One of the most targeted demographics by financial advisors and private bankers is that of the high net worht investor. The obvious reason that this is the case is due to the fact that advisors typically get paid on their assets under management and high net worth investors have more money. It is easier to service 100 people with $10 million each then it is to service 1000 clients with $1 million each. Because of this many brokers and advisors are targeting this demographic far more heavily then in the past.
What is sad is that while they are going after the HNW investor more and more there are a ton of misconceptions as to what a HNW investor needs. Many advisors that are new to working with HNW investors will just try and put all of their money into the same crap that they have always pushed. Guess what folks? A 70/30 mix of stocks and bonds just doesn't, or at least should not cut it when dealing with real money.
Instead it is imperative that brokers and advisors do a lot of homework and become proficient and alternative investments like hedge funds, private equity, venture capital, advanced tax strategies, timber, real estate, etc. Essentially you must learn the ins and outs to just about everything.
If you don't know what a global macro hedge fund is and how it looks at things then you need to learn. if statistical arbitrage scares you then grow up and do some homework. Strategies like convertible bond arbitrage, volatility arbitrage and the like are all commonplace investment strategies in the world of HNW investors and you better be up on the advantages and disadvantages of them.
Wednesday, June 24, 2009
Investing in Gold For Beginners
You want to diversify where your savings are deposited? How much should you invest in gold? Should you buy this and take delivery?
Here I offer 5 tips for the new Investor in this precious metal.
1. How much should I invest?
This is a personal decision, but most commentators would recommend anything from 5 - 25% of your wealth should be in gold. It depends on how 'bullish' you are. This metal is an insurance for the bad times and it will never go to zero in value. Many other investments have that possibility.
2. How much bullion should be in my possession and how much in a vault?
It is sensible to have some physical bullion in your possession. The ratio is yours to decide. Small bars and coins are the best option. You can buy small tradable pieces (or coins). Always buy pure 9999 coins.
For bullion storage try some of the better known gold and silver bullion companies. Make sure the company matches your investment with the actual physical gold.
3. Where do I store my physical bullion?
Most people buy a safe and install it in a secure place in their home. Others put it into Bank Deposit boxes. Or you can split between the two. With some companies you can opt to store your pieces in a secure vault in Switzerland.
4. When do I sell my gold bullion?
Gold is very liquid and can be quickly sold in times of monetary stress. If you are looking at it as an investment, then look at some of the better commentators on the internet for advice of when to sell.
5. Who will accept my small pieces when I need to trade them or sell them?
Most bullion dealers will be happy to buy pure gold. Usually they will buy bullion back at spot (the gold price at the time) plus or minus a small percentage. Also, in times of financial collapse this metal will be acceptable as money to most people in exchange for goods or services.
Here I offer 5 tips for the new Investor in this precious metal.
1. How much should I invest?
This is a personal decision, but most commentators would recommend anything from 5 - 25% of your wealth should be in gold. It depends on how 'bullish' you are. This metal is an insurance for the bad times and it will never go to zero in value. Many other investments have that possibility.
2. How much bullion should be in my possession and how much in a vault?
It is sensible to have some physical bullion in your possession. The ratio is yours to decide. Small bars and coins are the best option. You can buy small tradable pieces (or coins). Always buy pure 9999 coins.
For bullion storage try some of the better known gold and silver bullion companies. Make sure the company matches your investment with the actual physical gold.
3. Where do I store my physical bullion?
Most people buy a safe and install it in a secure place in their home. Others put it into Bank Deposit boxes. Or you can split between the two. With some companies you can opt to store your pieces in a secure vault in Switzerland.
4. When do I sell my gold bullion?
Gold is very liquid and can be quickly sold in times of monetary stress. If you are looking at it as an investment, then look at some of the better commentators on the internet for advice of when to sell.
5. Who will accept my small pieces when I need to trade them or sell them?
Most bullion dealers will be happy to buy pure gold. Usually they will buy bullion back at spot (the gold price at the time) plus or minus a small percentage. Also, in times of financial collapse this metal will be acceptable as money to most people in exchange for goods or services.
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