Not at all surprised by the 'expert' responses of these four financial advisors about gold: http://www.news.com.au/money/genera...-1226129457485?newscomautrack=news-newsfeed-6
What they all omitted was "gold doesn't pay a trailing commission, so we won't recommend it". Not the slightest hint of thought from any of them as to WHY gold has been appreciating in dollar terms.
Funny that one of them should be from an advisory company named Yellow Brick Road which is supposed to be a metaphor for the gold standard!
I'm doing my Adv. Dip in Financial Planning atm (looking at completing a Ba.Commerce next year) and this sort of pathetic blind-leading-the-blind thinking is what I am trying to avoid when I eventually enter the financial services industry. None of them even mentioned QE1 or 2, or that central banks in Thailand, Sth Korea, Mexico, etc + China, Russia et al all buying gold, or people like Peter Schiff and Mike Maloney. (On a side note in my textbooks there are five official asset classes: cash, fixed interest, property, aust shares & intl shares, in that order from least risky to most. Nowhere is there any mention of gold or silver or even oil and other commodities, they kinda get filed away under 'alternative assets' alongside holiday timeshare arrangements and timber plantations )
I actually agree. Gold isn't an investment - it's mobey and it's an insurance policy/portfolio stabilizer. That doesn't mean it's useless and you should't have any though!
Gold doesn't pay dividends blah blah not a productive asset blah blah... Do these people ever stop to wonder why gold is still traded as an asset? Yes, gold mining companies pay dividends but why do they mine gold in the first place if its such a crappy investment? Could it perhaps be due to a demand for gold? And what happens to the price of a scarce resource when there is a demand for it?
In the fallout from the recently concluded investigation into the financial services industry (thanks to the Storm Financial et al debacle) the Federal Government is about to implement strict rules on whom can call themselves a financial 'planner'. No more more 3-day courses anymore. I didn't get the comment about 'real estate not being just about land but buying into an growing community'. I mean, is there any way possible of heaping any more metaphors or consequence on top of the already teetering pile of critical importance that our real estate stock has become to the prosperity of this nation..is it at all possible?
A lot of people think that Gold is mostly used for accessories such as bracelets and industrial demand such as CPUs. The bullion bars which we've seen are not something that registers with these people. They have probably never seen one in their life and never will because they are wired to think that Gold is a 'rich man metal' and they can't afford it. Also they don't see Gold as an investment. Most people only know of a few investments and they are Property, Stocks/Shares/ASX related stuff, Term deposits and so on. I think these financial planners are genuinely stupid / blind when it comes to the investment of Gold, pity the fools.
From my experience, they haven't been particularly astute when it comes to Property, Stocks/Shares/ASX related stuff, Term deposits and so on either.
A recurring theme that i see with those peoples advice is the one of 'income stream'. If you cant live off it, its no good Looks like preserving your wealth has no place in financial planning anymore? if they think gold is too expensive, i'd like their opinion on what the fair price of gold should be
What they fail to mention is, Gold is an asset that: 1) Cannot be created at will (takes real labour / effort / energy to extract) 2) Can be stored indefinitely and will not rust 3) It is a store of purchasing power (holding real value) 4) This is the crux of it all, it is no ones liability and has zero counter party risk. 5) It is portable whilst being a tiny asset, you can leave any time taking it with you. I remember reading 100 oz gold bought a house. You can take 3 kilos of gold with you any time on a runner. Try doing the above with property, cash, shares, bonds, food. None of these will successfully satisfy all of the properties above. Every one of these asset classes they are pushing fails the above 5 points by at least 1 or more. Gold and to a degree silver are the only forms of money. But more so on gold, because of its portability. Slam
i love these articles, coz it means gold/silver is so far off from being in a bubble! got to love the sheeple that read this and then buy stocks like Myers =D "Nothing to see here people, keep moving along"
