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How To Invest in Gold: A Summary Gold Market Grid from 1929 to ... | How to invest in gold

<b>How To Invest in Gold</b>: A Summary Gold Market Grid from 1929 to <b>...</b> | How to invest in gold


<b>How To Invest in Gold</b>: A Summary Gold Market Grid from 1929 to <b>...</b>

Posted: 07 Aug 2014 04:15 PM PDT

So, how you find great deals on gold investment? We start with a little history.

Before buying, you would want to know the position of the gold market. One thing you can do to assess the gold market is to make a grid showing the gold market for a period of, let's say for example, 85 years. We then plot the elements that affect gold prices.

First off, the market moving up and down is subjected to two things: Supply and Demand.

Then with demand we need to focus on two things:

1. The investment market – This is investment demand, which means how much

investors, private investors, people like you and me are buying gold today. Are we buying or selling? This is the first criteria.

2. Central banks – These are the banks, like Bank Negara, across the world. Are the central banks bullish or bearish on gold?

watch the webinar below to find out more about, Where & How to find great deals of gold investment?

In this webinar you will learn:

- Gold & Silver Insiders-Report
- 5 Years of Gold Market Trend Report
- Gold Supply Falls in Big 4 Nations
- Four Steps to Find Gold Investment Deals

<b>How to invest in Gold</b> | Income Tax Slabs

Posted: 14 Jul 2014 05:22 PM PDT

How Do I Invest In Gold

Gold is an integral part of Indian life. And it plays a prominent role as an investment option. Over the years people have purchased gold, in form of Jewelry, coins and bars. Today's development of economy and trading options has introduced new ways to invest in gold. Currently there are 4 different ways in which you can invest in Gold.

So let's have a look at the different investment options in Gold and how they weigh against each other.
Investment In Gold  Option 1: Physical gold: Jewelry, Coins, Bars. Can be purchased from banks, branded jewelry stores or local jewelers.

Pro:

  1. No pre-requisite like Demat account/ Trading account required to buy gold
  2. Unlike Gold Mutual fund you don't need to fill out any forms/ submit documentation. Simply pop into a Gold store and buy what you like
  3. Can be purchased against Cash, no bank account required.
  4. Physical Gold can be held, felt and worn in form of jewelry, unlike most other investment options.
  5. If required it can be pawned to generate cash.

Cons:

  1. Banks charge premium is charged on gold bars and coins. Reselling them is difficult.
  2. Locker charges for storing the gold.
  3. Safety concern for the physical gold.
  4. It attracts LTT, @ 20%, and the indexation kicks in only after 3 years of holding the gold.
  5. It attracts wealth tax.

Cost Involved:

  1. Heavy losses in the form of wastage and making charges. This can vary from a minimum of 10 per cent to as high as 35 per cent for special and complex designs.
  2. Only outflow of cash for the maintenance of lockers
  3. Gold suffers capital gains tax as per the IT Act. So it is better to ask your jeweler for the bill. Indexation benefits can be used when calculating the capital gains of gold. So the tax payable will not be much.

Investment In Gold Option 2: E-Gold: This investment avenue is provided by 'National Spot Exchange'. Any broker who is affiliated to this exchange would be able to help you invest in E-Gold. E-Gold is very similar to what an ETF is, in the manner that you can trade (buy/sell) your E-Gold electronically easily. However what differentiates E-Gold from ETF is that; you can convert your E-Gold into physical Gold. In case of ETF you cannot do any such conversion, ETF can only be traded electronically.

How do I invest in E-Gold?

– You need to have a demat account with that broker who is affiliated to 'National Spot Exchange'. – Via this demat account you can buy E-Gold like you would buy a stock.

Cost Involved: – brokerage and transaction costs – stamp duty – demat account charges – cost of converting the units into physical gold

Pros:

  1. No recurring charges like expense ratio of mutual funds, ETFs involved. This makes it a much cheaper form of investment over the others
  2. Units as small as 1 gram can be redeemed for physical gold.
  3. Greater price transparency.

