Protecting your portfolio with physical gold could be the ultimate insurance for turbulent times.
Birmingham, UK (PRWEB UK) 10 November 2011
In times of economic uncertainty and instability, physical gold offers about as much certainty as you can get.
“This month we’re seeing unprecedented demand for gold bullion following the continual stream of negative news stories about the Eurozone” says Rob Halliday-Stein, Manager Director of Bullion by Post.
With the unsettled situations in Greece and now Italy seemingly at the heart of the recent demand, people are quickly losing confidence in the value of their banks and flocking to alternative ways of preserving and protecting their wealth.
For private investors it poses the oldest question in the world – where is their money really safe? And growing numbers are choosing the oldest answer: physical gold.
“In Germany and Austria, where economic collapse and hyper-inflation happened within living memory, holding gold bars and gold coins is common, and it’s always been seen as a safe haven for wealth in India,” says Halliday-Stein.
“We’re offering investors the ultimate insurance. It gives people physical control and ownership over part of their wealth. It’s quite different from handing over money to a fund manager – or even, these days, leaving it all in a bank account.”
The price of gold tends to rise as investors in other markets get the jitters. “If you visit the Bullion by Post website – http://www.bullionbypost.co.uk – you can see that the gold price began rising sharply in August 2007, just as news of the banking crisis started to break. It’s more than doubled in the last three years, and more than trebled in the last five.”
As the buying power of savings is eroded by low interest rates and high inflation, and currencies are devalued by repeated rounds of ‘quantitative easing’, owning physical gold bullion may be a way of preserving the value of your money, says Halliday-Stein.
However, this does not necessarily mean that physical gold is a good speculative investment. Anyone wishing to speculate on gold can consider exchange-traded funds (ETFs) or contracts for difference (CFDs) which track the price of gold. But this kind of ‘paper gold’ is of no value if the fund owner goes bust or the banking system fails. Ultimate security comes from having a gold bar or two, or a purse of sovereigns, in your bank deposit box or under the bed.
Protecting your portfolio with physical gold could be the ultimate insurance for turbulent times. “It makes sense to hold at least 5-10% of your liquid wealth in physical gold for the long-term. It performs a very useful function as an asset of last resort as part of a balanced portfolio”, says Halliday-Stein.
BullionbyPost’s typical customers are not billionaires, but small to medium investors with savings and can range from owners of businesses to modestly wealthy retirees.
“For most people 100g gold bars, costing around £3,700 - are the best investment,” says Halliday-Stein. “Even if you wanted to buy several kilos we would recommend 100g bars. The price is slightly higher than kilo bars but it’s much more flexible when you sell them.”
For smaller units, gold coins are popular, with a sovereign costing around £270. The premium – the price you pay above the global ‘spot’ price of gold – is a few per cent higher, but because they are British legal tender, gold sovereigns and the larger gold Britannia coins are exempt from capital gains tax, making them very attractive to wealthy investors.
“Don’t think, ‘I’m not rich enough to buy gold so I’ll buy silver’,” says Halliday-Stein. “In uncertain times, gold offers about as much certainty as you can get.”
Bullion by Post buys gold back at 98% of the global spot price but, of course, buyers are free to sell it anywhere. Movement of gold is unrestricted in the EU and to many other countries.
Based in the Jewellery Quarter of Birmingham, Bullion by Post offers free, fully insured, next-day delivery as standard on its full range of gold bullion. The company is a Royal Mint authorised distributor and only sells London Bullion Market Association-approved bars. View the latest gold price now.
If you are interested in physical gold bullion investment, visit the Bullion by Post website: http://www.bullionbypost.co.uk or call us on 0121 554 9914.