UNDERSTANDING HEDGER'S CHOICE: GOLD

source: logammulia.com

Hedgers! 

Let us call you "Hedger" for investing to avoid avoid the loss of the value of money. Our previous post (see https://theallaboutbusiness.blogspot.com/2017/12/whats-your-motivation-investor.html) talked about the type of investors followed by the instruments. Now, we are trying to break down the "Hedger's Choice", in which instrument they invest the money. 

In this post, we'd like to discuss about Gold. Gold is a popular commodity. Gold doesn't corrode, decay, or rust. Gold is easy to store and it just gets easier to obtain gold. That's why gold becomes popular amongst other commodities. People save money in gold to get prepared for a certain spend in the future. Others do this to face economic instability. Gold makes the value of your money more stable. Let's just discover more truths behind the brightness of a gold.

TYPE OF GOLD

- Gold Bar

Gold bar is quite easy to find. The gold stores lie everywhere even in a small town. You can get gold bar in such store and it's just getting easier to buy gold bar since it's available via online shop.

Just make sure you buy pure gold which means 24 karat. It's also known 99.99% pure gold. You don't always have to buy 99.99% pure gold because 22 karat and 18 karat gold are also available. Despite the variety of the gold purity, the 24 karat is the best choice to invest. After you buy it, keep it at house in a safe deposit box or you can store it in a bank or another institution. 

And here you are, the example of gold bar weights: 0.5 gr, 1 gr,  2 gr, 5 gr, 10 gr, 25 gr, 50 gr, 100 gr, so on. Just so you know, the heavier gold you buy, the less the spread is.

It is highly recommended to buy gold with LBMA certification. In Indonesia, ANTAM is the only gold producer with LBMA certification so far. ANTAM also release Gold Dinar (gold coin) with varied fineness.

- Jewelry:

Gold jewelry is also an instrument. You can convert your asset into gold jewelry especially the 24 karat one. It's actually good choice since you can easily liquidate it in times of need. There are some exceptions though.

To sell gold jewelry is not as easy as to sell the gold bar. You need to consider the jewelry trend, special treatment of storing gold jewelry, and the less amount of money you get compared to the amount of money you have to pay when you buy it (this is mainly because when you buy the gold jewelry, you also pay for the cost of casting. Also, note that you have to select a gold store to buy your gold jewelry for the best price.

- Gold Deposit Account:

It's a breakthrough! You don't need to own a gold bar and store it, you will get such a passbook instead. The point is, you don't have to buy the whole bar to possess a gold. You only need to save your money  regularly into a deposit account that you can convert it to a real gold bar when needed. Of course there is a certain rate when you convert the deposit account. Also there's an extra charge 

- Gold Trading Account: 

There are so many ways to invest in gold. Some give you a chance to own gold virtually. Just like a trading account. Some trading platform provide us commodities to trade. Gold is one of them.

Put your money here and you don't really have to hold your gold for the long term. Please note that gold has a large spread that a slight movement of its price will affect nothing to your account balance.

WHY GOLD?

Instead of saving your money in a bank account, I hope you buy gold. It's never too late to buy gold today. The gold is always on the uptrend. In case you ask what gold is used for:

- Tradition That's right! In a certain occasion, gold is used for a traditional celebration or a ceremony. This leads the demand of gold upward.

-  Financing.

- Down payment. In a certain business case, you may use gold for a down payment.

- Collateral of a loan or a mortgage.

- Electricity and many more.

Since gold is widely used for so many purposes, it becomes one of the most popular safe haven. For your information, gold's month-on-month trend is declining. It has since fallen quite far from the highest point. So, it may be our best opportunity to invest in gold. For the latest update, just hit these website: Kitco.co, goldprice.org, logammulia.com.

Let's end this year spectacularly, guys. Just make it as shiny as gold!

