# Where do you put your money? Stocks/Gold/Cash?



## Tony0202 (Sep 23, 2011)

The global markets have made it so confusing for an average investor in the past few weeks. Gold had all of a sudden become the safest and the best investment for capital appreciation.

In the last 3 days, gold has had probably the worst decline in 3 decades. US Dollar is gaining ground and some optimism coming in from Europe after the German Finance Minister making some positive statements about the Euro-Zone.

Where would you put your money in the next 6-12 months? Will it be commodities, currencies, bank deposits, corporate bonds, sovereign bonds (which country risk?), or would you prefer to keep cash under your mattress  ?

Would like to hear your perspective. I have heard/read about people making money during recession but have never seen anyone do it. If you have a story to share about opportunities during such trying times, I would love to hear.

Cheers!
Tony


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## INFAMOUS (Apr 19, 2011)

I would play with currency exchange..


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## babyg (Sep 26, 2011)

Hi, Not sure about you I was wondering about a company called deVere group International Investers, Has anyone had any dealings with them?


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## Veronica (Apr 5, 2008)

babyg said:


> Hi, Not sure about you I was wondering about a company called deVere group International Investers, Has anyone had any dealings with them?


It's a pity we have a policy not to name and shame on this forum


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## ipguy (Jul 31, 2011)

I would buy a small hotel by the sea in a nice warm place and some land to grow food and just take it easy
Where should I start looking?


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## Felixtoo2 (Jan 16, 2009)

I hear property in Libya is going cheapp these days. 

As far as investing in Gold, if you look at it as a long term investment you are unlikey to lose out.


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## Mr Rossi (May 16, 2009)

babyg said:


> Hi, Not sure about you I was wondering about a company called deVere group International Investers


This is either superb sarcasm or the worst attempt to manipulate a forum, either way I salute you.



Felixtoo2 said:


> As far as investing in Gold, if you look at it as a long term investment you are unlikey to lose out.


It's all I believe in.


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## indoMLA (Feb 6, 2011)

babyg said:


> Hi, Not sure about you I was wondering about a company called deVere group International Investers, Has anyone had any dealings with them?





Veronica said:


> It's a pity we have a policy not to name and shame on this forum


Any one heard of a company called Global Eye? These fools keep calling me relentlessly. I keep telling this fool, 'No' but he keeps on with the pitch... freakin' annoying as hell.... How do these places get your name and number? I think the banks are selling this crap to them....

To the OP's question.... invest in international stocks. Try to buy stocks in companies from the BRIC countries (especially B.I.C., I stay away from anything R.  ) Europe actually has some bargains and I am starting to look in Africa as well. Currently staying out of the UAE and other Middle Eastern countries.


On a side note... I just hit post #500.... don't we get some prize or something?


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## Kawasutra (May 2, 2011)

The safest place for my little money at the moment, is "*under my pillow*"...!
Before I give it to someone else to burn it, I burn it by myself.


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## dizzyizzy (Mar 30, 2008)

also in what currency is best to keep one's savings at the moment?


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## olsontowers (Jan 18, 2011)

Interesting quetion, and lots to consider!!

Firstly if you're looking to find a home for your cash for a short period of time a commodity is going to be a high risk approach, as would playing with exchange rates! In my view gold probably has some way further to fall, which is surprising when you consider it is usually where people run to when faced with financial uncertainty, but funds like the BlackRock GF World Gold have performed amazingly over the last 10 years with an average annualised return of upto 13.86% pa. But it is only likely to grow so much and I fear that it has reached it's pinnacle and will fall further

Cash is offering shocking returns and inflation is taking it's toll on the real value of peoples cash. UK inflation now runs at approx 4.5%pa. So your cash will reduce in value by almost 25% over a five year term. So ideally you should find a plan that offers the opportunity to keep pace or beat inflation.

Funds, namely OEICs, the new version of the old Unit Trust, that are pooled investments probably offer the best home for funds, but should be viewed more long term than 6 months to a year, 5 years is ideal. 

Coral has a Student Accomodation Portfolio that is also worth taking a look at.

Admittedly "funds" are the types of investments that have a bad name over here. The kind of plan that's been sold by advisers from some firms that may or may not have been named earlier. But the right advisor will investigate your wishes and provide you with a tailor made solution, and not the "one size fits all 25 year savings plan" into one fund that some have miss-sold to so many.

Regardless of the above, anyone that lives in the UAE should also be aware that Sharia Law will be applied to their assets in the event of their death. This means that your assets will be frozen (property, cash, car everything), and distributed in line with local customs. Your will that you may have written in your country of origin will be of no use, and it may take upto two years (although I have a client presently that has taken 8 years) to unfreeze. So I emplore all of you reading this, please consider taking your funds off shore, away from this issue, unless you are happy to accept delay in distribution of your assets, and only keep as much cash or assets here as is required to maintian your lifestyle!!!!

Apologies all for what was meant to be a short reply turned into a rather long winded one!!!

And remember, not all Financial Advisors are sharks. Some of us are fully qualified and are motivated by nothing other than doing the right thing!!!


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## INFAMOUS (Apr 19, 2011)

^ Nice sales technique... I am sold, want to invest my money?


