Dow Jones and FTSE Climb to New Highs

Or so goes the BBC headline today.

And so great eh, the world is saved?  Hmm I very much doubt that it is.  What has fundamentally changed?  Nothing, except the worldwide currency creation continues.  That more than anything else - oh and some money probably exiting the bond market early before it crashes too.

I'll be the first to admit that I actually took advantage of some favourable investment trust discounts during December, especially for my pension (for disclosure, some of those trusts and their prevailing discounts when bought : JP Morgan UK Smaller 25%, Japanese Smaller 18%, European Smaller 18%, Henderson Opportunities 25%).  So, yes, I am counting the paper gains too.  Nice.  Or it will be if I find the right time to exit.  I don't think it's quite yet, as the aforementioned trusts are all now on 15% discounts, so still feels to me like there is some gain up to May.

Sell in May and Go Away

If the stock market hasn't tanked by then and the trust discounts have narrowed to sub-10%, I will definitely cash out of a lot of these.  I really feel this rise is unexpected (to me, but there again I don't go to Davos or Devil's island).

What to Buy Instead?

Obviously, top up on your gold and silver holdings.  I will start buying gold again soon after a 3 year pause.  Especially to minimise my exposure to the British Pound.  I figure I can convert back later now and make a profit on that too.

Golden Prospect Investment Trust is my favourite.  This invests in gold and silver miners and has plummeted from a premium to a 14% discount in about 2-3 months.  What amazing value!

Fidelity Japanese Investment trust also sits on a 16% discount.  Yes, that's quite a way out there, but in a world of such financial uncertainty, it might make weird sense to have the most stock market exposure to the very market that has least participated in the rallies.  especially when the Yen is still, weirdly, considered a sound currency.

A Fresh look at Gold and Silver Investing

It's been about 7 years since I started this blog and, being honest, I have not updated it as much as I should have since I find myself thinking about Gold and Silver daily.  To help refresh my thoughts, I have decided to publish my book How to Invest in Gold and Silver online for FREE.

I know this is a big decision which could deny me a few royalties, but I think it's worth doing to review what was written and look ahead to the next few years.

You can read How to Invest in Gold and Silver for FREE here.

Precious Metal Mining Shares to Watch

Fresnillo is the world's largest silver producer and has two things going for it as far as I can see (1) It is in Mexico, the only country left in the world that still uses silver in it's currency and (2) It's next to the USA, which is still a huge consumer of silver and where a lot of the world's silver, both paper and the real stuff is transacted, through COMEX.

Goldmoney Special Offer - UNMISSABLE

I have for a long time been a great fan of Goldmoney and right now they are doing a rather unmissable special offer.

Until January 11th you can invest in gold or silver in their Singapore vault and pay a reduced commission of only 1.99% for silver and 0.98% for Gold.

The way I see it, this has several benefits :-

- For new gold investors, it provides the opportunity to take a gold and/or silver stake with one of the most reputable providers out there at a reduced price.

- For established gold investors, it provides the opportunity to diversify your holdings into a new location. This is something most investors greatly advise. Especially when the location is one of the world's new financial centres, with none of the baggage associated with New York, the City of London or Switzerland. Three countries whose reputation for financial freedom is becoming somewhat tarnished lately.

- Singapore definitely feels like a safe location to me and when one of the world's greatest investors, Jim Rogers decides it's the best place for him to make his home, you have to take notice. You can check out their offer and open an account here. Fill your boots!

Gold is a Risky Investment

I have not updated this blog in a while, but thought it was worth reminding people of something that has not been true for many years - Gold is a Risky Investment. Now, this might seem ridiculous, especially considering I will further quantify it by saying I believe in the long-term fundamentals, international inflation prospects of Western nations and the will of government to do all it can to save it’s own skin at the expense of your life savings. Given that last factor, especially, nothing will do as well in the next 10 years as gold…except maybe silver…and food…but that is for another day.

However, look at where the price of gold is now. No-one should be surprised to invest and see it fall, even short term, by 40-50% back to the 900$ level. What am I basing this on? It is exactly what happened in 1976, when it fell from 200$ to 100$, even as the long term trend was for gold to move another 5 times higher in 4 years. 1976 must have been a very hard year to sit there and talk to your friends about gold and reconcile the long term belief with what was really happening in the market.

The point I want to make is that anything is a risk, but gold is much more of a risk at 1800$ than it was at 400$, when it really could not have fallen much further at all.

What can you do about it, even if you want to invest in gold or silver now? Invest monthly in small amounts, via physical bullion ETFs or the internet gold sites such as BullionVault or Goldmoney and promise within yourself to keep those monthly savings going, after all, falling prices mean you actually buy more ounces each month!

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SUCCESSFUL TAX-FREE ISA INVESTING / HOW TO INVEST IN GOLD AND SILVER

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Valid until 19th Feb 2012. Great offer from a great website.

InvestGold India

India has long been reknowned as the last gold standard nation, where, perhaps, the memory of some long-ago fiat money crisis is so ingrained into the population, that they still perceive gold as the ultimate store of value. With this in mind, Invest Gold has now launched an Indian version of it's site, which can be seen at InvestGold India.