Read More

A REFLECTION: LET'S END THIS YEAR SPECTACULARLY

2020 will come to an end as we keep counting down the days. Can't lie that 2020 is considered one of the worst year ever for most people. The uncertainty still lies ahead mainly because of Covid-19 pandemic. It has an impact on several sectors of economy such as the increasing number of poverty, the deeper recession, and the slow down of economic activity.  

I never hope that it will go worse but we have to prepare for it. Even we have to take an advantage of it. There's still a chance despite the condition nowadays. Let's have ourselves a time for reflection on what we have done before the outbreak of Covid-19.

We can see above, a picture taken from my previous post, to buy gold last year and to hold it until today probably the best strategy to take. By Friday September 4th 2020, gold's price reached USD 1,933. That means it's a new all-time highest price record of gold. Let's get it noted that last year gold surprisingly made a record of the year and it keeps going on hitting new record. Imagine how much return you can gain if you had invested your money in gold last year.

 

image source: goldprice.org

And now, since gold hit USD 2,000 an ounce for the first time ever several days ago, it likely declined a little bit. I believe it's just a sort of correction. The price will just move no lower than USD 1,900. You may hold your gold for a while. There's no need to sell your gold too early and once it breaks USD 2,000 again, then it will form another higher level of resistance entry.

image source: finance.yahoo.com

During the outbreak, try to save your money in stock and invest it in consumer goods producer such as UNVR or ULTJ. The demand of consumer goods remains at its best though the outdoor activity is being limited. UNVR and ULTJ are still reasonable to buy especially for long term investment. Let's add UNVR and ULTJ to our watch list for the next one week and we'll discuss it later.

Read More

A NEW HIT FOR GOLD AND IDX COMPOSITE IN 2019

The beginning of 2019 seems to be a good time for Gold and IDX Composite. Gold finally comes back to 1,300 USD again! IDX Composite is in very good uptrend in fact. Go buy them if you dare!

There are some reasons why you need to buy them soon. First of all, it is because the uncertainty. This year we will face some daunting risks the uncertainty grows.

Geopolitical conditions is still in the mix. We don't really know when US-China trade war, Brexit, and US government shut down come to an end or even get worse. Yes, it is true that Mr. Trump just ended the shutdown, but it is temporary. Just so you know, according to what we read, this is the longest US Government shutdown in history.

We believe that the uncertainty won't get clearer than before even if Mr. Trump gets the money to build the Border Wall.

Financial condition is likely to affect the market the most. IMF cuts global economic growth forecast as they said at World Economic Forum several days ago. And don't forget that The Fed will slow down this year, no more raising rate. At least The Fed won't be as aggressive as last year. All of this just because of the uncertainty.

Such condition usually pushes investor to move their money to safe haven. When this happens, safe haven's demand will rise, making the price get higher. Safe haven such gold should benefit in many ways if those conditions get fulfilled.

TIPS

GOLD

Buy now! Since the price is now getting through USD 1,300 for the first time this year, that means gold breaks another resistance level. Gold attempts to reach higher considering last year's highest point is USD 1,350. Gold will play in USD 1,300 - USD 1,350 area for sure. Chinese New Year celebration on February should support gold movement as well.

We believe there will be a correction when US-China trade war talks about a new deal on March 2019. Make a good portion of your portoflio for gold before it's too late. You only have one month left to make a decision. 

IDX COMPOSITE (IHSG)

In Indonesian, it's called "Indeks Harga Saham Gabungan" or simply abbreviated as IHSG. Watching IHSG's movement can make me smile. The price keeps hiking up!

Exernal factors influence IHSG positively. Uncertainties affect foreign investors to put their money in IHSG. IHSG still moves upward at least until the end of February due to global economic slowdown.

At this time, what you need to do is to buy while you can, especially one month from now. When you buy enough, you can wait and see then. At a certain time, when commodities start to decline, you can sell when the price is still high to have a gain. Everything can happen in the future, so it's much better if protect money soon.

Next post we'll renew the correlation between price movement of commodity such gold and some variables.

Image source:

Yahoo Finance.

News source:

Miscellaneous.

Read More