One of the most prominent questions many first-time gold investors, many of which are seasoned multi-asset investors, ask themselves is, ‘what do I do with a physical investment?’
Gold or coins are substantial and tangible investments, and it’s not a surprise that many investors, who are so used to numbers and figures on a computer screen or spreadsheet, just haven’t the foggiest when it comes to storing their investment safely and securely.
In this blog, we’ve put together a few different options that are open to you as an investor. There are pros and cons to every form of storage, but you’ll need to consider accessibility and the size and weight of your gold as a matter of priority.
For example, a large gold bar is just a single investment, but bullion coins can be separated and stored in various locations.
Bank boxes are one of the more secure options of course, but that doesn’t mean they don’t come without inherent risk.
For starters, bank branch storage rates are not the cheapest option, and a lot of high street chains have discontinued this as a service. And in some cases, they do not have the finest track record when it comes to keeping customers valuables recorded.
- Pro: Eliminates home storage risk
- Con: Bank collapses can, and have, happened
- Con: High costs
Safe Deposit Boxes
Over the course of the last decade or so, the banking system has lost a lot of trust, which has led more and more consumers to look for alternative options.
This trend is perhaps why safety deposit boxes are now being mooted as a viable alternative to bank storage.
Just like bank storage, they are less risky than home storage. However, if for some reason, you need to get hold of your investment quite quickly it’s not just a case of unlocking a safe – it will require some effort on your part to retrieve it.
- Pro: Less risky than home storage
- Pro: Not subjected to potential banking collapse or legislation change
- Pro: Fully insured with lower fees
- Con: May not be easy to retrieve
It’s impossible to gauge how many investors store their products within their own home. This is usually because they, or a few trusted family members, are the only ones who know where the gold is located.
One of the biggest perks of having your gold stored safely at home is the easy access. For example, in April 1975, Saigon fell. The end of the Vietnam war was to follow.
The citizens of Saigon were forced to evacuate, leaving behind their homes and most of their belongings. The immediacy of this order meant that getting their hands on cash was quite impossible for those lucky few who fled with their lives. Some of those who did escape were able to rely on their personal store of gold, enabling them to fund a new life elsewhere.
Of course, you’re very unlikely to face anything even remotely as severe as this example, but it does offer a perspective on why investors sleep soundly when they’ve stored their gold at home.
- Pro: You know where your investments are, which means you can access them at any time.
- Pro: Keeping your investment quiet means that nobody need know that you’re in possession of such valuable assets.
- Con: Burglaries happen with more regularity in residential dwellings than they do at banks or depositories. If you’re the target of an attempted robbery, if you’re not creative enough with your storage options, you will have your investment stolen.
Bury Your Gold
Burying gold and other valuables is what human beings have been doing for centuries.
It does sound a little strange, especially given that we live in such a high-tech world, but there’s a reason a dog buries his bone – no one, besides him, knows exactly where’s it’s buried.
If you do decide to do this, it’s quite crucial that you and a trusted confidant can find it and dig it back up again.
Gold is a durable metal, but you’ll need to ensure its stored in an airtight lockbox which will repel water and any other potentially damaging environmental influences.
- Pro: It’s hidden away – only you and whomever you choose to inform knows precisely where it is. Burglars might be a little savvier when it comes to finding increasingly creative hiding spaces in the home, but they’d have to be extremely lucky to find your buried treasure.
- Con: Remembering where you buried it to the letter might be difficult.
- Con: The soil and the environment are continually evolving. If you haven’t locked on specific coordinates or you’ve not correctly secured your investment, you could be in trouble.
If this seriously an avenue you wish to travel, you must be astonishingly creative. In cupboards, under the mattress or loose floorboards are just some hiding spots that potential thieves will search first – it’s a risky approach.
Most burglaries happen during daylight hours, so if a curious member of the criminal classes comes sniffing around, it’s quite likely that you won’t even have darkness on your side.
If you must store your gold at home, but be sure it isn’t one that can just be carried away.
Con: Easy to misplace, particularly if items are moved around by unsuspecting members of your household.
Con: Burglaries, on average, cost homeowners £2,833. Leaving your gold investments unsecured can increase this figure by thousands. Don’t make it easy for them.
These are just a few ways in which investors can store their assets. It’s nearly impossible to assign percentages to try to ascertain which method is the most popular, given the nature of the investment.
Gold is known as a ‘safe-haven asset’, but it is only as safe as the place in which it is stored.
We invest in gold for:
You’ll need to understand how each of these factors play into your decision on storage. Once you’ve found a home for it and you’re satisfied that all your needs have been ticked, then that’s the right solution for you.