i understand the plan, to invest in precious metals to hedge against a potential currency devaluation. but i don't understand a couple of things - can someone help. genuine questions:
- if you don't physically hold the metal, how are you protected against a potential currency devaluation? the value of your gold may hold, but how is that of use to you if you don't physically hold it? would i be right to think the only option open to you is to 'cash it in', for a devalued currency?
- if you do physically hold it, then what? obviously you can't pay asda with it.
is the general idea to just keep hold of it, until things recover in some way?
Morning Adumass. It is a subject that I have been looking into for a while.
Our finances have been organised such that all our 'assets' are in our home and in cash, we have modest incomes from pensions, the cash is there to be used and make our retirement more comfortable. Family and other obligations have already been met.
That cash makes the difference between us 'living comfortably' and 'just living'. Massive devaluation of that 'cash' is what I find troubling, so the question is what to do with it.
First thought was to buy another property as a rental, a good idea as the rental income can be be adjusted in line with inflation, but the government are now protecting tenants who can't or won't pay their rent, lots of hassle that I would rather avoid.
So the next thought is precious metal, gold or silver, usually a good bet in troubled financial times. You can buy gold 'on paper' where the metal is held for you and subject to the usual 'management' and storage fees. Buying and selling is subject to the usual buy/sell margin, making it a longer term investment. Since you do not physically hold the metal, it is not totally under your control.
Buying the actual metal and having it in your possession is more secure but in order to 'spend' it, it will need to be converted into cash, this assumes that there will be a structure, a market in place so you can do that, but you need a working economy of sorts to make that work. This would work fine if that was the case, as inflation reduces the value of cash, gold will rise in value so you will get more when you sell it.