How To Add Gold To Your Portfolio

By Robb Engen | June 22, 2011 |

Gold is becoming increasingly more popular as an investment and prices continue to climb to new heights.  With growing debt concerns across the globe, particularly in the United States, some investors are looking to invest in gold as a hedge against the next economic crisis.

As a value investor I will generally steer clear of any asset class that has reached a 52-week high, let alone one that is at an all-time high.  However, with global currencies under severe pressure due to massive government deficits and interest rates remaining at record lows, investors may be wise to allocate a portion of their investment portfolio to gold.

If you are looking for information on how to invest in gold, there are a number of different options to choose from:

Invest in Gold Stocks

The Canadian landscape is rich in resources and gold mining companies make up a large portion of the TSX 60.  By purchasing a Canadian equity index fund you are naturally exposing your investment portfolio to gold.

Investors can also purchase the shares of individual gold mining companies like Kinross (K), Barrick (ABX), and Goldcorp (G).  All three of these gold mining stocks are rated strong buys from stock analysts.  If the price of gold rises, it should be expected that the profits and stock price of these companies should rise along with it.

Invest in Gold Exchange-traded Funds

Exchange-traded Funds, or ETF’s, are bought and sold on the major stock markets just like common shares.

The Claymore Gold Bullion ETF (CGL) holds physical gold bullion and is designed to replicate the performance of the price of gold bullion.

Horizon BetaPro’s COMEX Gold ETF (HUG) looks for investment results with gold futures contracts, or paper gold.  Any U.S. dollar gains or losses will be hedged back to Canadian dollars, which is important because it offers no protection for Canadian investors against a falling U.S. currency.

iShares CDN Gold Sector Index Fund (XGD) essentially tracks the S&P/TSX Global Gold Index.  With management fees of 0.55%, XGD looks like a solid alternative to speculating on individual gold mining companies.

Invest in Gold Coins and Gold Bars

If you are wondering how to invest your money in physical gold bullion, investors can do so by purchasing gold coins or gold bars.

The Canadian Gold Maple Leaf produced by the Royal Mint is the official bullion gold coin of Canada.  They produce a wide variety of 99.99% pure gold coins ranging from 1/20 to 1 ounce.  In 2007, the Royal Mint produced the world’s first million dollar coin, which weighed 100 kilograms (3,215 troy ounces).  Incredibly, the Mint has sold 5 of these coins to investors from around the world.

Gold bars are the most traditional way to invest in gold.  They can be purchased in a variety of weights and sizes ranging from one gram to 400 troy ounces.  In Canada investors can buy gold bars through ScotiaMocatta, the global bullion banking division of ScotiaBank.

Buying and selling gold is subject to an administration fee of 0.25% for any transaction under $5,000.  Gold and other precious metals are exempt from GST and HST.

Is it the Right Time to Invest in Gold?

As you can see, there are a number of different ways for investors to buy gold.  In a period of economic uncertainty, gold definitely has a place in any investors asset allocation mix.  Your allocation of gold will vary depending on how optimistic or pessimistic you are on the global economy.

There are plenty of opinions on the future of investing in gold.  The bears are sceptical and see a gold-bubble that’s about to burst while the bulls view gold as a safe haven and paint a doomsday scenario of collapsing economies and falling currencies.

Gold is an intriguing investment option to me, but I would only consider adding a small percentage to my investment portfolio.  And given the record high gold prices that we are seeing, I’d prefer to sit on the sidelines and wait for a market correction.

Now that you know how to invest in gold, would you consider adding gold to your portfolio?  Is this a good time to buy gold?

Investing In The Future

By Boomer | June 21, 2011 |

Demographics play an important role in our nation’s economy.  It’s no secret that the boomer generation has changed the economy, driven housing and other markets and transformed lifestyles.  As the first boomers reach their retirement age what lies ahead?  When you consider investing in the future, the following are some industries that are sure to grow in the next twenty to thirty years in response to this maturing population.

Financial Services

As people age their financial priorities change, moving from debt to asset management.  Not only have higher earnings enabled the accumulation of assets, many boomers will be inheriting their parents’ assets.  People acquiring large sums of money in one lump sum need advice to help them invest it wisely.  As a result, banks, financial planners, mutual fund companies and investment dealers should show major growth.

Insurance companies should also benefit from increases in insurance on valuables, extended care and travel insurance to name a few.

Health Care

An older population needs more health care.  The reduction in funds to universal health care should open the doors to more private industry to provide services previously offered in hospitals.  Due to shorter hospital stays the demand for home care, hospital follow-up, caregivers as well as meal delivery and routine house cleaning and maintenance offer a lot of opportunities if the services can be delivered profitably.

