3 investment analysis: NASDAQ, Gold, Dollar

We have entered the Christmas season which is usually typical by light trading activities and volumes. We have more time now for our analysis and also it is the the time for creating or adjusting your investing strategies and setting targets for the year 2010.

Today I have 3 interesting video analysis produced by Adam Hewison. Unbeatable NASDAQ, trading volatility with Gold and investing in US dollar.

1. Unlike Dow Jones Industrial Average and S&P 500, NASDAQ continues to reach all time highs every week. This video analysis for NASDAQ show if there is still support for such a growth and where we are heading.



2. Second analysis provides insight in gold price and outlook for coming months. We have experienced parabolic growth and deep fall from highs.

3. Greenback is back. US dollar sharply strengthens against major currencies after better macroeconomic readings in last months. How to invest in US dollar now?

Investing in gold with ETF.

Recently I posted article about investing in physical gold like buying coins, ingots or bricks. This time I would like to cover the other side of gold investing which is investing without keeping or owing physical gold.

One of the most common investment product that act as alternatives for those who want to invest in gold is ETF, or exchange traded funds (sometimes translated as index shares). It is a form of collective investment funds with low costs, greater flexibility and transparency, and accurate monitoring of the underlying asset (index, commodity, etc.).

ETF gold are due to its properties as an ideal alternative to physical gold. Emerged as a tool for investors who want to own physical gold, but do not have it stored at home and want to have it for cheaper money. Management fee is usually less than half a percent, but to be added charges for trading broker, which may not be the cheapest.

In 2004, the WGC, in cooperation with State Street Global Advisors launched gold ETF on the New York Stock Exchange under the name of streetTRACKS Gold Shares, now called Tracks SPDR Gold (GLD). Today, this product is also traded on stock exchanges in Singapore (GLD 10US $), Tokyo (1326) and Hong Kong (2640). At present it is the most popular investment tool for investing in gold and indirectly holds more than the custody of 1 127 tonnes of gold.

Other well-known ETF are iShares COMEX Gold Trust, which determines the price based on the price of futures contracts on the COMEX commodity exchange. Traded on the New York Stock Exchange (IAU) and the Toronto Stock Exchange (IGT). The Fund currently holds 80.72 tons of gold, but in this case, there are criticisms and doubts about the quantity of gold which backed securities. The Depositary is The Bank of Nova Scotia, Canada.

Among the investors are very popular Canadian ETF Central Fund of Canada (CEF) and Central Gold Trust (GTU) traded on the New York Stock Exchange and the Toronto Stock Exchange. According to some experts are safer investment in gold than GLD. In addition to the long history of funds it is also mainly due to the simplicity and clarity of the investment strategies and fund structures as well as the need to hold all the gold at Depositary without the opportunities to lend it to third parties (at least 85% of funds must be kept in precious metals).
First appointed but also invest in silver. Currently, the ratio of the two metals is 55:42 in favor of gold and the rest is in cash. Central Gold Trust holds 396.8 thousand ounces of gold, which is 97% of its portfolio.

Here is full list of Gold ETFs with their specifications.

How to invest physically in gold

Every week gold price is reaching new highs but for many investors the peak is still well ahead. For those who believe in the long term potential of gold as inflation protection investments, is an ideal way to buy gold ingots, respectively. bricks, or investment coins. It is virtually the purest form of investment in gold, in which the investor has the physical security of tenure of the yellow metal with all advantages and disadvantages.

Purchase of ingots and bricks is a relatively simple matter, just contact the selected dealer and buy gold. There are plenty of traders offering the possibility of investing in gold ingots. Choosing the merchant will actually be the most difficult task. You get bricks or ingots from reputable manufacturers with a certificate bearing the manufacturer, punch, weight and serial number.

A good trader is also a guarantee of liquidity, as well as ensure the redemption of investment in gold. Sometimes, when redemption of gold company offers you a lower price for ingots, which are purchased from another dealer (from another manufacturer). Thus preventing speculation in prices because the difference in prices between different dealers can be significant.

Investment alternative may also be investment gold coins, which also reflect the real price of gold (plus dealer charges) and have no problem with liquidity. On the market there are several different types of issuers and are commonly available in various weights one tenth of an ounce to an ounce. Some may even be a collectible article.

Probably the most famous investment coins are South African Krugerrand, which emits since 1967. It's bigger and heavier, because it has only 22 carats, but the amount of gold is the same as for other coins. In the U.S. there are two investment coins that is American Buffalo with a 0.9999 and American Eagle which has a purity 22 carat (0.9167) like the Krugerrand. The British Britannia has content that only 22 carat gold and is the most heavy investment coin (34.05 g in one ounce version). Australian Nugget (Kangaroo respectively) and the Chinese Panda are interesting in that its appearance changes every year and are so popular among collectors. Most investment coins are issued also in the design proof and also in silver version.

Treasury inflation protected securities ETF

Right now we are globally in period of low interest rates and low inflation rate. In some economies even with deflation. What should we do when inflation will start to rise again? How to invest money when inflation is inching up?

The best investments against inflation are investing in gold, index linked bonds, national savings index linked certificates, shares and property.

I will focus more on less risky inflation protected securities like TIPS (Treasury inflation protected securities) or "linkers" (inflation indexed bonds/gilts). Coupon payments reflect rising inflation and/or interest rates. TIPS are generally one of the safest investments. It should be a part of retirement or standard portfolio for better diversification.

There are already some ETFs following TIPS indexes like iShares Barclays TIPS Bond (TIP) or SPDR Barclays Capital TIPS (IPE). Recently PIMCO launched their exchange traded funds for inflation hedging PIMCO BROAD U.S. TIP (TIPZ) and PIMCO 15+ Yr. US TIPS Index Fund (LTPZ) and PIMCO 1-5 Year US TIPS Index Fund (STPZ).

These funds protect against US inflation. International exposure provides fund SPDR DB Intl Govt Infl-Protected Bond (WIP) which access inflation protected securities in 18 countries. Around 70 % of its portfolio come from foreign developed countries and 30 % from emerging markets. Regionally holdings include securities from France, UK, Canada, Japan, Brazil, Turkey or South Africa. Contrary to US TIPS this fund offers another diversification against weakening US dollar as international bonds are in 15 different currencies.