Investing in Bullion
It is unlikely that all investments will perform well at the same time; successful investors identify the right markets at the right moment. Physical gold is a notable exception to this rule—because it is a long-term investment, there is never a bad time to own it. It is generally recommended that a savvy investor holds at least 5% to 15% of their portfolio in physical gold.
Investing in physical gold
Our focus is on physical gold only as a means of investment. This includes gold bars and gold coins.
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- No ETF-backed gold (paper stocks and shares)
Investors pay a premium over the spot gold price on bars and coins. Generally, the smaller the coin, bar, or investment size, the larger the premium per ounce.
Additionally, diversifying your investment interests across stocks, property, and precious metals is a smart, lower-risk way to manage your portfolio. If your stocks are underperforming, the likelihood is that the gold price will outperform.
It is worth noting, however, that if your short-term outlook for the wider economy is very positive, you may wish to keep your gold investment to a minimum, as the gold price may dip when the global economy recovers and begins to grow at a faster pace.
When you buy physical gold and choose to liquidate it for any reason, you will typically either make a profit or take a small loss of around 2%, depending on market conditions. Generally speaking, you tend to recover the majority of your funds.
Small bars and coins have accounted for approximately two-thirds of annual investment gold demand and around one-quarter of global gold demand over the past decade. Demand for bars and coins has quadrupled since the early 2000s, a trend seen across both Eastern and Western markets. New markets, such as China, have emerged, while older markets, such as Europe, have re-established themselves.
STORING YOUR GOLD
Most investors safely store their bullion at home, just as we store and insure our gold jewellery. After all, this is one of the key benefits of owning physical gold. However, we advise taking sensible precautions to ensure the security of your investment—most importantly, insuring your gold.
Owning physical bullion may involve additional costs beyond the purchase price, including insurance and storage.
A discreet safe at home is a good option, while storing your gold in a bank or with a refinery for a small fee is also recommended. If you are unsure about how best to store your gold, simply ask us—we are here to help.
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