Over the last year it has been almost impossible to read any financial publication that has not been advocating that private investors should be holding some gold, either in bullion, mining stocks or gold funds in their portfolios – no doubt this position will be reinforced due to the dramatic rise in gold prices in the last few weeks.
The popular percentage that is reeled out is usually around 5%. Apparently this is going to introduce some form of security to your portfolio. Give me a break, how ludicrous is that arithmetic? When disaster strikes, how is 5% going to balance out the 95% that is going down the drain? They are also making the assumption that gold funds are not going to head south with the rest of your portfolio. It is just a complete nonsense and not very constructive. I am reminded that a bus station is where a bus stops, a train station is where a train stops, and a financial commentator’s desk is called a work station.
Up-to-date data is the best security that any investor should need. Then being `active` with this information can protect the `downside` as well as improving the `upside` for your portfolio. At Saltydog we have been pointing out the benefits of holding four particular property funds if you are looking for security. These funds are the Standard Life UK Property Fund, Aberdeen Property Trust, M&G Property Portfolio and the Threadneedle UK Property Trust. As you can see from the graph below these particular funds have been stepping up month after month for the last eighteen months just like clockwork, regardless of the volatility in the market.
What is there not to like about making a 12% annual gain in this fashion? The obvious question this raises is, how long will they continue to perform in this fashion? The answer is, who knows. But as long as you keep in touch with the numbers you will be able to make the changes when it becomes necessary.
Now we come to the suggestion that our wealth and security would have been improved over a similar period by holding a small percentage of gold in whatever fashion. On the graph below are two funds, WAY Charteris Gold & Precious Metals and Investec Global Gold, as well as a physical gold exchange traded commodity fund. Well it does not require much discussion does it?
At Saltydog we are able to come to our own decisions because we are working with up-to-date week by week information. That is our security. Not for us decisions based on what happened three, two, and one year ago, or what is being predicted for the future. We also have our own money in the demonstration portfolios that we operate. Going back to all these financial commentaries, I was always told not to ask directions from somebody who has not been where you are going!
To find out more about the service we provide, and the 2 month free trial that we offer to all new members, go to our website www.saltydoginvestor.com