MyMoney Online

The ups and downs of gold...

It’s been exactly 12 months since financial fitness coach, Paul Roelofse, last spoke about gold as an investment option. Here are new insights.

Gold has always been a storage of wealth. The lustre of gold has attracted investors for centuries. Over the best part of the last decade, however, it seems to have lost its shine.

Peaking at levels around $1900 and ounce a few years ago to under $1100 of late. The big question is, “Will it be the safe haven when investors take flight from the stock markets and look for what has traditionally been their storage of wealth?

There are some very good reasons to consider gold as part of your portfolio.

The ups……..

There seems to be upside. It is has turned the corner from its low level in the $1000 an ounce range a year ago, to levels above $1200 presently. That’s around a 10% growth which points to a latent appetite for the precious metal, given the low returns and high risk in the markets over the same period.

The rand value of gold improves if our currency weakens. So if you are concerned about our rand sliding further into the abyss with all the political and economic problem we are facing, then you will certainly benefit.

The downs……..

The rand tends to surprise. Just when you think it is on a path to nowhere, it turns a corner, just like of late where it strengthened from R17,00 to the dollar heading toward R13,00.

Then just when we all thought it would break into range of R12,00 it spiked back up to mid R14,00. The currency is volatile which puts the investment of gold at risk.

Gold does not provide a yield. Therefore there is no opportunity for compounding returns into the future, which is how the growth on your investment is determined.

If you buy gold in the form of coins or exchange traded funds, then you rely entirely on the price movement and the currency differential. So it boils down to the rand price of gold over time.

Do your homework and take a longer view with gold. It does look attractive at the current levels given the aversion to risk which is taking place in the markets.

Listen to the full interview below for more information...

Read more from Paul Roelofse at www.investforlife.co.za


This article first appeared on 702 : The ups and downs of gold...


Read More
'The South African stock market is massively hedged against a weak rand'

'The South African stock market is massively hedged against a weak rand'

The Money Show’s Bruce Whitfield interviews Galileo Capital Personal Financial Advisor Warren Ingram.

3 shares that’ll boost your wealth, if you buy now (by Cannon Asset Managers)

3 shares that’ll boost your wealth, if you buy now (by Cannon Asset Managers)

The Money Show’s Bruce Whitfield interviews Cannon Asset Managers Portfolio Manager Samantha Steyn.

6 tips on how to avoid overspending this festive season

6 tips on how to avoid overspending this festive season

The Money Show’s Bruce Whitfield interviews Galileo Capital Personal Financial Advisor Warren Ingram.

3 shares you’ll do well to buy this week (by Cartesian Capital)

3 shares you’ll do well to buy this week (by Cartesian Capital)

It’s Stock Pick Monday on The Money Show. Bruce Whitfield interviews Cartesian Capital CEO Anthea Gardner.

3 shares that’ll grow you wealth, right now (First Avenue Investment Management)

3 shares that’ll grow you wealth, right now (First Avenue Investment Management)

The Money Show’s Bruce Whitfield interviews investment analyst Nadim Mohamed.

The magical rule of 72.

The magical rule of 72.

Weekend Breakfast's Paul Roelofse explains how the number 72 has an uncanny ability to calculate the future value of money.

Popular articles
If you're caught driving with your phone, officials are allowed to confiscate it

If you're caught driving with your phone, officials are allowed to confiscate it

If the engine is running and you are sitting behind the wheel you are not allowed to operate your phone says W Cape's JP Smith

[WATCH] Zola Tsotsi drops bombshell about Zuma meeting at State Capture Inquiry

[WATCH] Zola Tsotsi drops bombshell about Zuma meeting at State Capture Inquiry

Former Eskom chair Zola Tsotsi’s jaw-dropping statements include Tony Gupta saying they could hire or fire Eskom board members.

SA fizzy drinks undergo "shrinkflation" to control sugar intake

SA fizzy drinks undergo "shrinkflation" to control sugar intake

Coca-Cola has reduced its 500ml "buddy" to 440ml and the traditional 330ml Coke cans will soon have a volume of just 300ml.

Mugabe threatened to dissolve Parliament hours before his resignation

Mugabe threatened to dissolve Parliament hours before his resignation

Deputy President of MDC says Mugabe's threats could not deter them from their mission to impeach him - they were determined.

What Shoprite, Checkers, Pick n Pay and Makro will offer on Black Friday

What Shoprite, Checkers, Pick n Pay and Makro will offer on Black Friday

Up for a Springboks level scrum? Instructions on how to ensure you get the deals in your inbox the moment they become known...