I have taken the plunge.
Over the last six months, I have been shoring money away to invest in something big. That sum has increased due to an unexpected windfall. I have all the investments that one is advised to make – the tax-free ISA, the pension contribution, the Friendly Society fund, the National Savings & Investments Bonds and stock market positions. So, the challenge was finding something growth driven that would make my money work its hardest. I considered the options:
Gold
Not wanting to blindly follow Mr Buffett's dislike of the shiny stuff, I wanted to do some research of my own.
Pros
Cons
The Verdict
Gold requires too much monitoring and studying – from spread betting / futures / options / mutual funds / ETFs. It also doesn’t seem to be a growth-vehicle for the long-term. So, in my portfolio, gold doesn’t seem to afford me any utility. In short, gold is something to invest in – but not right now.
Property
I’ve always seen myself as an investor in property – I just never figured it would be through the stock market. With property ETFs offering good prices, I am tempted to buy low.
Pros
Cons
The Verdict
It won’t be commercial property that I invest my money in. Again, it’s not for me at this time.
So, I have decided to do something risky and exciting with my money, I am investing in Africa through ETFs. For now, I intend to split my money between:
South(ern) Africa: Tourism
Nigeria: Banking and Oil & Gas
West Africa: Infrastructure and mid cap
North Africa (focus on Egypt): Growth large cap
I know the climate is risky - corruption, unstable government, reliance on the developed world and a penchant for import are things I have considered. I feel like if things will change, it will do so because we believed in our continent.
And, where there is money to be made, well that's just a bonus really :)
Wednesday, 30 December 2009
Investing in an Ideology
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2 comments:
I am not sold on gold AT ALL.
Just for 4 reasons:
1. No practical use of that stuff other than in vanity like jewelery. Can't use it to build spaceships.
2. Like you said: linked to the value of the dollar, because currency used to be indexed against gold in the world until they realized they didn't have enough gold to cover all the money in the world.
3. Real return of gold over a longer period (I think I heard someone say 100 years?) was 0.
4. Can't eat it. I don't know why this is important to me but ;)
Just kidding. If you can't eat it, in times of a crisis, jewelery = useless and potatoes = like gold but tastier.
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As for property, I have strong feelings about that too, but commercial real estate is interesting.
I'm investing mostly in China and Brazil. I know they're the two hotshots for this year and everyone is clamouring to invest in them... but where do a lot of our products come from? China.
And if not China, Taiwan or Malaysia, both outsourcing partners of China.
Anyhoo... just my 2 cents.
It's not going to change any time soon, and China's growth potential is incredible with the sheer number of consumers available.
Wow, didn't know about the rate of return over a more substantial period.
Lol, practical advice in times of trouble - potatoes over gold - love it.
Good advice re: China and Brazil. Someone told me a joke over Christmas about the North Pole being in China as that's where all the toys are made. Thinking about it, that's where most things are made these days.
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