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Speaker 1: Welcome to Ask Fear and Greed, where we take your

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Speaker 1: questions and do our best to answer them. I'm Michael

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Speaker 1: Thompson and good afternoon, Sean Aylmer.

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Speaker 2: Hello Michael, Sean.

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Speaker 1: Today's question comes from Lily with One L and she

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Speaker 1: shared it via Instagram and she says it's short and sharp,

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Speaker 1: short and sweet. Really, the gold price is at or

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Speaker 1: near record highs. How do investors actually make money from gold?

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Speaker 2: Ah? Great question. I've often wondered this because everyone talks

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Speaker 2: about investing in gold and what do you get from it?

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Speaker 2: So you don't get an income stream. So if you

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Speaker 2: invest in a share that pays dividends, you get an

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Speaker 2: income stream. If you invest it in a fixed income product,

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Speaker 2: you get an income stream. Say, invest in gold, what

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Speaker 2: do you get? Nothing? However, what you really want to

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Speaker 2: do to make money out of gold is by and

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Speaker 2: it's cheap and sell it when it's expensive. Now we

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Speaker 2: are not an investing podcast, so do not take this

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Speaker 2: as any investment advice. Go and find your own advice

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Speaker 2: from a financial planner. Just keep that in mind. But broadly,

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Speaker 2: because there's no income stream, you have to buy it

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Speaker 2: cheap and sell it expensive. Okay, it's as simple as that.

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Speaker 2: You can trade futures and options contracts and all sorts

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Speaker 2: of derivatives on goal. So maybe you can do that,

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Speaker 2: but I totally what I mean, certainly not something I

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Speaker 2: have the capability of doing. Professional investors might be able

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Speaker 2: to do that. You can probably sell gold, so if

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Speaker 2: you have a gold ring, you could probably sell that.

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Speaker 2: But otherwise how do.

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Speaker 1: You actually get it though, because I mean, you can't

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Speaker 1: just walk down to the Reserve Bank and say, look,

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Speaker 1: i'll can I have a bar of gold please, I'll

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Speaker 1: pay cash.

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Speaker 2: So you can you can access gold the price of

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Speaker 2: gold which is rising or falling. You don't have to

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Speaker 2: buy gold, so you can buy Northern Star is one

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Speaker 2: of the Perseus mining they're big gold companies here in Australia,

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Speaker 2: so you can buy shares in that and they tend

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Speaker 2: to go up and down on the price of gold.

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Speaker 2: There's a lot more to it, but that's how you

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Speaker 2: can get exposure to gold. You can't well, you can

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Speaker 2: actually go and buy gold, because you can go and

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Speaker 2: buy a gold ring in a store. But as an investor,

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Speaker 2: in fact, you can actually do that, So that is

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Speaker 2: probably how you do it. But as an investor, you

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Speaker 2: tend to buy gold stocks or fixed income products that

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Speaker 2: are based on gold, or ets based on gold. That's

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Speaker 2: how you do it. The thing that gold has got

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Speaker 2: going for it more than anything is there's not much

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Speaker 2: of it, and so forever, in all time, there's been

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Speaker 2: about two hundred and thirteen thousand tons of gold. Mind

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Speaker 2: that's estimated. About two thirds of that's happened since nine fifty.

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Speaker 2: So you know all these stories of the gold Russian

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Speaker 2: and Australia and that they didn't ever end up with

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Speaker 2: much gold out of that. So two hundred and thirteen

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Speaker 2: thousand and tons, most of it since nineteen fifty. If

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Speaker 2: you put all of that gold together, you'd only end

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Speaker 2: up with a twenty two meter box. So you know,

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Speaker 2: we used to say about all the gold ever mine

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Speaker 2: could fit under the Eiffel Tower. In three or four times.

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Speaker 2: It could fit under the Eiffel Tower. Wow. So there's

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Speaker 2: just not much. So it's scarce, so there's not much

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Speaker 2: of it. Therefore he holds its value. And so when

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Speaker 2: we talk about gold as a safe haven, that's because

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Speaker 2: there's not much of it. People like it. It holds

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Speaker 2: its value and that's actually its biggest benefit. Rather than

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Speaker 2: in inc well there is no income stream even rather

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Speaker 2: than a speculative asset. It's actually just its store of

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Speaker 2: value is what matters. Sean Michael.

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Speaker 1: Van Eck has a gold ETF, which I think has

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Speaker 1: one of the greatest codes of all time.

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Speaker 2: What is it is not like.

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Speaker 1: Gold or anything. It is it is nug n ugg.

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Speaker 2: Oh. That is very good and I love it.

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Speaker 1: It makes it. It makes it sound like you are

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Speaker 1: going to McDonald's and buying a ten pack of nugs,

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Speaker 1: but instead you're actually buying a gold EETF. And I

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Speaker 1: just thought, you know what that is. We talk all

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Speaker 1: the time about kind of companies and products being named

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Speaker 1: after exactly what they are, and.

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Speaker 2: This is that, right, Yes, yeah, no, I like it.

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Speaker 2: But when you were talking, it just took me in

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Speaker 2: another direction. You know, I love commodities that actually stand

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Speaker 2: the test of times. So I think about goal. Right,

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Speaker 2: it doesn't degrade, So most of the turner in thirty

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Speaker 2: thirteen thousand tons over mind is still with us somewhere.

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Speaker 2: It's quite phenomenal. Point. Yeah, but it's like honey. You

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Speaker 2: can buy honey and have it for decades and it

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Speaker 2: doesn't actually degrade or a wooden spoon my personal favorite.

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Speaker 2: Now a wooden spoons have been found in prehistoric caves

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Speaker 2: and we've never really got any better at making things

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Speaker 2: to stir your pots because wood doesn't conduct teat there you.

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Speaker 1: Go say, wooden spoons are so good, right, why then

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Speaker 1: are they the symbol of last place?

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Speaker 2: Very good point. They should be the best goal should

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Speaker 2: be last. My goal should be absolutely spoon.

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Speaker 1: Yeah, congratulations, you have won the wooden spoons person person

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Speaker 1: that person that wins a gold medal at the Olympics,

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Speaker 1: they get a wooden spoon around there. Oh it's gosh,

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Speaker 1: you go off on some tangents and I'm telling you

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Speaker 1: entirely for that one.

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Speaker 2: Oh please Palais.

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Speaker 1: Anyway, Lily, I hope we answered your question.

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Speaker 2: You know what.

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Speaker 1: I just hope you're still with us from the beginning

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Speaker 1: right through to the end of that. It was a

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Speaker 1: It was a good question. Thank you Lily for asking it,

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Speaker 1: and thank you Sean for answering it.

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Speaker 2: Thank you Lily, Thank you Michael.

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Speaker 1: Remember, if you've got something that you would like to know,

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Speaker 1: then please send through your question on LinkedIn or Instagram

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Speaker 1: like Lily did, or Facebook, or head along to Fear

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Speaker 1: and green dot com, dot you and send on through

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Speaker 1: there and we'll pop it on the list. I'm Michael

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Speaker 1: Thompson and this and Ask Beer and Green