With the financial world as we know it crumbling all around us, it is difficult to know where to put your money to preserve its value and secure your wealth and future.
Gold has always been the obvious investment in unstable times, but the price of gold fell 20% at one point in September while the stock markets also tumbled. Does this signal the end of gold’s meteoric rise or does it represent a fantastic buying opportunity?
Here are the reasons why the time is right to buy gold now
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- Despite its volatility in September, gold still ended the 3rd quarter up 11% – far outperforming any other asset class yet again
- Gold fell due to investors selling their gold holdings to pay for losses in other assets like equities and bonds. It has since recovered some of that lost ground
- The fundamental issues in the global economy which have pushed gold upwards have intensified with the Euro currency on the verge of collapse and several countries about to default on their debts
- Inflation is still rising due to increasing commodity prices, meaning cash in the bank loses value. Gold protects against the effects of high inflation
- There remains a distinct lack of gold supply. There have been no major discoveries in the past 5 years and demand for tax free gold coins far outstrips supply
So what can gold do for you?
Owning gold means you have portfolio insurance against any catastrophes threatening your investments. If there is a terror attack, currency collapse, escalating Government debt, high inflation or record unemployment – gold tends to increase in value as a safe haven asset.
Reduce your tax bills!
You could achieve a 40% discount off the gold price through tax relief whilst also protecting your profits from tax by purchasing gold bullion as part of your Self Invested Personal Pension (SIPP). Investing in certain UK gold coins is VAT exempt and Capital Gains Tax (CGT) free, a great opportunity to diversify AND reduce your Inland Revenue exposure.
How much should be invested and for how long?
Experts agree that to achieve a diversified portfolio, 10-30% of your liquid assets should be held in gold. This should ideally be held for a minimum of 3-5 years plus, but the great thing about gold is that it’s incredibly liquid and easy to sell at any time.