In our house discussions about BREXIT are banned these days. Mrs Norman thinks that the topic is like a faulty lightbulb … too much heat and not enough illumination … and she is right.
Besides, for most Brits it has also become deeply boring as we have quite frankly moved from 100% saturation on the topic … to beyond. Yet it remains a deeply important story.
Perhaps the Bank of England is, at least, correct in suggesting that there seems to be some complacency around the possible outcomes for a messy divorce. And is tempting to stray into politics from here … and remember, it is banned … but what does unite most Brits is the belief that the whole negotiation process has been very deeply mismanaged.
Getting back on message … you might think that with all that uncertainty, that physical gold sales here in the UK would be off the scale. Well it’s not.Here at Sharps Pixley we have had a stellar year and we shall have sold between 2 and 3 tonnes of gold from our modest bullion showroom before the year is out. That’s a roughly 100% increase year-on-year, and in a tough market. Yet the last two months have been our very worst. Gold remains deeply “unloved”.So, what could UK investors do to protect their savings against a further fall in sterling. Obvious really, buy gold.
Gold in GBP terms has risen 30% over the last 5 years, which is a little over 5% pa compounded (over the last 20 years we normally see a 10%+ increase pa compounded, so relatively lacklustre).
Since 2000 gold has outpaced the average UK property market by more than a factor of two (gold up 456% in GBP, property up by just 182% (Nationwide Index), while the FTSE is up a miserable 10% !) Gold has a tighter bid/offer spread (roughly one quarter for say a buy-to-let) and it is more liquid (5 to 7 minutes to sell gold, 5 to 7 months to sell a property). In our view gold remains the best kept secret in financial markets. No more so than here in the UK where we are just 0.3% of global demand.
In a get-rich-quick, instant-gratification, tweet-me world, owning physical gold might seem a little retro - but wise heads will tell you that ‘slow and steady wins the race’. With there being a distinct possibility that sterling is headed for a significant fall, owning gold as a UK investor remains possibly the best way to protect your wealth. A proper “lightbulb” moment ?
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