If I wanted to invest a few hundred pounds in gold coins, something I have no experience of, what would be the best way of doing this? I see that the Royal Mint sells gold sovereigns on-line but I'm not sure how competitive their prices are. Would I be better purchasing from a coin dealer / jeweller / bullion dealer? Is there any advantage in buying foreign coins such as krugerands, or does the value purely depend on the weight of gold in the coins?
Some gold coins are listed on financial markets. Choose one of these coins and you can easily find out the going rates for buying and selling. Unless you take care you could buy something that wont recoup its cost when you sell.
One ounce krugerands are probably the best since they attract the smallest premium.
Don't bother with 1/2, 1/4 or 1/10 oz coins.
Roland.
What about these securitized bullion shares (GBS) apparently tradeable on the Stock Exchange? Should be far less transaction costs involved, plus no insurance or physical storage problems!
Yep. Just bought some and it's all very straightforward.
FoFP
I considered gold shares but actually having the gold would also be beneficial in the event of a national disaster such as a major terrorist strike (which the government believes is inevitable) or war. Call me paranoid but electronic or paper records of ownership are likely to be useless in such a situation (I sometimes have problems connecting to my Comdirect nominee account at the moment and there aren't any airliners loaded with anthrax or radioactive waste crashing into the City of London yet).
If you are genuinely concerned about a large-scale terrorist attack or natural disaster or war, then stockpile non-perishable food and water, or buy a a farm and grow your own food and generate your own electricity. Gold can protect you from high inflation like in the
70's, but it is useless in an emergency. Read about post-war Europe. People were trading their wedding rings for a chicken, gold was worthless.Steve
In the scenario described, you'd need a gun first and foremost.
It doubtless went further than some postwar currencies (e.g. in Germany, Hungary, etc).
Which is probably why it could buy a chicken and they couldn't. That is, it was a form of money that was useful during a crisis and probably helped preserve wealth during and beyond the immediate crisis.
Roland.
Reminds me of an amusing incident which I read about in The Times many years ago.
A Soviet tank crew got lost in the middle of a forest in Germany while on manoeuvres. Luckily they found a tavern of some sort. And decided that libations were in order. Eventually after having exhausted their money, wedding rings were used for the purchase of more nourishment. And when the value of those had been exhausted, well, they faced a stark dilemma... well actually not a dilemma to them in any sense of the word, they simply decided to exchange their tank for many bottles of vodka and a few jars of pickled fish.
The whole episode was discovered when the tavern owner was found selling part of the tank as scrap metal; upon further investigation the tank crew were found sleeping it off somewhere in the forest.
As The Times reported, according to my memory... so not exact, 'no word was heard about the tank crew'.
Well given Russian like of vokda (which I share), I suspect the report is true. (see the last issue of Private Eye 'True Stories' or whatever it is called these days).
Axel
The other story was that a Russian commander swapped his tank for a Merc, and declared the tank as destroyed by fire.
Actually if you read again about immediate post war europe you will realise that Gold was the only currency that had any real value apart from Dollars and Pounds (which were very difficult for non USA or UK personnel to get).
In Germany in particular the whole system was reduced to barter of goods or Gold/Silver. Most of ex-occupied Europe was little better.
I would agree though that getting a Gun and a remote farm is an alternative way of doing it. You could always go to Nebraska and join one of the many survival cults in the USA :-)
Andy
You will need more than "a gun" over there to stop the neighbours nicking the beans :)
Before the war, a wedding ring might have bought 100 chickens, so gold was *not* a good investment, food would have been much better. I repeat, if you are worried, then buy essentials like tinned food, pasta, large containers of mineral water, heating oil, and trade them for gold after the apocalypse.
Steve
A wedding ring may not be the best example since it carries a high cost over the basic metal price in the first price (I think my wedding ring probably cost ten times the price of its weight in gold). My answer would be that gold would carry a lower risk cost that the cost of setting up a farm of 100 chickens, etc.
Imagine it, if you lived in a city you would have to move out to somewhere with farmland, the cost of selling/buying, the loss of income by doing so, the cost of equipment, livestock, feed, fuel storage and access, etc. This of course assumes you are preparing for a such a situation prior to a generally unforeseen disaster since the cost of setting up such a place afterwards would skyrocket.
If the disaster does not happen within a reasonable timescale (as some Y2K doomsters found to their cost), you are left with a farm and a lot of cash burn out. If you held gold, you just sell back into the market (possibly at a profit).
Of course, if one absolutely knows that disaster portends in their lifetime, then it would be a better approach. But as we know, life does not pan out that way. Ask the Y2K folk who ran to the hills. You assess the risk, assign probabilities and attempt to balance risk versus reward. Don't put all your eggs in one basket is good advice - not just in investment philosophy.
Regards,
Roland.
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