In SMSF have held a substantial amount of gold (!!!) shares. Some of these pay dividends...albeit nominal. The reason behind holding these investments were twofold.....one being long term growth and the other as a hedge against market shocks. (Ultimately the goal above all that was to lead to a higher income in retirement.) Re the latter, whenever there were severe shocks in the world and markets tumbled, my portfolio usually went up. As we have all seen gold has not been acting as a 'safe' haven for a while now, it's dynamics in a state of 'change' it seems. The majority of SMSF is in cash. I did not see the turn in the market happening in July 2012 (from memory) and basically have sat on the sidelines as the likes of the banks, csl and many others have put in some amazing returns. I was waiting for the drop in top income and growth stocks to load up and as we have seen this has not happened.
So here we have a situation where quite a number of shares held are sitting on sizable losses. Then of course on Friday night another smackdown in the gold price which will of course result in panic selling today adding to paper losses inside super. When world governments were accumulating gold for their own wealth and protection it seemed not unrealistic to follow a similar path by way of investing in the miners. However, rising costs (especially labour), diminishing gold price, currency wars and political posturing have seen gold being hammered.
Regardless of one's view on gold and where it is now heading, of major concern is, if I sell (which I have no intention of doing on the open), I will at first be abandoning my long term view and secondly there will be a string of losses inside the superfund. We are in pension phase so no tax offsets, etc. However, could chrystallizing these losses awaken any compliance issues? This issue has probably held me in some longer than I should as I always expected gold to continue it's upward trajectory.
Of course 'Harry Hindsight' says that an it would have been ideal to have invested in banks etc. to have built capital then jumped out and bought strong cash flow, low cost producers paying dividends when everyone is touting that gold is 'finished'......aaaarrrrhhhhh Harry...!!
