Tag Archives: gold

That was 2013

With 2013 behind us, and the New Year stretching out ahead, time for a look back at the experience of last year and the possibilities for 2014. I think that it is fair to say that last year was quite a successful one for investment markets. The FTSE100 closed up 14.4%, but with the addition of dividends, this rises to 18.7%. On a similar ‘total returns’ basis, the FTSE250 ended up 32.3% and the All Share, 20.8%. All very creditable, especially when compared to a static Bank Base Rate of 0.5% and the best of the High Street saving accounts struggling to return as much as a couple of percent.
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Unknown Unknowns

As we start to settle into the New Year, and wish each other well for 2012, it is easy – when minds wander – to wonder what might happen over the next 12 months. The last year was full of uncertainty, and it seems there is no reason to think that this year will be any different. As far as financial matters are concerned, we are no more settled than we were last January, and within reason, anything could happen. Who would have imagined the changes that have occurred in the Middle East, for instance?
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Gentleman Callers

Beryl Webster and Liz Siddall discuss their gentlemen callers in The Pensioner, the Journal of the Brighton & Hove Pensioners’ Forum

Did you know that we old folk are worth a fortune?

We have silver in our hair, gold in our teeth, stones in kidneys, lead in our feet and gas in our stomachs. I have become older since I saw you last and a few changes have come into my life. Frankly, I have become a frivolous old woman. I am seeing at least six gentlemen every day! As soon as I wake up Will Power helps me out of bed, then I go to see Jimmy Riddle and then it’s time to breakfast with Mr Kellog, followed closely by the refreshing company of Mr Tetley or my other friend, who I know by his initials, PG.

Then someone comes I don’t like, Arthur Itis – he knows he’s not welcome, but he insists on being here and, what’s more, he stays for the rest of the day. Even then, he doesn’t like to stay in one place, so he takes me from joint to joint. After such a hectic day I am glad to get to bed, with Johnny Walker – what a hectic life.

Oh yes, I am now flirting with Al Zheimer! The vicar came to call the other day and said that at my age I should be thinking about the here after. So, I told him that I did – all the time. For no matter where I am, the kitchen, the sitting room or the garden; I ask myself, “Now, what am I here after?”

Crash, Bang, Whoosh!

As I sit down to write this article, it is the evening of 5th November, and beyond the window, all manner of crashes, flashes and bangs fill the air. Some investments seem to have been a bit like that in the last six months or so. Some meteoric rises that look like they will never end, some flashes of brilliance that have been sinking, ever so slowly, and, a little longer ago, Lehman Brothers, who just went bang! I am minded of my youth, and the likes of ‘Jumping Jacks’ which would jump erratically, this way and that, with no-one knowing which way they would go next.

I think markets may be in a ‘Jumping Jack’ phase at the moment! Then, there was the ‘Catherine Wheel’ that needed to be nailed to a tree or fence or something nice and woody: pinned too hard, and it would spin slowly, or not at all; too loosely and it would whoosh around at a frantic pace then fly off at a tangent and die. When the economic nail is just right in the world tree, then markets spin along – in their cycles – just as we like them. The current ‘loose nail’ of low interest rates was supposed to help things get spinning, and did at first, but it seems like the gunpowder is a bit damp now, and after an early surge, things haven’t really started firing up again. Some time next year, things may start to burn, then possibly overheat again, and the Government of the day may start to nail the economy a little more tightly, by raising interest rates. We shall see.

Fireworks theme over, time to focus on what has done well, and might do well in the future. Now that there has been a rally in many traditional asset classes, many people are looking for the potential opportunities going forward. Something that fits into both the excellent past performer, and the possible star of the future, is gold. The price of gold has increased by something of the order of 50% in the last year, and one of my favourite funds is up by 85% over that period. Many may say that it is therefore time to sell, but I have seen comments in the last week, suggesting that the gold price could increase by another 50% in the next 12 months! If stock markets fall, then gold has been a traditional place of safety. If world economies take off, then the demand for gold – for industrial uses or for jewellery – could take off too, fuelling price rises. In that case, so too would the demand for commodities, which could continue the bull run in their prices, that started just under a year ago.

Investing in timberOne last favourite of mine, which ticks the ‘alternative asset’ box, and also that of an ethical and environmental investment, is forestry. There has been a reasonably steady demand for timber, and, depending on the end use, returns have generally been between 5% and 8%. There are several funds that enable investors with average means to get some exposure to this asset class, thereby spreading their investment risk, and purchasing assets that are growing in a literal sense.

Finally, some folk extol the virtues of fine wine, as an investment. But in the light of the forthcoming festive season, I can think of a better use. Until next year, cheers, and have a happy and peaceful time.

David Foot