Gold vs super since covid

A

Ag bullet

Well-Known Member
Just wondering if anyone can tell me the performance of $20k of gold bought with super money that the govt let people have during covid vs if it was left in super.
I have a friend that wants to know.
 
Assuming you made the purchases in end December 2020, you'd be better off in gold by approximately 7.5%

Rough calcs (all in AUD)
1. Gold was $2589 giving you 7.725 oz, meaning at todays spot it would be worth $25,198*
2. A200 (assuming 100% super) was 110.87 meaning 180 units, at todays current trading price it would be worth $23,427** ***

* don't recall the rules, but assume you'd have had some tax implications to extract the $20k from super
** less as your super would have had fees charged
*** if you'd managed to add to the super prior December the return would have been much better

Which option did the friend choose?
 
Ag bullet said:
Just wondering if anyone can tell me the performance of $20k of gold bought with super money that the govt let people have during covid vs if it was left in super.
I have a friend that wants to know.
Click to expand...

A SMSF can purchase gold. It can also purchase global equities, property, cash and anything that qualifies as investment grade. This question is like saying what is longer, rope or string.

The advantage of superannuation is tax. Let's assume tax is not relevant in the comparison.

Therefore, making some assumptions, the question is actually, compare each of these asset classes:
1. Gold
2. Equities ( https://investor.vanguard.com/investment-products/etfs/profile/vt - VT is probably a reasonable proxy)
3. Property - VAP could be a proxy
4. Cash

A few google searches will answer the question. Precious metals provide no income, unlike most other investments, but they are a hedge in certain situations and have a negative correlation with other assets, and therefore can be considered as a part of a balanced portfolio.
 
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Approximately 75% increase for the AUD.
Im taking this from the bottom of 2020 at $71 aud per gram.

It’s a great result in anyones book, especially for those that don’t like to gamble on the sharemarket and crypto.
The beauty is the increase in value is tax free and no cost to hold.
Now if you consider inflation, bank deposit interest even super fund returns, gold has out performed by a country mile.
I’m predicting a 100% plus increase since Covid by mid 2025
 
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betterinvestmentthanshare said:
The beauty is the increase in value is tax free and no cost to hold.
Click to expand...

If you sell gold at a higher price than when you purchased it you will be liable for CGT. The cost to hold gold when you don't pay storage costs is referred to as an "opportunity cost" ie the profit/income forgone from holding one asset in preference to another asset that may provide an income stream or a greater profit.
 
Ag bullet said:
What about CLR (Capital Loss Refund) ?
Or is the Govt only a silent 3rd party in a transaction where you make money?
Click to expand...

Net capital losses can be offset against capital gains. There are certain restrictions eg losses on collectibles can only be offset against losses on collectibles.

I made my comment in order to caution members when making comments around tax compliance. Comments posted on this forum have been used in courts in the past.*

* smiles and waves at the ATO web scraper. :D
 
OT, assuming a 5% annual return in a balanced portfolio (5% annual return is industry average for balanced funds) the SMSF portfolio would now be worth about $25000, gold about $30000. Depends upon the portfolio selected and fees and charges.

For a visual, the XJO v Gold in AUD, gold is the red line:

XJO_2024-10-23_07-25-45.png

Anyone having done it would probably be sleeping OK now, some 4 years after mind you.
 
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So is having said $20k of gold go to ATH better than the current superannuation stock market losses?

Asking for same friend.
 
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