It is becoming clear that investors are currently paralysed by fear and finding it difficult to make rational decisions in the face of unprecedented turmoil in international markets. In this article, I will attempt to explore some of the issues that investors should be considering in the light of recent market volatility as shown below: Index Year to Date Return 31/12/07 to 14/03/08 Local Currency % Euro % US S&P 500 -12.3 -18.2 Europe FT/S&P Europe ex UK -16.5 -16.5 Ireland ISEQ -13.5 -13.5 UK FTSE 100 -12.8 -16.9 Japan Topix -19.1 -15.5 Hong Kong Hang Seng -20.1 -25.3 Bonds Merrill Lynch Euro over 5 year Govt 3.3 3.3 Credit Suisse/Tremont Hedge Fund Index 0.1% 0.1% Index Linked Bonds Euro Index Linked Fund 3.74 3.74 Source: Bloomberg
Gold Gold was up $2.10 to $1000.80 per ounce in trading in New York yesterday while silver was down 25 cents to $20.36 per ounce. Gold surged on the open in Asia yesterday and reached a new record high ($1030.80 per ounce). Subsequently, with U.S. stock markets miraculously recovering, gold succumbed to profit taking and ended the day only slightly higher.
It was obvious to any casual observer that debate about whether the US was in, or approaching a recession, was increasing. According to a January article in The Economist "[in] recent opinion polls, almost six out of ten Americans believe the country is already in a recession." And the media are increasingly willing to confront the situation head on.
Gold Gold was down $3 to $972.00 per ounce in trading in New York on Friday and silver was up 3 cents to $20.16 per ounce. In Asian trading gold rose to $980.22 but has sold off slightly in early European trading. The London AM Gold Fix at 1030 GMT this morning was at $973.15, £481.52 and €633.03.
Gold Gold was down some 1.1% or $11.10 to $975.00 per ounce in trading in New York yesterday and silver was down some 2.3% or 49 cents to $20.13 per ounce. In Asian trading gold rose to $984.75 but has sold off slightly in early European trading. The London AM Gold Fix at 1030 GMT this morning was at $978.50, £486.14 and €635.18.
Gold Gold and silver recovered strongly from the previous day's sell off and gold was up $21.70 to $987.50 per ounce in trading in New York yesterday and silver was up 88 cents to $20.64 per ounce. Gold and silver reached new nominal record and 27 year highs respectively at $992.10 and $21.17. In Asian and European trading, gold has consolidated near record highs and silver has been even stronger. The London AM Gold Fix at 1030 GMT this morning was at $986.25, £494.31 and €643.43.
Gold Gold and silver gave up the previous day’s gains with gold down $15.50 to $964 per ounce in trading in New York yesterday and silver down 32 cents to $19.74 per ounce. No follow through was seen in Asian trading but in European trading, gold and silver have continued to correct. The London AM Gold Fix at 1030 GMT this morning was at $966.25, £488.30 and €636.15.
Gold Gold was up $10.10 to $980.50 per ounce in trading in New York yesterday and silver was up another 33 cents to $20.06 per ounce (more on silver below). In Asian and early European trading, gold and silver have remained strong and near respective record and 27 year high levels at $988.25 and silver reached $20.70. Gold also strengthened in British pounds and euro to new record highs. The London AM Fix at 1030 GMT this morning was at $981.75, £494.56 and €646.31.
Bloomberg published an article by Millie Munshi and Pham-Duy Nguyen quoting Mark O'Byrne of Gold Investments. Gold Beats Financial Assets as Investors Seek Haven 'At least 95 percent of the new buyers have kept their money in the bullion, Mark O'Byrne, Gold & Silver's executive director, said in an interview on Feb. 26.
Gold Gold was up $4.60 to $970.40 per ounce in trading in New York on Friday and silver was up another 9 cents to $19.73 per ounce (more on silver below). In Asian and early European trading, gold rose to a new respective record and 27 year high levels at $984.80 and silver reached $20.17. The monthly close at $970.40 is a new record high monthly close and bullish from a technical perspective. As is silver’s monthly close at 19.73.
