Disclaimer: The advice shown below is intended to be informational only and not to be considered professional financial advice. If you are seeking financial advice, always do so with a qualified financial professional.
Morris and Watson aims to provide as much information as possible to gold and silver investors. Many investors ask for tips for successfully investing in gold and silver or how to invest in gold and silver. Here are some helpful tips supplied by Adam Van Sambeek, Treasury Manager at Morris and Watson, Auckland. Adam has over 27 years experience in Financial Markets and Commodity trading.
After the global financial crisis of 2008 and the resulting collapse of a number investment institutions, many investors are taking a greater control of their own financial future. This was further shown with the cooling of markets during the COVID-19 pandemic, which has seen gold reach record highs. Many investors have turned to buying bullion due to its tangible attraction (an investment product you can physically see and hold). Below are some points that a bullion investor should consider when investing in bullion.
Here are our tips:
When is the best time to invest? It is always difficult to determine if now is the right time to invest. The fact is that gold prices have risen for each of the last ten years without fail, and that expectations are this will continue. This should provide some comfort that you are following a strong well established trend. Ultimately, the choice depends on your read of economic markets, and your intention in investing.
Remember your investment objective. Set your objectives (short and long term), make the appropriate investment selections and stick with your plan. Do not abandon your strategy on daily market changes.
Do not over commit. Only invest as much as you can afford. It may be better to invest smaller amounts spread out over a time, with the view to build up a portfolio over a longer time period. Dollar cost averaging will ensure you do not over commit based on a specific price.
Buying Gold or Silver is only half of the investment equation: When buying a US dollar denominated commodities such as gold or silver, it is important to be aware of currency risk. If you are holding gold or silver, you essentially have a long US dollar exposure. The relationship between the US dollar and AU dollar / NZ dollar is therefore important when calculating the value of your investment. Seek advice on how to eliminate currency risk.
Remember the Golden Rule: He who holds gold makes the rules. After the lessons of 2008s GFC and the COVID-19 pandemic, investors are wary of counterparty and market risks. There is only one market in gold and silver. It is safe to be holding physical gold and silver rather than worthless paper certificates.
Always buy and sell through a respected, reputable dealer. Going directly to a refiner can give you piece of mind on the quality and purity and sometimes it means you are getting a better price.
Aim to hold 10-15% of your investment portfolio in precious metals. This increases the degree of diversification and protects your portfolio against fluctuations in value of any one asset type.
Buying physical gold can present storage and insurance problems. However, small ingots or coins are portable and easily stored. Given that they are a physical asset they can provide some comfort during uncertain times.
Sit back, relax and enjoy your investment. It is a long term investment so do not fret the day to day movements. You are investing in tangible wealth, the stuff of gods, immortality, and wealth itself.
Bullion is an imperishable investment. Whereas a business can go under and shareholders could risk losing everything. You do not have that worry with gold and silver. An ounce of gold will always be an ounce of gold. There are many different risky investments that people make because they crave quick returns in a short period and end up with nothing to show for it.
Click here to learn how about the bullion buying and selling process with Morris and Watson.