Cons:

  1. Separate trading account and demat account needed for trading in e-gold.
  2. Not the best way to invest in terms of tax. It is treated as physical gold for taxation.
  3. The holding period for long-term capital gains is 3 years

Brokers affiliated with National Spot Exchange: -

  • Karvy Stock Broking Ltd.
  • Globe Capital Market Ltd.
  • Religare Securities Ltd.
  • Goldmine Stocks Pvt. Ltd.
  • IL & FS Securities Services Ltd.
  • Monarch Project and Finmarkets Ltd.
  • SAM Global Securities Ltd.
  • SSD Securities Private Ltd.
  • Stock Holding Corporation of India Ltd.
  • Zuari Investments Ltd.
  • LSE Securities Ltd.
  • Aditya Birla Money Ltd./ Apollo Sindhoori
  • Inda Infoline Ltd.
  • Master Capital Services Ltd.
  • Geojit BNP Paribas Financial Services Ltd.

Bottomline: If you are looking at very long-term then E-Gold is a good option to use. E-Gold has an easy ability to convert to physical gold, so it could be used if you want to take it out in physical gold.

Investment In Gold Option 3: Gold ETFs: Gold ETFs are units representing physical gold, which may be in paper (in case you do not own a demat account) or dematerialized form. These units are traded on the exchange like a single stock of any company

Pros:

  1. Units are backed by corresponding units of physical gold of 0.995 purity which are kept in secured vaults.
  2. Long term capital gains tax of 10% without indexation or 20% with indexation kicks in after 1 year. No wealth tax applies.
  3. Price approximately equal to one gram of Gold
  4. No wealth Tax
  5. No STT
  6. No storage issue and fear of threat
  7. Near wholesale price for buying and selling even one unit compared to huge premium for buying small amounts and physical gold.
  8. Listed and traded on the NSE with a minimum lot size of 1
  9. Dividend option in the gold ETFs

Cons:

  1. Trading account and demat account needed for buying ETFs.
  2. ETF cannot be converted into Physical gold

Cost Involved:

– Broker Charges

Bottomline: If you are looking at short term investment then gold ETF is the best option.

Investment In Gold Option 4: Gold mutual fund: Are mutual funds that pursue capital appreciation by investing primarily in equity securities of companies engaged in the mining, distribution, or processing of gold and other precious metals. Gold mutual funds are viewed as "specialty funds" because of their portfolio's focus on gold mining stocks, though some do own small amounts of gold bullion. Most gold mutual fund portfolios concentrate on gold mining stocks, but some have significant exposure to silver, platinum, and base metal mining stocks as well.

Pros

  1. Through Systematic Investment Plan (SIP) of gold mutual funds one can affordably have disciplined investment in gold. One can invest as little as Rs 100 every month in gold funds.
  2. Long term capital gains tax of 10% without indexation until 1 year of holding. And after 1 year LTT of 20% with indexation applies.
  3. No wealth tax applies.
  4. No Demat account is required for investing in mutual fund.
  5. Safer than Gold ETF, as the mutual fund diversifies its investment into different Gold related companies, thus spreading out the risk over a number of companies and thus stabilizing the returns substantially.
  6. Mutual funds can be bought, sold, or exchanged on any day the stock markets are open for business.
  7. Gold mutual funds are professionally managed by qualified and experienced fund managers

Cons

  1. Expense ratio is higher than in gold ETFs. As mutual funds are actively managed by the fund manager, who ensures that the fund maximizes its returns while minimizing the risk.
  2. Returns slightly lower than that of gold ETFs, as the fund manager's skills influence the fund's performance and returns.

If you own a demat account go in for Gold ETF, they are the safe and provide best returns. If you are not fully comfortable with the paper format of Gold, you can go in for E-Gold; which you can convert in physical gold as need be. If you do not have a demat account and find trading to be a trouble, Gold mutual fund are the best bet for you. They are managed be professionals so you can rest assured you investment is in safe hands. And finally if you are looking to buy jewelry only then invest in physical gold. Gold coins and bars are not the best of the investment avenues.

