Investing in gold
Yes, that’s right - gold! We have been adding gold to our clients’ portfolios since 2004. We help investors own gold in a number of different ways including in the safest vaults in the world. Holding some gold protects you from the banking system and offsets losses in other asset values from big shocks caused by unexpected deflationary events like in 2008 or from the kind of runaway inflation we experienced in the 70s. If you are looking to preserve your wealth, gold as an insurance really is the way to go!
Wealth diversification is the smart choice
Gold is a finite resource, which makes it a timeless asset. What’s more, the price of gold has been steadily accumulating over time. For the last 15 years gold has accumulated severalfold against all paper currencies. Gold is never cheap, but it is a valid form of currency and robust in the face of economic crises. Moreover, when the cost of living rises, the price of gold tends to rise too.
The buying of physical gold as a form of long-term investment has become increasingly popular in recent years. We believe this is partly due to a lack of confidence in governments, banks and the frequent erosion of major currencies, but it is also because gold is increasing in rarity. The total level of gold ever mined in human history is about 23 cubic metres, vastly smaller than the total amount of debt created by the global economy repayable in paper currencies and estimated at about €250 trillion.
The benefits of investing in gold
Gold responds strongly to an outbreak of high inflation.
Gold acts as a store of value when economies go into reverse and shrink, leading to major falls in risk assets like property and shares.
Holding gold equal to 10% or so of your liquid assets in cash, An Post, Government Bonds, etc., is a great hedge against their erosion from inflation or default by the provider.
There’s a reason gold has been the ultimate store of wealth for millennia, it survives the falls of empires and always is convertible into currency.
At times of great uncertainty, gold is a sleep-at-night asset to own because if everything else is falling gold will be going in the opposite direction.
Our take on gold
Clients have been shoring up their balance sheets through us with gold since 2004, when it was trading under $400 per ounce. It is three times the price today, but still valuable. It can be held privately, by your company or through your pension fund. We think that gold, in the current global climate where debt has jumped 50% since the global financial crisis, has a pivotal role to play in diversification.
Gold on a balance sheet lowers the overall level of risk. Like any commodity or precious metal, it can also fall in price, but once you understand gold as a hedge or insurance, it becomes a welcome ally to have to protect you from dramatic falls in the major asset classes and from bank failures and contagions.
How does it work?
Anyone can own gold. However, it is not advisable to store it at home. We can ensure that your gold is stored outside the EU, for example in Switzerland. It is allocated to you, with no intermediaries, and accessible for selling through a gold broker when needed. Or you could opt for Gold Certificates issued by main mints like the Perth Mint. Certain unitised funds invest in gold exchange-traded funds that are backed by physical gold.
Physical gold allocated to you, or gold certificates, are not products regulated by The Central Bank of Ireland. They do not come under the Investor Compensation Scheme, nor are they covered by the Financial Services Ombudsman Scheme.
If you are unsure how much gold you should be buying, we are happy to discuss your financial situation and examine your current liquid assets to determine what might be a suitable investment for you.