How Does The Evolution Of The Price Of Gold Compare With Different Assets?

Analyzing the same period of the previous chart, the profitability leader is the CDI, with appreciation around 2868%, or 29.68 times the amount invested since the beginning.

This means that if the investor had invested R$100,000 in assets pegged to the CDI, he would now have R$2,968,000.

The same goes for all assets between July/94 and February/13:

CDI

R$ 2.968.000

Ibovespa

BRL 1,673,000

Gold

BRL 874,000

Dollar

BRL 200,000

The data are important, however, we know that the exchange rate policy prior to 1999 made it impossible for the Dollar and Gold to advance, as well as interest rates at the time were close to 50%, favoring investments linked to the CDI as opposed to the others.

What If The Start Of The Analysis Was In 1999?

Gold would be first in profitability!

Check the value for an initial equity of R$ 100,000 in the period between January/99 and February/13:

Gold:

BRL 950,000

Ibovespa

BRL 899,000

CDI

R$ 737.000

Dollar

BRL 165,000

Annual Comparison Of Gold Return With Other Assets

This is a vertically aligned graph for you to observe the variation of each index over the years.

Despite this alignment of years, note that the vertical axis (Y-axis) is different for each chart.

However, it is already possible to have a good idea of ​​what was the best investment in each year. Curiosities:

 

CDI practically unbeatable from 1994 to 1999.

With returns above 20%, investing in the country’s interest rate, despite a greater risk, especially after the confiscation of savings in the Collor era, was synonymous with high returns.Currently, returns above 20% are history and a 1-digit return is expected in the future for the CDI.

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1999: The year every investor dreams of.

Note the bar for the year 1999 for the 4 assets. All with returns above 20%. The order of return this year was:

52.72%

52.7248.07%%

 25,12%

Dollar: An asset hungry for crises.

  1. Unlike Gold, which showed good profitability in periods of economic growth, the Dollar needs financial crises to show good results.

    Notice that in the crisis period (2000-2002) it went up.In the next 5 years of strong growth (2003-2007) all fell.In 2008 it rose again, followed by a sharp drop in 2009.From 2010 until today, as the Stock Exchange is “walking sideways”, the Dollar has not shown strong variations, but a slight increase.

Year-on-Year Return since 2008

To finish the series of statistical graphs on Gold and its comparison with other assets, I bring the graph below comparing the year-on-year return since 2008.

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4Best Ways To Invest In Gold In 2022

Buying jewelry is one of the opportunities to invest in gold. Just like investing in the Stock Exchange, the objective is to try to buy cheap to sell high.

There are those who think of jewelry simply as heritage, accumulating gold, silver and the like as part of family assets.

Despite the ease of investment, the Gold present in jewelry will not always be 24k (999 parts of Gold for 1,000 parts of metal), but 18k (750 parts of Gold for 1,000 parts of metal).

Benefits:

  • Having money, it’s very easy to go into a jewelry store and leave with a jewel.
  • It is easy to store and can even be used if the jewelry buyer so desires.

Disadvantages:

This is an uncommon modality and it has its difficulties due to several issues such as:

  • Need to assess the quality of the jewelry at the time of sale.
  • Every piece of jewelry kept at home needs a very safe place to avoid prying eyes.
  • The price obtained when selling gold through jewelry is not always fair, depending on the appraiser ‘sexpertise
  • Unpractical investment option.
  • The correlation with the Gold price is not very strong.

Pledge Of Jewelry (Gold)

Who owns jewelry or gold bars can use the pledge as a form of capitalization .The operation is much more advantageous than a personal loan, for example, since the jewelry serves as collateral for the loan made from the pledge.

This is a non-traditional way, since capitalization may not exactly be considered a form of investment, but I decided to put it in the article, since it involves gold bars.

Conclusion: Not Recommended for Investments!

Buying Gold Through Auction Sites

Famous auction sites such as Mercado Livre and eBay (links to the gold section of these sites) offer opportunities to buy both jewelry and gold coins and bars.Despite the wide variety of options and prices, one must be very careful when buying gold through these sites, as informality is high and the quality of the material cannot always be trusted.

Benefits:

  • Convenience of buying online.

Disadvantages:

  • Quality of the material sold depends on the seller’s credibility, which is not always reliable.
  • High prices compared to the price of Gold on the BM&F.
  • Lack of standardization of the material.
  • Difficulty in resale, since you would have to follow the same path as your purchase, advertising on this type of site.
  • The Purity of Gold sold (18k, or 750 parts of gold for every 1,000 parts of the metal) is different from gold on the BM&F (24k, or 999 parts of gold for every 1,000 parts of the metal).

