http://au.pfinance.yahoo.com/our-experts/david-koch/article/-/15125022/gold-buyers-guide/ Gold buyer's guide October 22, 2012, 11:24 am David Koch Yahoo!7 Given this buoyant bullion market, what are the investment options for those looking for some golden times? With a 27-year career as one of Australia's leading finance journalists and commentators, David Koch has been voted by his peers as one of the ten most influential people of all time in the Australian financial services industry. Gold bulls are back in the ring with some of the world's biggest money managers arguing the only way for the precious metal is up. It makes sense to ask that with the brightest financial brains getting into gold, is it time you did too? First of all, let's look at the factors sending the gold price higher. The biggest driver this year, and for the past four years, has been money printing in the United States. Because the US dollar is traditionally a safe haven currency, printing more US dollars devalues the currency and forces investors to look elsewhere to park their cash. That parking space is often in gold. The effect of this is evidenced by a whopping 70% appreciation in the gold price between the start of the first round of Quantitative Easing in 2008 and the end of QE2 in June this year. Gold bugs say the fact the latest QE3 round of money printing in the US is limitless will only drive gold higher. Uncertainty about where the world economy is headed is another big plus for the gold price as investors pull money out of financial markets and seek safer investments. And the investors making this move aren't just hedge funds and high net worth individuals, but everyone from retirees to central banks. In fact, after the world's central banks, Indian households are the second biggest buyers of gold in the world. Other factors favouring future price rises of the precious metal include low interest rates, low inflation, the upcoming gold rich Indian wedding season and a glistening Chinese New Year after that. But of course there are detractors too. The sceptics of investing in gold, the most prominent being legendary investor Warren Buffet, provide a number a reasons not to invest in the metal. They point out that it doesn't have any practical use so it's never depleted, doesn't generate any income and only appreciates in price because of speculation. Warren Buffet says it's a valueless asset and observes that "bubbles blown large enough inevitably pop." And going by his track record he could be right. But despite its detractors gold remains a strong, albeit speculative, store of value and will continue to be so until the wider investment world decides otherwise. Until then, all indicators appear ripe for an appreciation. So given this buoyant bullion market, what investment options are there? First of all, you can go out and buy bars of gold. It's less risky than a share market investment but does come with the cost of physically holding it by way of storage and insurance expenses. A better bet for buying physical bullion is through the Perth Mint, which sells certificates of claim over their gold. This has no holding costs attached to it and conversion into a gold bar is guaranteed by the WA government. At the other end of the spectrum is buying shares in a listed gold company. This way you're exposed to a much larger quantity of gold so your investment will move by a greater amount with gold price movements than a physical investment in a small amount of gold would. However by buying shares in a gold company you're exposed to additional business risks like debt, production and management troubles. These risks are always magnified in a shaky share market like the one we've witnessing over the last couple of days. Not taken by either of these options? Well there is a middle ground in exchange traded funds (ETFs) that invest in physical gold for a small management fee. This way you get exposure to gold bullion without having to store the stuff or wear the risks of a business out there digging it up. As with most investments in gold, ETFs are still exposed to currency risk as the global gold market deals in US dollars. Although one exception is ASX listed BetaShares Gold Bullion Fund, which is hedged against currency movements. This currency risk is an important consideration in an investment in gold. You need to either look for products or producers that hedge against currency movements, or be of the view that the Aussie dollar will only decline against the US from here, thereby increasing the local value of your gold holding. But the direction of the dollar is another investment story altogether, and just as speculative. Today we're talking gold. As always consult your financial advisor before galloping into any gold rush.
ahhh $#*&^%* he had to do it grrr, Oh well at least this ^ was in there to throw a spanner into the works Very worrying development
Despite the anticipated Kochie indicator signalling a top, this looks more like he's hedging his bets as being an informed analyst rather than an outright recommendation.
So maybe a top signal would be when financial advisers start recommending PMs. My top signal was when a certain relative agreed that gold was a good investment. That happened a few months ago, so I know the top can't be too far off. Maybe 1-2 years?
This is just a first sign of what's to come. Like a tsunami, the first warning is an unusual tide, followed by an unstoppable wall of water. If you know the warning signs, you have some time to get your house in order before you run for the hills.
Luckily this was a written article.... the "investors" we should be concerned about don't read financial articles...even those written by Kochie. They have to have the message shoved down their throats. It won't be until he's spoken bout it at leangth at least 3 times that we should start to think about 'bubbles'.
Ok, which one of you did it!? Or which member is the real slim kochie? I bet he is surfing SS as we speak?! Hi Kochie! Wana buy our Gold?!
Influential doesn't mean he is right or have any comment on the sub-set of people he is influencing. End of survey comment: Well, of course he is influential - he is on telly!
Same goes for Cramer in the US. He's influential, doesn't mean he's correct. He's caused more dollars to be handed from the dumb public and into the hands of canny brokers & investment houses than anyone in history. Yet because he's on TV, the 'public' listen to him and do what he recommends.
But isn't that the point exactly? I'm getting worried because the likes of Kochie are setting up the sheep to be fleeced. Seems prudent to be doing the opposite of what he recommends... My personal forecast [made at the beginning of the year with gold at $1550 ] had gold making a top at $2000 early next year and $1750 or so by end 2013. There's also a significant chance of seeing gold $2400 by end 2013 if the inflationary / debasement scenario kicks in; it's just too difficult to tell right now. But my reading of this news is we still got at least 6 months to go for this bull. When we get to the end of 6 months, I will reevaluate.
Is anyone here actually really feeling the top might be in with Kochie on board. I know most of you mock his analysis......but who is actually going to look at selling as a result.? I've read numerous times in the past, "I'll know we're in a bubble when Kochie starts spruiking gold."
Don't worry next week it will be sell gold and buy government bonds. I have been singularly unimpressed with the Australian talking heads and Koch is one of the biggest. He sets himself as being expert in many fields as most of these TV personalities do. Although I have been reading financial books for years I don't consider myself even an amateur. My expertise lies elsewhere and when these guys like Koch venture into my area of expertise it is appalling to see how misguided and poor their opinion is. Why should their financial knowledge be any better. Danger Will Robinson.
That's if this is a bull kenny - if there is total economic collapse, then the bubble may never burst. Sound advice though to reevaluate in 6 months.
David Koch is what I consider a mainstream economist. That is, he'll simply ride the bow of whatever economic wave is currently riding through and guide the average pleb into that market. He seems like a genius to the average idiot who has no idea what they're doing in finance. But let's be honest, telling people today to 'buy gold' is hardly the mark of an 'on the edge' market commentator. Stackers have been advising this for years and what's more, his commentary on why you should buy gold skirts around many of the deeper, more fundamental issues of the day. Don't worry though, tomorrow he'll go right back to telling you to buy stocks, shares and property once more. Personally, Koch annoys the living shit out of me. Comes across as a song and dance man IMHO and whilst not as bad as Jim Kramer, he definitely has a 'don't ask questions and just trust me' vibe about him.