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## olsontowers (Jan 18, 2011)

With reference to my earlier post I should clarify:

"This means that your assets will be frozen (property, cash, car everything), and distributed in line with local customs."

This applies only to assets held in the UAE, and any other country that has Sharia Law as the basis for it's legal process.

Any assets held off shore in say the USA, Canada, UK, France, Germany etc etc would not be included in the "freezing" of assets.


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## ipguy (Jul 31, 2011)

In reply to: 
I have heard/read about people making money during recession but have never seen anyone do it. If you have a story to share about opportunities during such trying times, I would love to hear.


If you have a crystal ball and steel balls you can trade commodities and currencies with 200 times leverage


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## ccr (Jun 20, 2010)

indoMLA said:


> On a side note... I just hit post #500.... don't we get some prize or something?


how about a "get a life coupon" for posting 500 times in just 7 months ?


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## ipguy (Jul 31, 2011)

I would like to learn more about sharia law, inheritance and asset freezing


What kind of investments can be made offshore via UAE institutions where you can designate a beneficiary in case of death


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## Elphaba (Jan 24, 2008)

ipguy said:


> I would like to learn more about sharia law, inheritance and asset freezing
> 
> 
> What kind of investments can be made offshore via UAE institutions where you can designate a beneficiary in case of death



What do you need to know? In the event of the death of a man his UAE assets (including those jointly owned with his wife) are frozen immediately. Takes a court order to unfreeze and that can take months. Despite what some may say, there is no such thing as a Sharia compliant will, but a the UAE courts generally accept the wishes demonstrated in a properly written will, which should be written in accordance with home country law.

All sorts of investments are available offshore. What is suitable for you depends on your views on investment risk, timeframe and current markets.

From an investment point of view we are certainly living in 'interesting times' and I think there will be considerably more volatility to come over the next 6-12 months. That said, there are certainly opportunities for the rational long-term investor.

Note that part performance is no guarantee of future returns when people start quoting funds.


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## Tony0202 (Sep 23, 2011)

OT, thats quite a sensible advice on investing. However, I was thinking of more in terms of something which is either an arbitrage or something more exotic. 

I remember about 3 years back, a friend of mine used to make about 40% to 50% return with an arbitrage and zero risk. Am not exactly sure on the structure but it used to work in the following way:

Open two currency trading accounts:
1. Normal trading account
2. Shariah trading account

At that point in time, the interest rate on US$ was at 5.5% p.a and on JPY was 0.5% p.a.

In the normal trading account, he used to sell JPY and buy USD. He had to pay an interest rate of 0.5% as he sold JPY and used to receive 5.5% as he bought USD. Net interest income earned was 5%

In the Shariah account he used to do exactly the opposite. Sell USD and buy JPY. Due to the nature of "shariah" account, there was no "interest" component either in the form of paying or receiving. However, this reverse transaction used to ensure that any currency fluctuations are neutralized.

With a 30-40 times leverage and after deducting all the costs of booking and cancelling trades, the net returns were in excess of 50%. 

This opportunity lasted for about an year and then Shariah trading companies stopped such "inactive" traders who did not actively trade in currencies (Shariah trading entities make money only on trade commissions and not on interest charges). Now ofcourse USD interest rates also are in line with JPY interest rates.

Would you know if there are any arbitrage opportunities in the current scenario? I do not believe in investments where one buys and prays for the markets to go up without having any control over the externalities.

The other option that I am thinking of after watching the movie "Inside Job"  is credit default swaps (CDS). As a retail investor, can I buy a CDS? Better still, can I short CDS/CDOs? Would really appreciate any info on this.

Cheers!
Tony
P.S: If you want to clearly understand the financial crisis....do watch this movie "Inside Job". 

Disclaimer: I am neither the distributor or the producer of this movie


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## olsontowers (Jan 18, 2011)

Tony,

I'm not presently aware of any arbitrage opportunities, although CDSs can be used for arbitrage trading, provided you can identlfy them (something only someone with a lot of time on their hands can do, or a professional)!!!!

Not entirely sure how you would go about trading them yourself. Best bet would be to consult a stockbroker.

For what it's worth, I'd tend to go down the professional approach, and pay someone to make the choices for me as to where, when and how the trades were made, but if your middle name's Gecco, and you want to do it yourself, then why not!!!!

Will now go and trawl the internet for a copy of Inside Job!!!! Checked it out in Wikipedia and looks entertaining!!


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## ccr (Jun 20, 2010)

Elphaba said:


> What do you need to know? In the event of the death of a man his UAE assets (including those jointly owned with his wife) are frozen immediately. Takes a court order to unfreeze and that can take months.


Thanks for that, I will make sure that my wife understands that - just in case.


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## Elphaba (Jan 24, 2008)

Tony0202 said:


> I remember about 3 years back, a friend of mine used to make about 40% to 50% return with an arbitrage and zero risk. Am not exactly sure on the structure but it used to work in the following way:



NOTHING offers such high returns without risk. Not in the real world.

Take care when dealing with complicated financial instruments. Many are not what they appears and have been major contributors to the problems of the banking industry.


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