Conclusion: Not Recommended for Investments!

Buy Gold Through Securities Distributors

There are now some brokerages and securities dealers (DTVMs) that create products from 250g gold bars and contracts, selling small quantities (1g to 25g) in laminated cards and bars of different sizes.

The products are based on the gold price of the day plus a premium (surcharge) defined by the distributor. All are standardized, certified and sealed.

Benefits:

  • Convenience of buying online.
  • Ease of transporting and storing gold (mainly cards, with the same format as credit cards).

Although the option appears to be attractive, it has some strong disadvantages that are worth mentioning:

Disadvantages:

  • Warranty on Gold Resale. Before closing any deal with a securities dealer, check its history and warranty conditions.
  • High Costs. From insurance, freight to the spread (difference) between the price of bars and gold on the BM&F, it becomes very expensive to invest through this modality. I myself have invested through this type of investment and doing the math I realized that the costs sometimes reached 10% of the amount invested.
  • Reselling is Physics. As you receive Gold in your house, to sell it you need to go to one of the securities dealerships, most of which are located in São Paulo. The spread between the BM&F Gold price and the price of your gold bar is also present at the time of sale.

Costs To Invest In Gold

  1. Brokerage

The application is also subject to the collection of a brokerage fee, which varies according to the contracted brokerage. Generally, the fee is in the range of 0.2% of the total amount involved in the transaction.

  1. Custody

The Exchange charges the custody fee and transfers it to the custodian bank. 0.07% per month is charged , calculated daily on the position held by the investor, according to the following methodology:

Daily Custody Fee = (maximum gold price on the day x 0.07% x balance in grams)/ 30 days.

Example:

  • Maximum Value of the Day: BRL 100.00
  • Exchange Standard Rate: 0.07%
  • Balance in Grams: 250 (g)
  • Dias: 30

BRL 100 x 0.07% x 250 / 30 = BRL 0.58 . (Daily fee)

These amounts are calculated daily and accumulated to be paid on the fourth business day of the following month, or when the investor resets the position.

Will I Have To Pay Tax On The Gold I Sell?

As it is considered variable income, gold as a financial asset is exempt from income tax up to the limit of R$ 20,000. In this case, it enters the statement as “Exempt and Non-Taxable Income”.

If the sale exceeds R$ 20,000 , the rate is 15% on the capital gain.…

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Common Questions About Investing In Gold

Below I have listed some questions that may have remained unanswered throughout this article.

If after the end of this article you still have any questions, leave a comment to make this article even more complete.

How To Identify Good Buying Times For Gold?

This is the question that we all want a ready-made answer with several investment tips .

Although It Is Impossible To Predict The Future, Good Times To Buy Gold Would Be:

  • high inflation
  • Rise in the Dollar Price
  • low interest rates
  • Financial Crises

Is Gold Investment Or Capital Protection?

We can say that it fulfills both functions well, given due attention to both functions.

From an investment technical point of view, it offers a low correlation with other assets and a high (historical) return. Since 1999, Gold has yielded 1,050% or an annual return of 21.52% .

Therefore, any portfolio that has had gold in its allocation since 1999 has improved its risk-return ratio .

In addition to the good historical return, Gold is an essential investment in financial crises, guaranteeing excellent protection for the investor.

In these periods of crisis, assets such as stocks, real estate funds and long-term fixed-rate and IPCA-indexed securities tend to lose value.

There are few assets that gain value in these periods and Gold is one of the best, along with the Dollar.

Invest In Gold In Cash Or Gold In Certificate?

Some more conservative and concerned readers probably prefer Gold in cash and kept with them to avoid government confiscation and serve as currency in extreme situations.

Certified gold, on the other hand, offers more practicality to buy and sell, in addition to less bureaucracy and a safe place for custody.

This answer depends on the investor’s preferences. Personally, I prefer Gold in certificates, for its practicality in relation to Gold in cash.

I prefer a certificate that my Gold is stored in the bank than having my own gold stored at home.

What Are The Risks Related To Gold?

The main risk for those who want to buy Gold certificates is their price devaluation on the Stock Exchange.

For Those Who Wish To Have Physical Gold At Home, The Main Risks Are:

  • Not having a safe place to keep the Gold and increase the chances of it being stolen.
  • Extra need to evaluate the quality of the Gold, to verify if it is really 24k (99.9% pure).
  • Lack of liquidity at the time of sale.

