Key things for investors to consider
When markets hit turbulence, investors often turn to gold and gold-related investments—such as gold mining stocks; mutual funds or exchange-traded funds (ETFs) made up of gold-related businesses; or gold exchange-traded funds. This is based on the assumption that gold's price will hold steady or climb even as the value of other investments drop.
The price of gold reached a new high during the 2008 financial crisis and continued to climb over following years.
The price of gold is nearly double today what it was a decade ago, but in between, the price has seen major peaks and valleys. Gold prices reached a record high above $1,800 per ounce in 2011, but more recently have hovered around $1,200.
Investing directly in physical precious metals such as gold can be difficult and costly, which in turn can make it harder for you to diversify your portfolio.
Mutual funds and ETFs can provide a cost-effective way to diversify among different types of physical precious metals and companies involved in mining and other services associated with the precious metals business. It’s important to note, however, that the performance of such funds doesn’t always track that of the physical commodity. That said, all securities which offer exposure to commodities, such as precious metals, carry the risk that you could lose some or all of your investment.
It is important to speak to your financial adviser to obtain the latest information regarding the commodity price cycle and whether it presents an opportunity for you to invest, divest, or hold precious metal investments.
Please contact your Investment Adviser at DJ Carmichael, or contact us and we can introduce you to an Adviser.
Tel: (08) 9263 5351
This information is general advice only, which has been prepared without taking account of your objectives, financial situation or needs; and because of that, you should, before acting on the advice, consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs.