put some money in there but not sure if it is good to buy certificates or unit trust. Also, is there a minimum amount requirement? Any other insight is welcome.
Thanks.
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Ed
15 yrs ago
If you are investing in gold as an 'armageddon' hedge (i.e. you fear possible financial collapse)... you would want to buy physical gold and hold it in a safe deposit box or in a safe at home.... If you have an account at Hang Send Bank I believe you can purchase up to HKD200k over the counter... normally I think they stock Aussie 1 ounce coins and standard taels...
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As Ed said, if you're afraid of a possible financial collapse then go for physical gold and store it. Note you'll have to pay storage costs.
If you just want it as a hedge against inflation and/or the US dollar declining, then you can have 5-15% of you portfolio invested in it.
Depends on what else you hold or have at the moment as to what you should buy. If you've already got a regular savings investment plan then you can switch one of the funds to a gold or mining mutual/unit trust fund.
If you just want a one-off purchase you can always buy a gold ETF (Exchange Traded Fund).
So it really depends on what you want to do with it, but whatever you do it should be part of a diversified portfolio.
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Hi Ed and Chris,
Many thanks for your inputs. I am planning to invest in gold as a hedge against inflation and also as a mode of investment for my son. I have traditionally only invested in property but would like to diversify that. I am not too knowledgable about the other modes of investment.
Chris,
If you are familiar with any of the savings investment funds that are worthy of investing in, could you share that please?
As for investing in gold funds, I believe they are usually Oz-based. Am I correct?
Many thanks again.
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Hi Bailout10,
You're welcome.
Yes, I'm familiar with many of the savings investment plans. However, if you've got HK$100,000 or more to invest there are investment plans with no lock-in period, less charges, and less fees too. They're not widely available though.
Depending on your investment horizon I'm actually not sure investing in gold is a good move for your son. Either dial back on the allocation or don't have any gold. I'm assuming he's quite young and you're investing it for the long term. In that case you're generally better off investing in more risky assets for greater growth potential, as you've got a longer time to invest over.
Gold funds are available in many stock markets around the world. If you're talking about where gold is produced then it's South Africa, United States, Australia, Russia and Peru. The companies mining gold are Canadian, American, South African and then Australian, but they really all have international operations.
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Many thanks Chris. Thank you also for being candid with your advise of not investing in gold for my son. Is it because you not think gold is a more reliable form of investment for the long term?
The savings investment plans with no lock-ins, less charges and less fees sound too good to be true. Where shall I go looking for such opportunities? A portfolio manager?
Best regards
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I don't like gold as a straight investment as it's not like a company where you can look at fundamentals such as it's financial accounts, sales, profits, debt, etc. You can use that to determine what's a fair price to pay. Also, a company can pay you dividends while you hold it. Gold on the other hand doesn't pay you for holding it, in fact you need to pay for storage. But mainly the value of gold is basically what people say it is, so it's very hard to determine what a fair price is. You end up mainly just looking at charts.
However, that said I understand that gold does play a part in diversifying a person's portfolio, which is why I would include it to dampen the volatility of someone's portfolio. But in the case of your son, if you're not going to need to pull the money out for a long time, it doesn't matter what volatility is like in between times, you just want growth.
Savings investment plans with no lock-in, less charges and less fees? Yes, it does sound very good. The catch is you need HK$100,000 to get in to them. The product has been around in Australia for 20 years, came to Singapore over 5 years ago, but it's only got to HK the middle of last year.
I'm not going to advertise their product here but I'll PM you.
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I think it depends where you see gold going, but if you're looking to invest some of your portfolio in gold (as chris said, for diversification) then i'd rather invest in physical gold over an ETF.
an ETF is great if you're looking for liquidity, but some investors have expressed concern over whether these funds really have the physical metal to back up their trades. If those concerns turn out to be justified, then investors holding paper gold (or other precious metal ETF's) will be left holding some expensive paper...
Buying physical gold in Hong Kong is very easy - you can buy it over-the-counter at Hang-Seng Bank's central branch, several branches of The Bank of China also sell gold rounds and there are other dealers around town (though check thier standing with the gold and silver exchange) who deal precious metals in rounds and bars. Some jewelry shops also sell collectible gold coins but there are more for numismatics than pure investment as a commodity. Annother benefit is that the tax laws in Hong Kong make investing in precious metals much simpler than other countries where you need to declare your investment...
you might also consider getting some leverage with mining stocks. With the recent dip in the Hang Seng index there may be an opportunity to buy coming up, but with the recent volatility i wouldn't want to rush into anything just yet.
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Hey Iain, thanks very much for your input. I am still not sure how I must go about investing in gold, but all opinions/ inputs give me some insight which is quite helpful.
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k2woo
15 yrs ago
Dear Bailout:
I think that you’ve got the right idea by adding gold to your investment mix. As Chris in HK indicated, there are several choices when it comes to gold; I would add to those options a dedicated gold trading account. There are pluses and minuses to each, but I think a dedicated gold account will give you the most flexibility. Unlike physical gold, a gold trading account will allow you to buy and sell when you want. For example, if the price of gold moves dramatically due to news in the US and you want to buy more or sell what you have, you would be hard pressed to get a quick transaction with physical gold. With a gold trading account, you can pretty much transact 24/5. In addition, you have the ability to speculate on its price by shorting, and to use leverage if you so desire. The one drawback, if you believe in an Armageddon scenario, is that there is no physical delivery of gold. But then again, if there is such a giant meltdown, who really knows what the value of gold will be! Under most normal circumstances, paper gold is just as good as the real thing, without the storage and theft worries.
If this is something you would like to find out more about, I can be of assistance. I am a Financial Advisor that specializes in gold and silver. I can talk to you about your different options in detail, pros and cons, as it relates to gold investing. I will leave my contact info via PM. Hope this helps!
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Here's a useful article - What Gold Can (and Can't) Do For You from Yahoo Finance and US News:
http://finance.yahoo.com/news/What-Gold-Can-and-Cant-Do-For-usnews-1148455356.html;_ylt=AkK.Iq.QK.SkERJa6xERkgW7YWsA;_ylu=X3oDMTFhN21hZmxnBHBvcwMyBHNlYwNzcGVjaWFsRmVhdHVyZXMEc2xrA3doYXRnb2xkY2FuYQ--?x=0
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