Fast Eddie B
Philosopher
Funny, I’m just remembering them now!
Gold nearing $3,000/oz!
- Thread starter Fast Eddie B
- Start date
Fast Eddie B
Philosopher
Still on a roll!
Yup gold is doing pretty well at the moment due to global uncertainty - which IMO overall is not a good thing. For the record, apart from the usual amount of jewellery and a few gold coins I don't have a gold hedge and therefore am apt to get a bit miffed when stocks are taking a beating and gold is doing well.
Then again. In 1994 I gave up £2,000 of salary to get some share options in the company I worked for. In 1999 these options were vested when the company was taken over and I received half the proceeds in cash, the other half in shares in the purchasing company.
The cash, after some significant capital gains tax, paid off the mortgage on the flat Mrs Don and I were living in at the time (IIRC £57k)
The shares have varied significantly in price. At their worst they were worth less than half of the price I "bought" them for. At their best they were around 6 times the original price. At the moment they're around three times the original price. Although there hasn't been phenomenal capital gains since 1999, I've been getting around £1,000 a year in dividends for the last 25 years.
We still own the flat (though we are in the process of selling it) and it delivers around £10,000 a year income net of expenses and has done for the last 13 years. It has also delivered around £300,000 in capital gains.
So a very lucky initial investment of £2,000 has delivered (directly and indirectly):
- £150k of shares
- £25k in dividends
- £130k in rental income
- £300k in property capital gains
A pretty good return IMO.
Then again. In 1994 I gave up £2,000 of salary to get some share options in the company I worked for. In 1999 these options were vested when the company was taken over and I received half the proceeds in cash, the other half in shares in the purchasing company.
The cash, after some significant capital gains tax, paid off the mortgage on the flat Mrs Don and I were living in at the time (IIRC £57k)
The shares have varied significantly in price. At their worst they were worth less than half of the price I "bought" them for. At their best they were around 6 times the original price. At the moment they're around three times the original price. Although there hasn't been phenomenal capital gains since 1999, I've been getting around £1,000 a year in dividends for the last 25 years.
We still own the flat (though we are in the process of selling it) and it delivers around £10,000 a year income net of expenses and has done for the last 13 years. It has also delivered around £300,000 in capital gains.
So a very lucky initial investment of £2,000 has delivered (directly and indirectly):
- £150k of shares
- £25k in dividends
- £130k in rental income
- £300k in property capital gains
A pretty good return IMO.
novaphile
Quester of Doglets
Yes indeed.
And a fairly grim indicator why it is better to find a way to invest, even small amounts of savings, rather than just blow every cent on avocado toast, $10 coffees, and $30 alcoholic drinks and $50 cover charges. (I was stunned by the numbers of younger people, around me at work, who were always 'crying poor' but always bought their breakfast, lunch and coffees rather than making their own. If I took them at their word, they were always buying their evening meals and 'going out' every night too, but I doubt their veracity.)
Because of my unusual working life, I had, at one stage, six small super funds, so small that they risked being eaten by fees and charges...
At the end of a three year contract, I amalgamated them all into a single fund, ($30k) and since that was now my smallest fund, switched it over to 'high risk high return'.
When I retired, that smallest fund paid off my mortgage and handed over $50k in cash.
As you can imagine, I was pleased with that choice.
rjh01
Gentleman of leisure
If someone wants to invest in the gold price, an alternative to buying gold is to buy a company that mines the gold. Not only will the share price go up and down with the gold price, it should pay a dividend.
Fast Eddie B
Philosopher
Another option is buying a mutual fund tied to gold and gold-related companies. One such…
Advantages: Ease of investing, no need to store physical gold, at least small dividends paid which can automatically be reinvested. Makes it easy to make regular investments, taking advantage of dollar cost averaging.
Disadvantages: In the event of a cyberattack, getting funds out could be problematic. And no doubt there are some fees involved.
As an update, gold has held steady above $3,000/oz, currently at $3,331.
Ads just started showing up on my yt feed telling me smart investors hold gold. But they seem to want my cash so I can get some.
Market must be seen as ready to top out soon by the ones selling it.
The local gold buyers in my area pay nothing near three grand an ounce for it, in fact most stopped buying as prices rose. Says a lot without words.
Market must be seen as ready to top out soon by the ones selling it.
