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Gold, Feel The Rush


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Ezine No4

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Gold, Feel The Rush

  1. 1. Gareth Horsfall Mr +39 333 6492356 (w) Viale Trastevere, 227 Rome (RM) 00153 Italy GOLD! Feel the rush. The title of the e-zine may not resonate with you when only today the world stock markets have been shaken with the unrest in Egypt, and possible spread of disturbances to other areas in the Middle East. So why would I write about Gold being a bad investment when it increased in value on the back of this same news, and, in addition, I have written in these e-zines many times before that more volatility lies ahead?The problem, the way I understand it, is that Gold is a natural safe haven for investment purposesin times of market volatility, political and social unrest. But with Gold at nearly $1400 a troyounce, it is not what I would call an "investment". An investment is something that you buy nearits true value. The manufacturing cost of Gold is near $450 -$500 an ounce so there is no valuein it as a long term investment. What you have is a speculative momentum.WRONG?!Yes, I could be wrong. The worlds economy could continue headlong into another financialcrisis, and the USA might not reduce its $1.48 trillion deficit and its economy go into permanentdecline. However, like any speculative investment, gold can turn the other way just assuddenly. It may fall just quickly as hedge fund managers can dispose of it. It is as easy as theclick of a mouse.A PART OF MY PORTFOLIOShould you dismiss Gold totally in your portfolio? Definitely not and you may want to allocate 5-10% to Gold. But bear the following in mind: If Gold is performing very well then the other assets
  2. 2. in your portfolio are probably not doing quite so well. Therefore, for all our sakes, lets hope theshine comes off Gold pretty soon.Locking in those gainsRe-balancing your portfolio is a technique that will save yourneck...and possibly your heart!Portfolio re-balancing is one of the most misunderstood conceptsfor individual investors. The very idea of selling some of an assetthat has performed well, and reinvesting the proceeds in anasset that has performed poorly just seems wrong.However, it should be one of the most widely followed rules for every single individual investor.Institutional investors re-balance religiously and wouldnt dream of not doing so. This could beone of the reasons why they routinely outperform individuals year after year.Re-balancing is simply the process of returning the weightings of ones portfolio of assets to theoriginal allocation. For example, if your portfolios proportion of shares has grown and become toolarge for your intended preference to investment risk, you might re-balance by selling someshares and putting it into cash or bonds.Making these adjustments can make all the difference between complete financial success anddismal failure. 24 hours in a day Time! How I wish I could buy some more at the moment. There never seems to be enough hours in the day to do everything you want to do. But I know how important it is to take time out for yourself and concentrate on the financial matters, every now and again. As always, feel free to get in touch if you have any questions,would like more information or you would just like an update on your finances.DisclaimerThe views expressed here are my own. They are not necessarily shared by AES International.They are subject to change at any time based on market and other conditions. This is not an offeror solicitation for the purchase or sale of any security and should not be construed as such.References to specific securities are for illustrative or informational purposes only and are not
  3. 3. intended to be, and should not be interpreted as, recommendations to purchase or sell suchsecurities.