As discussed elsewhere on this forum, funds of any kind (with one or two exceptions such as a commodities or gold fund) seem a very poor investment in the current economic climate. Just a moment of logical thinking is enough to realize that you don?t really want to be investing in something where the price is at record highs, which is the case with many stock markets around the world. Add to that, even during this current unprecedented bull market, if you had invested a few years back, I read an article the other day which said that the majority of fund managers fail to beat a simple index tracker fund, which makes you wonder what the hell these overpaid managers are paid for.
Save yourself the bother of trying to figure out what to invest in and just buy gold. Although it has had a good run recently, it?s only really just getting started if we look longer term, say 10 years. If you pay attention to the news, you will realise that there is a constant stream of news about the cost of this and that rising in price, which probably chimes with your own experience. If you piece it together, you will realize that inflation is gradually spiralling out of control, nothing like the rosy economic picture painted by govt and most pundits. Interest rates are going to rise dramatically and there?ll be an awful lot of pain in the coming year or two.
Buying gold is as simple as ordering something from Amazon. Ideally, the best way to buy it is to physically buy gold coins and stash it away somewhere safe but because of security issues, you might want to consider holding some gold shares as well. Take a look at these two links. For physical gold: http://www.taxfreegold.co.uk/ For gold shares: http://streettracksgoldshares.com/
Gold has pretty much an inverse correlation to the US dollar. Get this straight: you?re chasing a few % point return on your portfolio while the dollar value of that portfolio has lost 40-50% buying power in the last 5 years alone, and will continue to do so because of the Mickey Mouse inflationary monetary policies adopted by the US govt (and virtually every govt in the world). Which leaves gold with only one direction to go. You hear from some pundits about gold hitting $1000, but imo, if we were to see a 1929 style crash (which is inevitable over time), coupled with the very real threats of world wars, rising terrorism, bird flu, the looming energy crisis and so on, and if panic buying hit gold and it appreciated the 2000+% it did in the 1970s, then we might see it hit over $6000 and beyond; in no way implausible. That?s when physical gold comes into its own as paper money goes off into la-la territory. In the 1930s, there were signs outside shops that read: No money? No problem. We take anything.
You are good to buy gold until the day mainstream media and your taxi driver discuss the relative merits of kruggerands vs sovereigns, or something like that, which won't be anytime soon. Start accumulating now.