Drug companies are a promising investment for long-term growth as the need for medication increases as the population ages.  Drugs and medical devices that can reduce the need for surgery will also find a huge market.

Real Estate

Real estate in the form of vacation properties, fifty-plus condos, retirement villages, aging-in-place complexes and nursing homes will increase.

Leisure and Recreation

Gardening has become popular and will continue to be.  It is a great business as gardeners need a constant supply of books, magazines, tools, soil, fertilizer, plants and seeds to name a few.  There is also a demand for expert advice and labour.

Upmarket travel will be popular.  Seniors will want something exclusive and exciting that will still offer comfort and personalized service.  The travel business is highly competitive and if a company can deliver good quality to this niche market they will show good profits.

Gambling is one of the fastest growing activities and gamblers tend to be people over fifty who have enough discretionary income to afford this pastime.  Find some sinful stocks to invest in to take advantage of this trend.

The home fitness industry should grow.  Older people would rather buy their own equipment than frequent a fitness club (that’s for the younger crowd).

Shopping

Retail stores for the older generation will stress quality and service primarily rather than the lowest prices.  People will pay more for added value whether in a small store or large franchise.  Personal shoppers, home delivery and set up, and a calm, friendly atmosphere will appeal to these customers.

Any products that will make life easier and are not too complicated to set up will do well.  Also, wellness and anti-aging products for this group who thought they would always stay young.

Investing In The Future

There are a lot of companies that could be poised to take advantage of the maturing of baby boomers.  When considering how to invest your money, choose stocks in well-managed companies that will jump at the opportunities that become available.

There could be short-term volatility determined by other world events but overall these areas should be booming in the long run.

Networking To Advance Your Career

By Robb Engen | June 20, 2011 |

I had the opportunity to attend a conference for professionals and interns in my industry last week.  For the interns and new staff the conference showcased how to use networking to advance your career.

It was my first time attending this annual event and it was a terrific learning opportunity to share ideas and best practices with like-minded individuals who are in similar roles at other organizations.

There were over 2,100 people attending this conference and for many industry veterans it was a chance to connect with old friends and visit with their colleagues.  Here are a few of the tips they picked up for succesful networking:

Social Networking

Using social media tools like Facebook, Twitter and LinkedIn is a great way to follow people in your industry and connect with them.  Twitter is probably the easiest social networking tool to use, since you can follow anyone and jump into a conversation if you have something valuable to add.  Once you develop some industry connections on Twitter you can begin to move those relationships to the more permission-based social networks like Facebook and LinkedIn.

Remember to clean up your personal social networking accounts by removing potentially embarrassing photos and video, and be careful what you are saying casually to your friends online since most of your conversations are available for public viewing.

Build Friendships

Networking is not a competition to see who can collect the most business cards at a conference or tradeshow event.  Listen carefully as you meet others to find common ground and develop true friendships.  Those friendships will last a lot longer than a business card in your Rolodex, and they can become more valuable as you advance your career.

Elevator Pitch

The elevator pitch means you can deliver your key message in the time span of an elevator ride, which can be anywhere from 30 seconds to two minutes.  At a networking event with hundreds, or even thousands, of people in attendance you need to set yourself apart from the other folks in the room.

Provide an interesting fact about yourself that becomes a humanizing element and makes you more memorable.  A well delivered elevator pitch can be used to sell an idea or to sell yourself, so it should include key differentiators and skills that you can offer.

Tips for Talking to Strangers

Trying to connect with new people at a networking event can be one of the most intimidating situations for a young professional trying to advance their career.  In a social setting you should try and find a common bond with the person you are talking to.  Common bonds include family, work, and special interest topics that bring people together like sports and current events.

Good starter questions are, “What do you like to do when you have some free time?” or “Where is your favourite place to visit on vacation?”  These questions can give you a glimpse into their life without having to hear their entire life story.  The more you find out the more it can lead to additional conversations.  Remember that in order to be a good conversationalist you should always put the other person first, come up with thoughtful “on the fly” questions relative to their interests, and be a great listener.

Have a Networking Plan

Developing great networking skills doesn’t just mean showing up to the industry events and exchanging business cards.  After meeting someone new, make sure to send them an email or a handwritten note with your business card to help continue the conversation.  A good time to reach out to your network is after significant accomplishments, disappointing or tragic news, or during the holidays.

Related: How A Career Change Improved My Life

Have a networking plan that includes meeting new people, developing those relationships, and regularly following up with existing contacts.  Focus on giving and connecting with others before asking for something in exchange.  People want to do business with people they like, respect and trust.

Networking is a great way to advance your career if you can do these things effectively.  Become a resource for others and the benefits will follow you down the road.

Do you have any networking tips for getting ahead in your industry?

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