Gold Gold was up $7.10 to $965.80 per ounce in trading in New York yesterday and silver surged another 44 cents to $19.64 per ounce (more on silver below). In Asian and early European trading, gold and silver rose to new respective record and 27 year high levels but have fallen from record highs of $975.75 and $19.92. Gold strengthened in British pounds and euro to new record highs. The London AM Fix at 1030 GMT this morning was at $969.00, £488.88 and €637.58.
Presidential Candidate Ron Paul in his role as member of the House Banking Committee got a chance to question Federal Reserve Chairman Ben Bernanke on the current state of the economy. 'Helicopter' Ben, as he is known in some quarters due to a reference he made in a speech to a statement made by Milton Friedman about using a "helicopter drop" of money into the economy to fight deflation, could be said to be at the opposite end of the monetary spectrum to Ron 'Gold' Paul (interestingly in the same speech Bernanke noted that "people know that inflation erodes the real value of the government's
“Too much money chasing too few goods” – a basic, monetarist definition of inflation. In the long run, inflation is generally believed to be a monetary phenomenon, i.e. it is attributed to growth in the supply of money. While in the short and medium term it is influenced by the relative elasticity of wages, prices and interest rates. The question of whether the short-term effects last long enough to be important is the central topic of debate between the Monetarist and Keynesian schools.
Gold Gold was up $12.50 to $958.70 per ounce in trading in New York yesterday and silver surged another 54 cents to $19.20 per ounce. In Asian and early European trading, gold and silver remain well bid and have consolidated near these new respective record and 27 year high levels.
Gold Gold was up $8.70 to $946.10 per ounce in trading in New York on Friday and silver surged 58 cents to $18.66 per ounce. Gold particularly continued to surge in Asian and early European trading. Gold also surged in British pounds and euro. The London AM Fix at 1030 GMT this morning was at $958.75 and gold fixed at new record highs in most major currencies - at£481.62 and €636.32. The latest mooted IMF possible gold sale story was rightly treated with disdain by the markets and gold has rallied on the old reliables of surging oil and a sharply falling dollar.
Gold Gold was down $7.30 to $937.40 per ounce in trading in New York on Friday but silver was up 10 cents to $18.08 per ounce. Gold continued to weaken in Asia but has strengthened somewhat in early European trading and is trading at $934.10 per ounce. Another mooted IMF gold proposal (more below) may have led some weak longs to liquidate positions yesterday. But after recent week’s surge in gold and last week’s sharp (4.5%) increase in the price of gold, the market was overbought in the short term and ripe for a correction. It was interesting that silver has remained strong despite gold’s less than 1% sell off.
Mark Twain said; “Buy land, they’re not making any more of it” One question I am repeatedly asked is this: “which is a better investment, Property or the Stockmarket”. As with so many things in life, the answer is “it depends”. I have to agree with Mark Twain’s observation. Land is a finite resource, and we live on an Island. You don’t need a PHD in stating the obvious to realise that an investment in land or property should, over time, appreciate. Property isn’t a bad investment.
CNBC conducted an Interview with Stephen Flood, director of Gold Investments, this morning. How High Can Gold Go? "Gold is doing exactly what it should do in this market: it is reacting to risk.
Gold Gold was down $1 to $944.70 per ounce in trading in New York on Friday but silver was up 10 cents to $18.00 per ounce. Gold rose close to new nominal record highs in early European trading ($951.90) and silver rose to new 27 year highs ($18.15). Last week gold was up by more than 4.5% (more than $40) as fears regarding burgeoning inflation and indeed stagflation began to permeate financial markets. Silver was even stronger and was up by 5% on the week. Gold remains near new record nominal highs in British pounds and euro. The London AM Fix at 1030 GMT this morning was at $947.50. Gold fixed near new record highs at £482.26 and €639.77.
And does it matter? The foundation of Modern Portfolio Theory was a 1952 paper, “Portfolio Selection” by Dr Harry Markowitz in which he established a theory explaining the best way for an investor to choose a portfolio. Modern Portfolio Theory is of such fundamental importance in investing that the economists that formulated the theory received the Nobel Prize in Economic Science in 1990. Asset allocation involves dividing an investment portfolio among different asset categories such as equities, commodities, fixed interest, cash, property and the process of establishing which mix of assets to use, is largely determined by investment objectives, time horizon and tolerance to risk.