Physical Gold, Stocks and Retirement: Your Questions Answered

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2:06And these bonus podcasts, we talk about the best strategies for making the most of your money. I'm MarinSamsatWeb and with me, Senior Reporter and Money Distilled author John Stappet. Hi John. Hi, Mil. Mmm, don't be a lot of emails, which we love. We love emails, send us more emails. Today, we are digging into the show in books and pulling out some of the questions that listeners have sent us to discuss. Okay, so the first one is one that I know we both have firm answers to it. And it's about from someone who came from one of our friend shows in Edinburgh. And basically, he holds the majority of his gold through one of the physically-backed ETFs rather than owning it directly. Increasingly, he says you'd been wondering about the risks inherent in holding gold this way. And whether some of the rose risks potentially undermine the very reasons for owning gold in the first place. So he wants to know how comfortable we were the idea of physically-backed ETFs or ETFs as a long-term way of holding gold. Now, I have very clear answer to that, which is that

3:09you're holding gold as emergency insurance. So I think that you should have a reasonable amount of your gold in actual physical, easy to access gold just in case all the worst things really happen all at once. And then you have your gold. But you can also, you know, gold in a ETF, ETF with a good provider is a pretty safe way to do. Yes, you are inside the financial system. Yes, you do have custodian risk and management risk. And financial risk to the extent is entirely possible that your provider might become insolvent, might go bust, and then it'll be difficult for you to reclaim your money. But the gold is there, the gold is there. And while you don't have an individually allocated bit of gold, you have a share of the existing gold. So are there risks with it? Absolutely. But the gold is there. So yes, you should have a reasonable amount, I think, as physical gold because, you know,

4:14one of the reasons for holding gold is because terrible, terrible things can happen. But if you're holding it as a protection against inflation or the general collapse of fear currencies or repression that doesn't involve seizing gold, then you have to have a good way to capture that upside. Is that fair, John? Yeah, I do think that's fair. I mean, I think, in a foreign country, there's a risk appetite thing going on here. And the only truth is that I am not so worried about the physical side. I definitely take your point about, if you're genuinely worried that they can have a apocalypse or so, if you genuinely want to ensure against an apocalyptic scenario, then the only answer is to have some physical gold that you can literally access, which creates its own problems. It's a pain in the neck to store and you have to have a safe things like that. But if that's what you want, then that's what you need to have. I'm carefully comfortable with the idea of physically going back to kind of ETF. Don't have any kind of

5:16worries about that. And it's a good way to get exposure to the price. But what I would say is this reader is pointed out that they actually do hold quite a lot of gold relative to, I guess, you know, what probably certainly what you're average kind of investor does. And so from that point of view, I would think they will, you're clearly something that is worried about this sort of thing. So yes, you specifically probably have got a lower risk tolerance for the emergency scenario. So you probably should have a bit more physical gold literally too hand than you do at the moment. I guess it would be the only kind of better way to add to what you said. Okay, far enough. Some people treat Chachy PT like some kind of smart search engine and some use it to get work done. Chachy PT work is a new way of working in Chachy PT that can take action across your apps and files, stay with a project for hours if needed and turn a goal into finished work. It's designed

6:20to help you move from a chaotic starting point to a reviewable first version. So all the source materials, briefs and scattered information that you have to grind through to turn into something useful can just become something useful. Put Chachy PT to work on your most ambitious ideas and projects. Get started at chachy PT dot com by selecting work mode available on plus and pro plans. The world of business is constantly evolving every day new challenges new opportunities new ways of working. Comcast business keeps you totally in step with secure AI back networking built to power the way modern business gets things done today in more than 100 countries around the world. That's some serious muscle and get this Comcast business powers over 90% of the fortune 500 and millions of small businesses behind it all network engineers cyber security specialists support teams thousands of experts answering your call at 2 a.m. like it's 2 p.m. always on always ready.

7:25That's a lot of coffee one partner powering how business gets done for companies of every size all around the globe when you add it all up no one does business like Comcast business. This is Robert Smith from business history. If you're listening to this there's a good chance you're a small business owner and like every small business owner you started with a dream to do what you love and watch it grow what you probably didn't dream about keeping up with cyber threats. That's where master card can help with access to tools that help identify cyber threats to better protect your business building a dream business priceless for cyber security in a changing world. There's master card. Learn more at mastercard dot com slash small business. If you listen to financial news you know a lot of time is spent thinking about what's next. The next opportunity the next investment the next move but sometimes what matters most is being ready for what you never saw coming a storm damages a second home a pipe bursts above a collection you spent decades building an unexpected loss puts a growing business on pause those are the days no

8:31one sees coming but for more than 75 years since an ad insurance has been ready when they do with deep expertise coverage for businesses homes valuables and more Cincinnati insurance works with independent agents who take the time to understand what matters to you together they help protect more than what you own they help protect what you're building toward and when a bad day does come Cincinnati insurance has real people there to help make things right because planning for the future isn't only about knowing what's next it's about making sure you're ready for what you can't predict let Cincinnati insurance make your bad day better find an independent agent at cian fion dot com right on his another one which I actually think is kind of interesting and we've discussed it the other way round previously so it's from Tim and he's writing about one of the podcasts we did recently this one was was Lawrence Hulse who is from onward opportunities are basically invested