What Is The Proper Allocation Of Gold In An Investment Portfolio?

Despite all the attractiveness of investing in Gold and its excellent profitability over the last 14 years, it is not recommended that investors have more than 20% of their allocation in Gold.

The ideal is for investors to seek a wide diversification of their portfolio and asset allocation , never placing a large part of their capit al in a single investment class.

Generally Speaking, Investment In Gold Could Be Allocated As Follows:

  • Optimistic Economic Scenario : 5%
  • Neutral Economic Scenario : 10%
  • Pessimistic Economic Scenario : 20%

This is just one example, and the optimal allocation will vary from investor to investor.…

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Gold Funds, What Are They? How They Work, Types And How To Invest

Gold funds are a great option for people who want to build a store of value. This is because, despite going through price fluctuations, gold is one of the best assets to build a financial reserve.

What makes gold so interesting as a store of value is the fact that it maintains its value over time. That is, 100 years from now, this precious metal will not have lost its value.

In addition to gold funds, it is also possible to reserve with physical gold or with gold contracts traded on the stock exchange. If you are going to buy physical gold, it is important to have a safe storage place. Contracts are traded similarly to stocks.

What Are Gold Funds?

Gold funds are a type of investment fund, aimed at investing in gold. In addition to having good liquidity , this is one of the most practical ways to invest in this precious metal.

path to wealth.

Regarding the risk classification, gold funds are considered moderate. This is because it is an investment in variable income , whose oscillation depends on changes in the price of gold.

How Do Gold Funds Work?

Gold funds are considered hedge funds . As its name suggests, its focus is on investing in gold-backed assets. In this way, the fund can invest in gold contracts or gold ETFs traded abroad.

The investment in this asset can be short, medium or long term. However, as the objective of investing in gold is usually capital protection, it does not make much sense to invest in the short term. After all, gold doesn’t experience strong short-term appreciations, nor does it generate passive income.

The operation of investment funds in gold is similar to other types of funds. Therefore, the quotas are traded in investment banks or in stockbrokers . The manager is responsible for making investments in the fund and the investor has no decision-making power in this regard.

Taxation of gold funds is similar to other funds. Therefore, in the first 30 days, we have the IOF discount , in case the investor redeems the application.

Income Tax (IR) starts with a maximum rate of 22.5% and, as time goes by, reaches a minimum of 15%. Finally, we still have the come-quotas , which works as an anticipation of the IR.

It is important to point out that the investor’s equity may increase in value according to fluctuations in the price of gold. However, the objective when investing in gold investment funds is not appreciation. The intention is to allocate part of the capital in gold to form a reserve of value and protect part of the equity over time.

Basically, there are three types of gold investment funds available on the market:

1- Real Gold Funds: The focus of this fund is to invest in gold contracts on the stock exchange. This type provides currency protection and has the advantage of not being impacted by fluctuations in the dollar .

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2- Gold Funds In Real + CDI: The purpose of this type of fund is to invest in the medium and long term, focusing on the change in gold prices along with the CDI .

3- Gold + Dollar Funds: Gold + dollar funds invest in assets that follow dollar fluctuations and, therefore, do not offer exchange rate protection. These funds go through more fluctuations, as the US currency fluctuates daily.

Reasons To Invest In Gold

The main reason to invest in gold is to create a store of value. In short, over time money loses value.

However, gold remains valuable, which means that by turning your money into gold, the investor is preserving his purchasing power in the future. This is why, generally speaking, gold is sought after in times of crisis.

What made gold so good for creating a reserve was its characteristics. First, it is scarce, which means that it cannot simply be produced by governments, as money can. Second, it does not deteriorate or lose its properties over time.

The third feature is that it is accepted worldwide and is easily verifiable. Finally, we have the fact that he has proven himself over the years. That is, more than 5 thousand years ago it was already valuable and will probably continue to be in the future.

Another reason to invest in gold is the diversification of the investment portfolio with an asset that has the ability to balance the portfolio. It turns out that when the stock market depreciates, gold appreciates. That way, with gold in your portfolio, you can dilute some losses in your portfolio.

The main advantage of investing in gold investment funds is the capital protection provided by investing in an asset that works as a store of value.

Another advantage is that, in crises, the tendency is for its price to rise. In addition, it provides diversification of the investment portfolio, which is a way to protect against possible losses.