3 reasons to <b>invest in Gold</b> - Alasdair Macleod | GoldSwitzerland

Posted: 27 Aug 2014 07:00 AM PDT

"The Matterhorn London Interviews – Aug 2014: Alasdair Macleod"

"The three biggest reasons to invest in gold"

Video interview:
In this 2nd of a series of London interviews that Lars Schall conducted for Matterhorn Asset Management this summer, Lars has a City of London streetside conversation with Alasdair Macleod right outside the Dutch reform Church in Austin Friars near the Bank of England. Together they talked about, inter alia: the challenges for The London Bullion Market Association (LBMA); China's appetite for gold; the Shanghai Cooperation Organization as THE future player in the gold market; and the problems related to Germany's gold at the New York Fed.

Alasdair Macleod started his career as a stockbroker in 1970 on the London Stock Exchange, and learned through experience about things as diverse as mining shares and general economics. Within nine years Macleod had risen to become a senior partner at his firm. He subsequently held positions at director level in investment management, fund management and banking. For most of his 40 years in the finance industry, Macleod has been de-mystifying macro-economic events for his investing clients. The accumulation of this experience has convinced him that unsound monetary policies are the most destructive weapons that governments can use against the people. Accordingly, his mission is to educate and inform the public, in layman's terms, what governments do with money and how to protect themselves from the consequences. He does just that as the chief editor of the FinanceAndEconimics.org blog, as the Director of Research at GoldMoney and in media appearances around the globe.

London video series Aug 2014 [1]: Ambrose Evans-Pritchard

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The Great US Retirement Asset Bubble vs Physical <b>Gold Investment</b>

Posted: 02 Sep 2014 12:45 PM PDT

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Americans are more deluded than ever as the total value of the U.S. Retirement Market hits a new record.  According to the data released by the ICI – Investment Company Institute, total U.S. Retirement Assets in first quarter of 2014 are valued at a stunning $23 trillion, up from $22.7 trillion in Q4 2013.

Not only are U.S. Retirement Assets reaching new record highs, so is the sentiment by its member participants.  This report put out by the ICI, "Our Strong Retirement System — An American Success Story" stated:

Americans Report High Levels of Confidence in the 401(k) System

Americans have a very favorable view of the employer-sponsored 401(k) and other DC plans.  Such confidence is a powerful indicator of the value American workers and retirees place on the 401(k) system.

In a survey of 4,000 households conducted for ICI in the winter of 2012/2013, 63% of respondents said that they have a "very" or "somewhat" favorable impression of 401(k) and similar retirement accounts (see figure below).38 That support rose to 76% among households that held a DC plan account or an IRA.39 Americans have expressed similarly positive views in surveys conducted since late 2008, despite the stock market decline from late 2007 to early 2009.

It's nice to know that Americans have a HIGH LEVEL of confidence in their 401K plans.  Thus, it makes perfect sense that they continue to invest their hard-earned fiat money into a system that promises them GOLDEN RETURNS.  Unfortunately, Americans have no idea whatsoever that they are throwing good fiat money (if there is such a thing) into one of the GREATEST PONZI SCHEMES in history.

I assumed that it was mostly the middle-aged and older Americans that continued to invest in the retirement system.  Why wouldn't they?  They see retirement not too far around the corner so it only makes sense to continue contributing.

However, Main Stream Media has also bamboozled the younger folks, as they too have taken the Paper Retirement Asset System….. HOOK, LINE and SINKER.  Here is another wonderful piece of propaganda from the same report linked above:

Importantly, enthusiasm for 401(k) plans appears to be high among younger workers. For working-age Generation Y or Millennials (those born from 1979 to 1991) there is a very high degree of confidence and participation in the 401(k) system. According to a June 2012 analysis by Fidelity Investments, 83% of Generation Y participants made recent contributions to a 401(k) plan,46 higher than people of a similar age a decade earlier.

