Get all cash out of the bank

[TheHeathens]

Am I to take this seriously? Heathens are you telling me that when/if the economy collapses, you're going to wait in a queue with other investors for Mr Birch to supply your gold? That's Just like Expecting the very nice bank manager from the Halifax, to provide you with cash if they go bust.

You clearly don't understand gold's status in the market. This is because you're blinded by normal economic conditions, and cannot apply economic principles away from the norm. Well you'll get a shock if our economy continues the plunge, because the norm won't apply.

Are you serious? I'm guessing there's no point in asking you whether the glass is half-empty or half-full! Do you seriously think that we are heading into economic meltdown with complete stock-market collapse and multiple runs on banks?

Where exactly did I say that Graham Birch would supply the gold? I'm fully aware of gold's status in the market as a safe haven during an economic downturn, but investing in gold equities is as valid as gold ownership - when gold is in demand, so are shares for gold companies.

Believe it or not, this is not the first economic downturn ever and history shows the above to be correct. What I have said it's awful advice to put all of your money in gold or gold equities(true), just as it's awful advice to have all of your money in cash deposit accounts (and who needs more than £35,000 invested in deposit accounts?) unless you are extremely averse to risk.

Fact is, this economic downturn is not as bad as the doom and gloom merchants (step forward Mr Leigh) would have you believe. Financials have been in a 20 year bubble and have taken too much risk; this is just a readjustment of that risk that is unfortunately putting pressure on the markets. We may be heading for a recession, but we're not quite at depression stage yet!

I've mentioned twice that Diversification is Key and you've avoided it twice - very few of our clients have lost money in the last year even with the FTSE down by about 20% because we've diversified their portfolios. Even with the little bounce in gold prices last week, people who invested directly in gold in March (at the high point) would have lost 10% of their investment, on paper at least.

For the record, I do think that gold has some way to go before peaking - adjusting for inflation the peak in 1980 equates to about $2,200/oz, more than double the recent peak. There are just more ways to invest in it than doing so through direct investment.