On the other hand, we have the disadvantage that prices are quite volatile, and their quotation is usually affected by macroeconomic events. We also have the disadvantage that this asset does not generate any passive income and does not offer great appreciation over time.

The first step to investing is to plan and define your goals. In this step, you must establish the percentage of your portfolio that will be allocated to gold funds, for how long and for what reason. You can also consider buying futures contracts on the exchange and even purchasing physical gold. The best alternative will depend on your goals.

The next step is to research investment funds that invest in gold. Make a comparison considering the fees charged, the fund’s performance and history. After deciding which fund you are going to invest in, just open an account at the brokerage, make a transfer and invest.

Two tips for those who are starting to invest in gold: 1st – Invest little by little : Make an application and observe its performance. As it is variable income, it will undergo fluctuations, even if it is an asset aimed at capital protection and not for appreciation.…

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7 Golden Rules Of Investing For Beginners

Want to start investing but have no idea where to start? Many new investors make mistakes frequently due to their inexperience and lack of knowledge, ending up losing money. But don’t worry, in this article we highlight 7 investment golden rules for beginners, so that you can do it in an informed and convinced way of what you are doing, avoiding some basic mistakes.

Don’t Believe Everything You Read

Newspapers can only publish reports after market prices have gone up or down. If you want to make money on your investment, you need to act before the market gets hot, as the share price is likely to peak given the great publicity and hype surrounding this investment. Remember: you should never invest blindly or you could end up paying prohibitive prices. There is no guarantee that prices will continue to rise and you may have to sell at prices well below what you bought.

Raise The Return Objective

A growth in value does not necessarily imply a successful investment, as a high rate of inflation would compensate for the growth in value. If the return on investment is lower than the inflation rate (the inflation rate in Portugal in September 2022 was 9.820%) you would still be losing money. You can opt for mutual funds, as well as insurance clauses, so that you can keep up with inflation and get a higher return on investment.

Distribute The Risk

It would be better for you to make the investment in a variety of sectors and companies, such as a healthcare company, a transport company or a real estate company. With low correlation between these sectors, it can effectively diversify investment risks. As it is very unlikely that all of your investments will go bad at the same time, a downturn in one sector will not adversely affect your portfolio’s performance. To have a diversified portfolio, you can choose to invest in an index fund or hire a financial advisor in order to build a portfolio with a greater variety of investments, with lower risks.

Don’t Invest In Entities You Don’t Know

You should not invest in industries or companies that you are not familiar with. Avoid investing in companies about which you have no idea about their operation and business area. In the same vein, if you don’t know your market well and its products and raw materials, it is likely that you will find it difficult to understand that the drop in oil prices could have an impact on finances and companies in coal mines, for example.

It is impossible to adopt an investment strategy passively with the frequent fluctuations in the markets. It will also not be able to make decisions in a timely manner if it is not properly informed of the current market situation.

Furthermore, the inability to understand investi ng can create serious problems in your financial plan. For example, if you understand the guaranteed and non-guaranteed returns of capital insurance, the odds dictate that you could earn less than what you initially invested.

Stabilize Your Debts First

If you have accumulated huge debts on your credit card or if you have taken out a loan with a very high interest rate, you should get rid of all debt before investing. You might think you can pay off debt with the earnings generated by your investment, but the chances are slim as it is incredibly difficult for most new investors to earn returns of at least 9%.

Plus, with high interest rates on credit cards, you might be surprised at the interest cost before you earn enough to cover debt. You can try joining a consolidated credit solution , with which you can combine all your credit card debts into just one loan, reducing interest expenses.

Invest And Save At The Same Time

If you need to, it’s not easy to withdraw money from a mutual fund or structured deposit overnight, as you are likely to make a substantial loss (even if you manage to withdraw that amount).

It is prudent, therefore, to add some savings for a less good day. Illiquid goods such as luxury watches and jewelery should not be counted in your savings as they are difficult to sell immediately in times of emergency.

Therefore, it would be better if you managed to have savings and an investment fund at the same time. If you don’t have enough money to create and maintain these two types of funds, try to add at least 6 months of your salary before starting any investment.

Establish A 2-Week Decision-Making Period

Take a step back if you make a big loss on an investment. Many people cannot keep calm and tend to double their investment in order to recoup what they lost. This is not just common for new investors, it is equally true for experienced traders and fund managers. They panic and tend to jump at any opportunity to recover what they have lost.

That’s why we advise you to take a step back, think carefully and weigh the pros and cons before making any decision. Review your portfolio and think carefully before making the next decision.

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