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GOLD
Gold is a chemical element with the symbol Au and an atomic number of 79. Gold is a dense, soft, shiny metal and the most malleable and ductile metal known.
Gold's performance has eclipsed that of gold mining stocks this year, but gold equities now are likely to take the upper hand as the flow of cheap U.S. cash slows and miners boast juicy margins and good growth prospects.
Gold's status as a quasi-currency and safe haven has helped pushed the price of the metal up about 20 percent since the start of the year to above $1,520 an ounce, making it one of the top performing asset classes of 2011.
That compares with an 8 percent drop in the ARCA Gold Bugs index, which includes shares in some of the world's largest gold miners.
The U.S. Federal Reserve's $600 billion bond-buying program, which has kept down interest rates and the dollar; the disaster in Japan and the violence in the Middle East, which have shaken investor confidence; and evidence of sluggish U.S. growth and concerns about China have all boosted gold but dented global stocks. And gold shares have not been immune.
Now that the Fed's easing program has come to an end, Japan is recovering and China has managed to stave off some of the biggest fears about price pressures, there is some doubt that gold can keep up that strong performance.
Gold stocks, meanwhile, are supported by a gold price near record highs and may benefit from improving sentiment for equities markets. They also appear relatively cheap at the price.
Catherine Raw, who helps manage BlackRock's $4.7 billion Gold & General Fund, said the rise in the gold price has outpaced cost inflation in the industry, meaning that gold miners are likely to see their margins and their profits increase this year.
"I, as an investor, would say that in the end, given that believe the world isn't going to collapse, while there maybe a good few months of volatility left, if you're prepared to be patient, then I would see now as a very good buying opportunity," she said.
"The fundamentals of gold companies have improved, and yet their shares have fallen, and you've seen valuations now much more comparable to the rest of the mining sector. So you're not having to pay a ridiculous premium as you would have done say five or six years ago, and yet margins are growing significantly, in a way that they weren't five or six years ago," Raw added.
VALUE SHINES
Shares in Barrick Gold, the world's largest gold miner, trade at nearly 14 times anticipated earnings, while second-largest Newmont and third-largest AngloGold Ashanti trade at roughly 12 times expected earnings.
This compares with base metal producer BHP Billiton, which trades at nearly 17 times expected earnings, or Anglo American, which trades at 40 times earnings.
HSBC Global Asset Management, which recently unloaded most of its holdings of physical gold in favor of gold shares, said gold equities are two-thirds shares and one-third gold price......(by amanda Cooper)
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Gold's performance has eclipsed that of gold mining stocks this year, but gold equities now are likely to take the upper hand as the flow of cheap U.S. cash slows and miners boast juicy margins and good growth prospects.
Gold's status as a quasi-currency and safe haven has helped pushed the price of the metal up about 20 percent since the start of the year to above $1,520 an ounce, making it one of the top performing asset classes of 2011.
That compares with an 8 percent drop in the ARCA Gold Bugs index, which includes shares in some of the world's largest gold miners.
The U.S. Federal Reserve's $600 billion bond-buying program, which has kept down interest rates and the dollar; the disaster in Japan and the violence in the Middle East, which have shaken investor confidence; and evidence of sluggish U.S. growth and concerns about China have all boosted gold but dented global stocks. And gold shares have not been immune.
Now that the Fed's easing program has come to an end, Japan is recovering and China has managed to stave off some of the biggest fears about price pressures, there is some doubt that gold can keep up that strong performance.
Gold stocks, meanwhile, are supported by a gold price near record highs and may benefit from improving sentiment for equities markets. They also appear relatively cheap at the price.
Catherine Raw, who helps manage BlackRock's $4.7 billion Gold & General Fund, said the rise in the gold price has outpaced cost inflation in the industry, meaning that gold miners are likely to see their margins and their profits increase this year.
"I, as an investor, would say that in the end, given that believe the world isn't going to collapse, while there maybe a good few months of volatility left, if you're prepared to be patient, then I would see now as a very good buying opportunity," she said.
"The fundamentals of gold companies have improved, and yet their shares have fallen, and you've seen valuations now much more comparable to the rest of the mining sector. So you're not having to pay a ridiculous premium as you would have done say five or six years ago, and yet margins are growing significantly, in a way that they weren't five or six years ago," Raw added.
VALUE SHINES
Shares in Barrick Gold, the world's largest gold miner, trade at nearly 14 times anticipated earnings, while second-largest Newmont and third-largest AngloGold Ashanti trade at roughly 12 times expected earnings.
This compares with base metal producer BHP Billiton, which trades at nearly 17 times expected earnings, or Anglo American, which trades at 40 times earnings.
HSBC Global Asset Management, which recently unloaded most of its holdings of physical gold in favor of gold shares, said gold equities are two-thirds shares and one-third gold price......(by amanda Cooper)
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Energy stoks for 2011
Some investors buy clean energy stocks because it's the right thing to do, others because we know that the diminishing availability and increasing environmental impacts of traditional fuels will eventually force society to adopt more sustainable solutions. Cartoonist Scott Adams says we're all wrong, and we should invest in companies we hate.
Although Adams' column is meant to amuse, rather than serve as investment advice, it's funny because he touches on two very important truths about investing.
- Although a few investors can outperform the market over the long run, the vast majority can't, and no one consistently produces superior results, year in and year out. (One exception was Bernie Madoff, who was known for his unusually steady returns. We all know how that ended.)
- Investing because it makes you feel good is a fairly reliable way to get into trouble in the stock market. If you are buying a stock because it makes you feel good, you're probably not alone. All those investors buying to make themselves feel good are probably driving the stock price up beyond what the company is worth, which will mean a long term drag on returns.
Both those truths are on display as I look back on the first half performance of my annuallist of ten clean energy stocks. After three years in a row of outperforming my clean energy benchmark, my winning streak seems likely to end in 2011. So far this year, my benchmark PowerShares Clean Energy (PBW) ETF is down 13.4% for the year, while my ten picks are down considerably more, at 25.2%. Meanwhile, the broad market was up 5.2%, as reflected in the Russell 2000 index.
The pattern of losses, while in part due to bad luck, also comes from ignoring principle #2: I included too many stocks I liked, despite the fact that they were fairly expensive on conventional measures.
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The Berenstain Bears
This is a great book! It teaches about lying but in a funny way. One of the lines paraphrased says that "and they cubs told the biggest whopper ever told in Bear County." That always gets a laugh in our house - "whopper" is quite funny to a toddler! But after you explain it, it has a new meaning and really provides a way to explain lying. This book has brother and sister playing ball in the house when they're not supposed to and wind up breaking mama's favorite lamp. Then, they lie about it and lose mama's trust. After they apologize, they don't do it again but they learn that they have to regain their mother's trust in their word all over again. It's a fantastic book to teach about lying and the results thereof.
I highly recommend this book -it's read almost nightly in our house.by Carolyn,Columbus,Ohio
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I highly recommend this book -it's read almost nightly in our house.by Carolyn,Columbus,Ohio
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