How I Am Dealing With Gold Investment Moving Forward

-

Back in March 2024, I wrote in a post that I bought an 1 oz gold bullion bar from BullionStar, and got a free 1 oz Canadian Silver Maple Leaf bullion coin.  I also decided to include gold in my investment portfolio for the long term, which meant that I will buy 1 oz of gold yearly starting from 2024.  My intention for doing this is because with all the Quantitative Easing in both the east and the west, fiat may be losing their value in the long run and that makes gold investment more appealing than before (sorry, I am too timid for crypto).  

Today, I am revisiting this topic as a record for myself, because year to date, the price of gold has continuously hit new all time high, and I probably need to do some logical thinking on what is going to be my next move.  To me, gold is more of a preservation tool rather than earnings tool, because I know that gold does not distribute any dividends, does not generate any earnings.  Its value is simply derived from demand and supply, and also the corresponding strength of the US Dollar.  So when I share my post in Seedly's Facebook Page back in March, I do not understand why I get "flamed".  The individual commented "All time high liao then start to put gold into portfolio? Lol.  Retail mindset always get burnt".  I do not understand why I get this comment as I was not showing off my gains from gold or anything, and in the first place, I just bought 1 oz of bullion gold at that time, which is not a meaningful amount in the grand scheme of things.  Furthermore, my intention at that time was to buy 1 oz of bullion gold every year, and keep it as a form of hedge in the long term (original intention is probably around 20 years).  

Fast-forward to today, gold price has reached another all time high.  As of 1st October 2024, the price of gold is around SGD 3388.50 per ounce, which is about 22% higher than my purchase price back in February!  And as of 10th October 2024, it is at another high of SGD 3,419.50 per ounce!  So to the commenter, I suppose I get the last laugh (just kidding).

The purpose of this post is not to get back at the individual who posted this comment.  I am not offended or anything, because short term profiting from gold was not my original intent.  So whether it jumps 20% or drops 20%, I am not going to sell it.  The intention of this post is to serve as a record to tell myself what I think I should do moving forward.  As mentioned, my original intent is to buy 1 oz of gold yearly, possibly for the next 20 years.  However from a logical standpoint, if the price propels to unbelievable levels, then probably I should pause, and direct the cash towards other income producing assets like growing my dividend portfolio.

As such, for my personal consideration and actions moving forward, I think at the start of next year, I will only proceed to buy another 1 oz of gold bar if the price of gold retreats to below SGD 3,300 per ounce.  If the price remains above SGD 3,300 per ounce, I will set aside this amount of cash in a high yield savings account and will only buy the gold when the price retreats.  If the price of gold continues to appreciate further into 2026, I will re-evaluate the circumstances at that point in time to see what I should do moving forward.  Barista FIRE, here I come...!

Comments

  1. SS10 October 2024 at 18:33

    Hello BFIRE, everybody has their own view on investments and most of the time, everybody thinks he/she is right. This is normal and seen in a healthy context, it helps to provide diversity of thought, and we can all gain from different perspectives.

    Personally, I don't invest in gold. It's not that I dislike value preservation, but I feel my limited capital can be better utilized elsewhere. Cheers!

    ReplyDelete
    Replies
    1. BFIRE11 October 2024 at 02:23

      Hi SS,
      Yup sure, I understand, and definitely respect the fact that everyone has their own perspectives on investments. However, I do not see the need to talk down on others. But anyway, this is not a vengeful post, so my objective is never to get back at anyone.
      To be frank, the fact that gold does not produce income nor growth is the main reason for my hesitation till this year. However, I just think that maybe it will be good to have a very small percentage in it anyway. In fact, if the prices continue to rise further, I may change course and sell away my 1 bullion rather than buy. See how the situation goes when the time comes. Thank you for reading! Cheers!

      Delete

Post a Comment

Popular posts from this blog

My First Trip To Japan Together With My Mum!

-
Image
This is my first trip travelling out of ASEAN region, where I have to plan every bit of the itinerary myself.  For previous family trips to Sydney and Perth, I am generally tagging along, being a follower.  However this time, it is going to be a duo trip with just my mum and myself, which I am both looking forward to, while at the same time worried about how things will turn out there and then.  Nonetheless, the decision has been made by late last year, and I booked the flights for 2, flying with Scoot to Kansai Airport for our 9 days 8 nights trip.  Feels good that a goal set early this year is materialized! Without further ado, I will share the travel journey below: Day 1 Arrived at Kansai Airport in the afternoon, and we grabbed a quick snack at the famous 551 Horai outlet.  Then after much complications with the Haruka Limited Express, we are finally able to board the Hello Kitty's train direct to Kyoto!   Haruka Limited Express We reached Hearton Hot...
Read more

Incorporating The Idea of Safe Withdrawal Rate to Living Off Dividend Income

-
Image
Recently in a Telegram group, I come across a debate between Kyith from Investment Moats and a reader, where the reader claims that as long as his portfolio is made up dividend stocks with good dividend growth through the years, he can just live off the dividends with the total capital left intact, while Kyith on the other hand, supports the idea of Safe Withdrawal Rate (SWR).  The reader claims that he would not want to sell any part of his portfolio, and just having to live off the dividends makes dividend investing superior to the withdrawal method, while Kyith explains that the reader's perspectives show a lack of understanding of how the SWR method actually works. After reading the long string of exchanges in the telegram group, I decided to pen this post.  Personally, I am definitely a supporter of the dividend investing group, and I also believe, and strives towards just living off dividend income upon FIRE.  From a dividend income investor perspective, the idealis...
Read more

Coping With The 32% Decline In Dividends

-
Image
As a dividend investor, I have been slowly accumulating shares in REITs and dividend shares to grow the annual dividend income since late 2017.  I am blessed and contented with the performance thus far, as the total dividends received annually continues to grow, despite hiccups along the way.  First major hiccup along the way is in 2020, where the strike of the pandemic and the circuit breaker hit businesses and some REITs in a huge way, resulting in cuts in dividends.  The second major hiccup recently will be in 2022 where the FED suddenly hike interest rates at rocket speed, and that created financial stress on REITs, which inevitably resulted in the drop in distributions by most REITs to varying degree.  Thankfully, with the slight diversification into other dividend-paying shares, they helped to mitigate the decline, and allowed my portfolio to experience dividend growth year-on-year. This year, on 23rd February 2024, Hong Leong Finance (HLF) reported their earni...
Read more