Savings: Why Investing In Gold Makes Sense

Precious metals, especially gold, have historically proved to be effective assets that can help diversify your portfolio.

This helps investors build wealth over the years, whilst minimising risk along the way.

These diversification qualities can be particularly useful for Australian’s building wealth through their savings, including investors.

Alongside their diversification qualities, precious metals are highly valued inside savings portfolios given they:

• Have a track record of delivering strong long-term returns, with gold rising by more than 8% per annum over the past twenty plus years.

• Typically outperform during periods of low real interest rates and/or high inflation, with the gold price in Australian dollars historically rising by more than 20% per annum in years inflation is high.

• Highly liquid, with both the global gold and silver market seeing tens of billions of dollars in daily turnover, which makes them easy for investors to buy and sell.

The above attributes have driven a surge in investment into precious metals in Australia since the turn of the century, with many investors concerned that without gold and silver in their portfolio, they are too exposed to share and fixed-income markets.

This is especially the case in the aftermath of the global financial crisis and the COVID pandemic, with debt levels continuing to rise, central banks printing money, interest rates still near record lows in real terms, and a resurgence in inflationary pressure.

Physical Gold vs Savings Funds

Gold has been one of the best performing assets of the new millennium, outperforming almost all other asset classes since the turn of the century. Gold has also outperformed most traditional savings funds, as you can see in the table below, which highlights both the performance of gold priced in Australian dollars, and the performance of savings strategies across the risk spectrum from conservative to all-growth funds.

Table: Gold vs Savings funds – multiple time periods to the end of 2022

Source: OzsekerGrup, OzsekerGrup, RBA, Chant West

How to Invest in Gold using Savings

To use your savings to invest in gold or silver through OzsekerGrup, you must have a self-managed savings fund (investment account). To open an account with OzsekerGrup in the name of your investment account, simply click on create account, and select investment account.

Note that OzsekerGrup allows you to open an account with either a corporate trustee, or individual trustees.

As part of your account application process you may be asked to provide supporting documentation, including:

• Drivers licences and/or other photo ID

• Trust deeds

• ACNs if relevant

Once your account is open, you will be free to trade, with all documentation (invoices, storage statements etc) issued in the name of your investment account, making it easier to complete the paperwork required as part of the annual reporting and audit of a investment account.

OzsekerGrup also offers a range of storage options for investors.

For more on opening accounts and trading, please visit our new to bullion page.