Are Gold and precious metals a good investment in 2019?
Someone asked the question on Quora and I answered on there. I thought it would be good to expand on my answer here.
It’s always a good idea to have a small % of your overall investment plan in gold. How much depends on your need for returns and security. The gold price can do well when other investments are uncertain. I’m not so sure about the other metals as they are more speculative. I own a small amount of gold for investing and leave the other metals to the pro traders.
Gold is regarded as safe to own in the long term as the value of currency will fall due to inflation and the price of gold will rise steadily over the years. It’s regarded as a good hedge to offset losses when stocks and bonds lose money and stabilise your overall portfolio. On the other hand gold won’t offer any growth in some years, it pays no income and storing gold costs money. You can buy and install your own safe and buy good insurance to cover it or you pay someone to keep it safe for you.
According to investopedia (1):
Gold should be an important part of a diversified investment portfolio because its price increases in response to events that cause the value of paper investments, such as stocks and bonds, to decline. Although the price of gold can be volatile in the short term, it has always maintained its value over the long term. Through the years, it has served as a hedge against inflation and the erosion of major currencies, and thus is an investment well worth considering.
A good way to move into gold would be to DCA (Dollar Cost Average) in by buying a small amount every month or every week. That way you will be buying a good average price, not all at potentially the best price but also not the worst (highest) price. I’ve used BullionVault for years to buy and hold physical gold with low fees and they offer an automated gold buying service.
- Set up a BullionVault account and switch on Auto-Invest in ACCOUNT > SETTINGS.
- Set up an automatic payment or standing order with your bank to make regular deposits every month to your BullionVault account.
- BullionVault charges a transaction fee of 0.5% on buying and on selling gold at the Daily Price. This includes the premium charged by the market, physical allocation, vault delivery charges and our commission. Daily Price orders placed in British Pounds, Euros or Japanese Yen incur an additional 0.3%.
- Any available funds in your account if over the minimum order size for a Daily Price purchase in that currency: $100, £65, €90 or ¥5,000) will be committed to buy gold at 2.45pm London time at the main-market clearing price for that day, on UK business days.(2)
I find Bullionvault a relatively cheap, easy and convenient to buy and hold physical gold. The custody charge is 0.12% per annum for gold with a $4 per month minimum.
Here is a link to BullionVault: Buy Gold, Silver & Platinum Bullion Online
(2) BullionVault: Buy Gold, Silver & Platinum Bullion Online
Here are the answers given to this question on Quora: https://www.quora.com/With-the-volatility-in-the-market-is-precious-metals-a-good-investment-in-2019
Here is another opinion on WordPress: https://therayjourney.com/2019/02/16/investing-in-gold-to-buy-or-not-to-buy/