We must remember, in order to keep a PONZI SCHEME going, you always need a new group of POOR UNWORTHY SLOBS to help payout the proceeds for those who have retired.  Those who do the best in any Ponzi Scheme are those who came in first.

Let's take a look at the nice chart the folks at the Investment Company Institute put together.  Here we can see the growth in value of the U.S. Retirement Market.

 Total U.S. Retirement Market

Ever since 2008, the Federal Reserve and U.S. Treasury have done a wonderful job propping up the broader stock and bond markets — the two largest segments holding up the U.S. Retirement System.  After the collapse of the Housing & Investment Banking Markets, total U.S. retirement assets fell to $14.2 trillion in 2008, down 21% from the $18 trillion level in the prior year.

Then as the Fed continued with its easy money policy (QE to infinity), the total value of U.S. retirement assets increased steadily to record level shown in the first quarter of 2014.

The U.S. Retirement Market nearly doubled from $11.6 trillion in 2000, to the $23 trillion level today… a growth of $11.4 trillion.  Now, let's compare that to the total current value of U.S. physical gold investments since 2000.

U.S. Gold Investment vs Growth of Retirement Assets

According to the data put out by the World Gold Council, the net total retail physical gold investment in the U.S. was 656 metric tons since 2001.  If we apply an average price of gold at $1,300 an ounce (when the chart was made), the total value would be $27.4 billion.

Just look at it.. it represents a mere smudge on the chart.

I am not including the rise of investment in Gold ETF's such as the GLD, due to the realization that investors do not own real gold… just paper claims on gold.  And we have no idea how many claims were put on each ounce of gold that the GLD holds, if it in fact has the physical gold in storage.

This chart says it all.  It's no wonder the Captains at the Fed and U.S. Govt steering the U.S.A. Titanic make damn sure that Americans continue believing they have invested in wise assets.  And it's not just the retirement market that needs to be propped up.

Here is another chart from the fine folks at the ICI.  This is their Retirement Resource Pyramid.

Retirement Resource Pyramid

You will notice my added annotations as I guarantee they would not be included in their original chart.  The base of the pyramid is Social Security.  How many precious metal investors actually believe they are going to receive their social security?  I am talking about those 55 or less.

Most of us realize the U.S. Social Security System is a typical Ponzi Scheme because it didn't put away the surpluses over the past several decades for a rainy day.  It used the surpluses to fill in the budget deficits… and continues to do so.

The next smaller section of the retirement pyramid is Homeownership.  How many Americans are still underwater in the homes they purchased before 2007?  And how many will be underwater when the housing market collapses again, forcing values below the lows seen in 2009??

What kind of retirement value will housing be when the U.S. Financial system finally cracks?  We also must remember, in a Peak Oil scenario, owning a typical suburban home (depending on location) may turn out to be more of a LIABILITY than an ASSET (even after most of the value disintegrated during the market collapse).

Then we come to the Employee-Sponsored Retirement Plans & IRA's.  These are the next two sections of the chart… totaling $23 trillion.  Of course these supposed assets will succumb to the same forces of gravity as will the Social Security system and home values when reality finally returns into the markets.

Again, the values of these retirement assets are based on the Fed and U.S. Treasury continued propping up of the broader stock and bond markets.  Once the U.S. Dollar-Treasury-Stock Market Dam finally bursts, it will take down the values of all these so-called paper assets.

However, the opposite will occur with the value of  physical gold investment.  As we can see from the chart above showing the incredibly insignificant $27.4 billion (since 2000), very few Americans understand the WEALTH PROTECTING abilities of owning gold and silver.

Some analysts believe the value of gold and silver will fall during the collapse of the stock and bond markets, due to their superficial perceptions of DEFLATION.  While it's true that asset values will implode during this time, I believe the over-leveraged paper claims on gold and silver will disintegrate as the value of the physical metal will skyrocket.

Please check back for more articles and updates at the SRSrocco Report.  You can also follow us at Twitter below:

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