The local gold buyers in my area pay nothing near three grand an ounce for it, in fact most stopped buying as prices rose. Says a lot without words.
Mike!
Official Ponylandistanian National Treasure. Re
I'm likely wrong, but isn't the price of gold directly linked to the value of the U.S. Dollar, and if that is the case, wouldn't the price of gold go up as the value of the dollar drops?
novaphile
Quester of Doglets
Not directly linked I think.
(Not since 1971)
However, if the currency value drops, that looks like the price of other things going up, if the price is expressed in that currency.
Gold is sometimes called: 'the currency of destabilisation' because people buy gold when currency values fall, typically during war, unrest, etc.
It has bothered me that governments can declare gold (bullion, coins, shares) ownership to be illegal (I think this was true in the USA between 1930 and 1970).
So if things get really bad, there's a possibility that the government will just force you to sell your gold.
Fast Eddie B
Philosopher
Interesting.
In my experience, dealers make money on the “spread” between the “buy” price and the “sell” price. They don’t typically sit on a horde and hope it appreciates - they’re not typical investors themselves.
This from Copilot:
The dealer spread—the difference between the buy (bid) and sell (ask) prices for gold—varies depending on market conditions, dealer policies, and the type of gold being traded. Here are some general insights:
• Typical Spread Percentage: For physical gold, such as bullion coins and bars, the spread often ranges from 1% to 5%, though it can be lower in highly liquid markets.
• Example Calculation: If a dealer quotes a bid price of $3,350 per ounce and an ask price of $3,400 per ounce, the spread is $50, or approximately 1.5%.
• Retail vs. Wholesale: Online platforms with high trading volumes may offer spreads as low as 0.10% to 0.20%, while traditional retail dealers may have spreads closer to 5% or more.
• Premiums on Specific Products: Some gold products, like collectible coins, may have higher spreads due to rarity and demand.
psionl0
Skeptical about skeptics
It's always possible that locally, a dealer might have more sellers than buyers at the current market price (ie they would not be able to sell all of the gold they buy).
Fast Eddie B
Philosopher
That’s certainly possible. I’ve only dealt with dealers in Hollywood, FL and suburban Knoxville, TN, the former larger than the latter. But they both seemed to be in positions to either buy or sell on either side of the transaction, with just a few percentage points spread.
My uncle was a gold and silver dealer for close to 60 years and while he made money whether the price was going up or down due to the buy/sell spread, higher prices typically meant greater volume which meant more money for him - typically because most of his customers were hoarders who only ever added to their holdings.
In Mexico near nothing gets hoarded after the price becomes profitable. Scrap iron to precious metals it all gets rolled over in the market when sensible.
Only in case of a death does stuff set long term, until a new owner clears it all out and then resells the land under it if he bought that too.
Only in case of a death does stuff set long term, until a new owner clears it all out and then resells the land under it if he bought that too.
Fast Eddie B
Philosopher
Just noticed we're now more than halfway to $4,000/oz at $3,545.80!
No I get it, all those conservative radio shows shilling gold have finally been vindicated. That's a long con. Always kind of amused me that those guys were basically pitching, society might collapse any minutes so buy a certificate saying you own gold just in case.
And no, I've never really considered it. Everytime it seems like a I good idea, I'm too late and think to myself, "When it drops again, I should buy some" But then I miss the headlines about gold being at an all time low.
And no, I've never really considered it. Everytime it seems like a I good idea, I'm too late and think to myself, "When it drops again, I should buy some" But then I miss the headlines about gold being at an all time low.
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That has always seemed crazy to me.
Gord_in_Toronto
Penultimate Amazing
- Joined
- Jul 22, 2006
- Messages
- 26,454
I own a little bit of iShares S&P/TSX Global Gold Index ETF in my retirement portfolio just for jollies and it has been on an upward trend for a fair time now but it will never make me rich.Another option is buying a mutual fund tied to gold and gold-related companies. One such…
Advantages: Ease of investing, no need to store physical gold, at least small dividends paid which can automatically be reinvested. Makes it easy to make regular investments, taking advantage of dollar cost averaging.
Disadvantages: In the event of a cyberattack, getting funds out could be problematic. And no doubt there are some fees involved.
As an update, gold has held steady above $3,000/oz, currently at $3,331.