9:35in small caps and along the way in the podcast he mentions that him buying the shares supports the businesses that he's buying into and Tim says you get this off him but what does it mean in that if you're just buying shares than the secondary market it doesn't seem to hold so investment fund buying a stake it's just facilitating the selling of other investors the funds the shares just switch shits hands but they don't there's no impact on the firm itself now that is absolutely fair and one of the things that we've talked about are I've written about quite a lot over the years is that when people sell shares in big companies as a protest you know sell shares from tobacco companies or whatever makes absolutely no difference whatsoever to anything because the capital has already been raised and the company just carries on as is but it's different I think if we're talking about small companies who may need to raise money again in the future the higher the share price the lower their cost of capital effectively right so they if they want to raise more money

10:38they want to issue shares at a high price so if you're supporting a smaller company that may need an injection of capital then simply by buying and holding the shares you are to a degree supporting them so that does kind of work and also of course but in in the same way you're providing the with the ability to pay their employees with some kind of equity stake or some kind of option to stake which we don't necessarily always approve of but nonetheless there's a positive for company management so I'd say that if you're right down the bottom of the market cap structure that can work and if you look at the other way around one of the things that we've talked about quite the other way around but with bigger companies we've talked previously about the way that passive pushes shares and some companies up to what appear to be unreasonable valuations relative to their business and one of the things that that does is the misallocation of capital on the other side and it allows companies to raise large amounts of money very cheaply where maybe they wouldn't have otherwise so it holds in that kind of place you have to be raising capital or be needing at some

11:42point to raise capital for it to matter if I explain that well or I have made a complete massive explaining it. No no no I think you've explained the practical side really well there but also there's the other point of you know when you go public there's an element you're doing that for profile as well and it's one thing if you're you know your BP you don't need the profile but if you're a kind of small cap there's just going public going aim or even at the bottom end of the footsee then at least one of the reasons a lot of companies do that is to get some kind of exposure some kind of profile and obviously investing in it is a good way to kind of like help them when that front as well you know I know in the other point that we're always talking about is if we want to have companies that you know British people if you like kind of benefit from as opposed to you know buying any SpaceX once it's already made a trillion percent on the private market then this is the kind of thing that we want to encourage and I was getting away from what the

12:45they were from what Tim's asking to an extent but if you want to have a thrive in ecosystem of businesses then they need to know that they can go on the market and someone's going to be interested in their shares because if they don't then you know if Laurence house isn't buying them then who else who is gonna buy them so I think yeah this is this is the other issue why why have a market that's all okay all right then we agreed on that right one more question before we finish up today and this is from Robert and Severnitz thank you thank you Robert for your question by the way Robert says that you're great John so that's nice nice he is suggesting that we do some podcasts or even just talk about how you manage I tricky ten years before you actually start taking your pension assuming you have a DC pension it's inside a sit wrapper for example how do you balance the move to less risky assets while at the same time acknowledging you may be investing for 13 more years now actually we should do a proper podcast on this but there is one thing that I wanted to say about it which is that of course you can bring your risk levels down you become increasingly

13:46diversified maybe you move more into equity income etc so there's lots of things you can do to bring down your risk while being fully invested but the one thing that I would say is this is a time to have more cash or cash equivalence so as a younger investor we always say we you know maybe you should have six months worth of spending money in cash that makes sense then the rest of your money you have time for it to grow but if you are older it seems to me that you should have quite significantly more of that either in cash or short time guilt yeah and I think the other thing remember is that it's it's moving from because when you're younger you're investing for growth but the older that's not the older you get the closer you get to your retirement goals or whatever your financial goal the more you should be focusing on okay I've made it now can I protect it so they're kind of wealth protection element so having a clear idea how much you think you need is also really helpful there because that gives you the confidence to do the kind of de-resking that perhaps you need to do because it's hard it's hard to shift out that mode of like oh I want

14:52to make x percent and realise honestly what I've got is just about enough so maybe I should be looking for something that delivers you know y percent instead and most particularly the case if historically you find investing to be kind of fun you know there's no so much fun right you have to maybe you have to do what we always suggest people do which is that you move the majority of in-term what I've as far as more income generating etc and just keep a little bit for playing yeah yeah hopefully that anyway we should do a full podcast on this and both try and find a proper expert coming to us about this anyway more questions please send them in we like them and also it makes us think which is useful thanks for listening to this week's Merrin talks your money if you like our show rate review and subscribe wherever you listen to podcasts also be sure to follow me and jump on x at Merrin SW and john underscore topic this episode was produced by some aside in Moses and them questions and comments on the show and all our shows are always welcome our show email is merrin money at blimpook.net

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18:13make your bad day better find an independent agent at cion fion dot com