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Ivan the Investor’s Dilemna

9907 Alan Clarke
9907 Alan Clarke

Ivan is a typical Kiwi do-it-yourself investor who believes that you can choose superior investments.

Like many people, he thinks that when governments print more money, chaos will ensue and the only way to protect his money is to invest heavily in gold.

One wonders how Ivan is feeling this week?

US Stocks: New milestones in sight – CNN Money

Ivan has been pretty sure for several years now that the US economy is on the way out and so has avoided US shares.

The Dow and the S&P 500 are hovering around all-time highs, since it is thought that many shares are around 25% undervalued. This is largely based on projected company earnings growth, and millions of investors around the world seem to agree, since they have pumped more than $60 billion into U.S. stocks this year.

Gold sinks into bear market – Reuters

Ivan has been buying gold at an average of about $1500 an ounce over the past two years.

This week gold fell below $1,300 an ounce for the first time since July, 2011, confusing those who were predicting it would get to $2,500 an ounce before too long.

If the US economy continues its tentative recovery, shares could rise more, and gold continue to lose its shine.

Bill English warns of new housing bubble

Ivan was planning to buy one or two rental properties in Auckland, but Finance Minister Bill English sees a problem.

Bill is worried about an Auckland housing boom, and says that the Government will act to curb house price growth.

Should Ivan buy more now? Will the bubble burst? Who knows, but it is probably not a good time to load up on expensive property at the moment.

Why I'm in Mighty River queue Tim Hunter, journalist

All at sea on Mighty River – Rod Orams, journalist

Why I am Mighty cautious – Martin Hawes, financial commentator

Ivan is keen on Mighty River shares, and after reading these articles he is more confused than ever. He knows most of us will only get $2,000 worth of shares.

He also knows that Lake Taupo is a major underwater crater in a still-active volcanic region, and that all of MRP's assets are heavily concentrated in this one region.

Ivan has nearly torn out all his hair this week!

It is well known that that choosing any investment by predicting and forecasting is incredibly difficult.

Ivan may well do better to use is asset class investing and spread his investments very broadly across bonds, property, and shares, both onshore and offshore – and yes maybe some gold too, but not too much..

Despite all the negativity from Europe, returns in 2012 from asset class funds were good;

  • global bonds made around 8%
  • hedged global shares 16%
  • global listed property 18%

Alan ClarkeBuy Alan's Book in the GrownUps Store now.

This article was supplied by Alan Clarke who is the author of a book entitled "Retire Richer" which is a practical guide for everyone age 25 to 85. Alan also writes a regular blog on

Alan is an independent authorised financial adviser (AFA) and his disclosure statement is available on request and free of charge.