I don't have any confidence in banks to shatter, which is why I offloaded my bank shares a long time ago and have never been tempted to buy any more. Let us not forget that during the banking crisis, all those savers, councils and institutions which had been sold dodgy paper suddenly found that their savings were worthless. It's not new to have your savings plundered. Pete makes a good point: what is the alternative? Why should there be a bank depositor win-only situation? If you want no-risk money saving, buy government debt from somewhere like Switzerland or Luxembourg. You'll be paid peanuts on it, but at least your chances of losing your cash are minimal. Would you really put all your savings in a Cypriot bank? You must be bonkers. Of course the Mail on Sunday has come out with a headline that seems to suggest the EU is targeting the savings of blameless retired Brits. It's not quite as simple as that, is it? TBH, if I was living in a meltdown economy and someone said you can keep 93% of your savings, I don't think I'd be that unhappy, especially if it was explained to me that otherwise my bank would go to the wall and I'd lose all of them. Also interesting to reconsider the bailout of RBS a few years ago (and others). Would people really have stood for seeing the banks go bankrupt and them losing all their savings, if this much fuss is made about a few retirees abroad losing 7%? Then why continue to bleat about it? People want to have their Battenburg and nosh all of it.
My parents are living in spain, with a reasonable nest egg stored away. After consultation with my brother, who is highly intelligent and I m fortunate to have a very close relationship with, we have advised them to move a chunk of money into a lower yielding, although more secure UK account. The transfer fees are minimal, however the next stop along on the EU gravy train after Greece is bound to be Portugal, with Spain following in quick succession. In the current financial market, and given to global situation I think its getting very close to the point in time where it may be worth buying gold, rather than maintaining a muscular bank balance. With my impending windfall I may also be looking into this option. As soon as interest rates drop below inflation a robust bank account is a foolish thing to have. Following my accident I sold some shares to keep myself afloat while on SSP, its a damned shame as the remaining shares have gone up about 40% in two months, but right now they look a safer bet than having that money tied up in a savings account.
Buying gold, eh? The price of gold can go down as well as up, like everything else. Just because it went up last year does not mean it will go up next year. You get no interest whatever on gold, it might get stolen, and you may incur some expense keeping it secure. If you take the view the gold price will go up in future and buy some, good luck with that - I hope your risk comes off.
As it happens I have a few bank shares, only worth peanuts, and as it happens they doubled in value last year. But a few years ago they lost 90% of their then value, so I'm neither celebrating nor mourning those gains or losses. These things happen.
I'm thinking of a comparatively small purchase, either coins (perhaps a dozen sovereigns - currently about £260 each) or a 100g bullion. (about £3480) Gold can of course go down as well as up, but so can every investment, be it property, stock or gold. Gold has long been a traditional safe haven for investors though as its the most secure investment out there. Logic dictates its also one of the lowest yielding as there tends to be a pretty solid risk / yield pattern to investing, otherwise everyone would sell high or medium risk shares and buy gold. As they say, TANSTAAFL..... (there ain't no such thing as a free lunch) -edit- the other benefit of gold bullion is that unlike a bank account or ISA its a lot more difficult to flitter it away, its quite easy to dip into a savings account, where as liquidating gold or stock assets is far slower.
A word about taxation, if I may. It may seem a trite point, but perhaps worth stating that governments & parliaments of all countries have powers to demand from citizens and residents financial contributions, based on any form of income, expenditure, gains, transfers, assets, properties or transactions. These powers are a small part of even more drastic and extensive powers. Decisions about what powers to exercise, what taxes to collect on what terms and at what percentages are political matters - indeed the main business of politics. If somebody chooses to apply emotive terms like "theft", "robbery" or "expropriation" to a tax they disapprove of, so be it; they can apply those terms to every kind of taxation if they want. This kind of rhetoric doesn't make any difference to the economic, political and legal situation though, and does nothing to explain the realities.
This is also a consideration with gold purchases. As Sovereigns are legal tender in the UK they are exempt from capital gains tax, and are 0% VAT rated.
depends on the long term goal of your investment, if its for a property purchase in 4 - 5 years time (as mine would be, or even further down the line, a retirement), loosing the ability to dip into it for a cheeky holiday or impulse purchase is an advantage.
But not at the top of the market. when a certain Gordon sold off vast UK stocks for circa $275 an ounce, THAT was the time to buy...and part the reason we are in such a mess. To many ill advised gambles with our money. As an aside, why not just take 10% from ALL bank accounts in the western world with deposits greater than £250k and use the money to settle debts. Well we know the answer, thats taking from people who can afford it.
Its not the first time a government has sold government assets at a knock down price to cover up a patchy economy.. Why do you think hatcher sold the council houses?
I agree to an extent, only difference is that the housing stock remains in the UK. Slightly less suicidal than selling gold ''reserves'' at an all time low. When its gone, its gone.
Financial meltdown would be horrendous and I don't think a small amount of physical gold would mitigate against this. Bear in mind that with gold 'investments' for each ounce of physical gold there are about 10 people who think they own it. The Spanish authorities have just passed a law requiring all residents in Spain, including foreign nationals, to declare all assets even when those assets are held abroad. The penalties for failing to do so include unlimited fines of up to 150% of the assets hidden. I wonder why they feel this is necessary?
Re gold: did you see that programme/item on the TV a couple of says ago about the firms about to start mining the sea bed at 4'000 metres down? You might not have, as I think it was on Swiss TV. Apparently huge reserves of gold and rare earth metals under the sea. The planet is 2/3 sea after all. Suppose they start to produce significant amounts of gold - what will that do to the price? No one - no one - has the panacea for investments, as to have it would mean being certain about the future. The future is by nature uncertain. With hindsight it's all a bit Watsonian : "But Holmes! It's all so absurdly simple!" Problem is, in the present, it isn't that simple. Here we are on a Ducati forum. I doubt anyone can be certain about the best Ducati to buy now to produce a good profit in 10 years time - if there is such a thing. And if you can, why aren't you doing it?
It was only a month or so ago, the dippy side of the coalition mooted the possibility of investigation and taxation of all UK residents' assets (jewellery, art etc etc)...... AL
