JPM Natural resources & Merriyll Lynch Gold & General

TomD_3

I've had a holding in JPM N.R. for a few years and it's been an impressive performer. It is quite volatile but that is the nature of mining/commodity stocks. I would certainly recommend buying into it (although perhaps not right now!)

Browntrout_2

Watching CNBC this morning, one of the guest speakers was Philip Manduca of Titanium Capital Asset Management (hedge fund).

He put forward a convincing story for gold to hit $2,000 in the medium term.

You can probably catch the video on cnbc.com
http://www.cnbc.com/id/15840232?video=571773722&play=1

He reckons as the $ falls, and it will, emerging markets will revert to gold as their reserve currency, this will not happen overnight and you could easily see $600 next month (the market is a great humiliator) but the long term trend is up.

I hold JPM Natural Resources, Merrill Lynch Gold and General and Investec Global Gold.

Earlier someone mentioned holding bullion directly compared to shares in mining companies which might not benefit as costs can rise. This is the same for any business, the balance of maintaining profitable production. But if the break even on a mine is 500 and the market rises from 750 to 1000, then your profits have doubled, ongoing every year it stays high (unless hedged). Whereas buying the metal at 750 is a one of gain of a third, less storage costs, and no dividend, basically a store of value.

cloud_dog

egamar wrote: »

Well, I don't think that was the only time - it is pretty volatile

http://www.moneyextra.com/funds/UK/chart/SPCPN

But I certainly agree it's not a fund to trade short-term with it, and it's given me excellent returns (since I lucked in 'at the bottom' ). It's one not to panic about, especially on days like today.

Perhaps my comment speaks more about my own risk profile and understading of investment vehicles. Volatility goes with the territory and should be well understood before making investment decisions your heart can't handle, but its the trend you need to follow (as I'm sure you know).

cloud_dog

shokadelika

TomD wrote: »

I've had a holding in JPM N.R. for a few years and it's been an impressive performer. It is quite volatile but that is the nature of mining/commodity stocks. I would certainly recommend buying into it (although perhaps not right now!)

People tend to forget that nat resources and emerging markets are closely correlated to each other.


.http://www.h-l.co.uk/fund_research/fund_performance.hl?x=37&y=14&sedol=3183511&timescale=4&timespan=24&chart_scale=P&tr=&compare_index=none&store_compare_indices=AG01&compare_provider=none&store_compare_funds=&compare_fund=none&compare_share=mlw

Saving monthly into a volatile fund is usually an efficient way of smoothing out the inevitable highs and lows.

egamar

Ooops JPMNR - down 5 1/4 % yesterday! MLG&G down 3 1/3 % Good time to buy? Who knows, they could be up those same amounts gain today ......

I guess there's a lot to be said for drip-feeding money into funds like this when they're on their highs or therreabouts!

hyposmurf

Yeh down 41.04p for JPM NR.ML Gold & G down 37.0.I thought both these funds were meant to prosper in times like these.Didnt expect them to drop that much at all.Buying opportunity or as egamar said just a blip maybe theyll rise again by the end of the day.

egamar

Oh, they've been up and down like a pair of drawers for ever - but pretty much inexorably up. If you look at their volatility/risk rating in Morningstar you'll see they are very volatile and way at the high end of risk (I think - I haven't looked for a while). That's why they're long-term investments, not ones that you might have to cash out at a bad time when your rainy-day money has evaporated!

One thing I look at it trend (maybe I'm a chartist!) and it's pretty much going in the right direction. The other inescapable logic in my mind is that the demand for 'natural resources' is ever increasing (given the industrialisation of China, India and other emerging markets). The only trouble the is, any time anyone in the Chinese Govt sneezes the markets seem to catch double pneumonia rather than a simple head cold! But that's all just my opinion!

hyposmurf

If I was to purchase a fund currently, would the idea behind favouring making monthly payments over a lump sum be that I could halt the payments should the market go into freefall?

egamar

No, not really. It's called '£ cost averaging" - you can google it with some success I think (although maybe you have to write pound not £).

What it means, in effect, is that over 12 months you buy a volatile fund at various prices, high and low, which tends to give a more favourable result than buying in one lumpsum (unless you see or luckily hit a low at the time you invest your wodge).

It's all about statistics and averages and such: it's a sound principle, but you'll only know if it worked for you at the end of the year! I deduce that it is more likely to be beneficial the more volatile the fund is, but I am prepared to be corrected.

I think if I were determined to invest in any of the funds which have shown such strong gains over the last months, I'd either drip feed or wait until they crash! But if you have your ISA allowance to use and REALLY want to buy these funds before April, you have a choice to make! Good lick!

wombat42_2

hyposmurf wrote: »

If I was to purchase a fund currently, would the idea behind favouring making monthly payments over a lump sum be that I could halt the payments should the market go into freefall?

As i said before you benefit with regular payments if the market goes down as you get more units. Frankly i get the message that you investing in a risky volatile fund like JPM NR will give you sleepless nights. If I were you I would invest in something safer and less volatile such as a Global fund and keep it invested for an absolute minimum of 5 years and preferably 10. You should still get some nice returns and you will sleep easier.