GOLD, SILVER HIT RECORD HIGHS

Concern at events in the Middle East, fear of the consequences of the March 11 earthquake, tsunami and nuclear mishap in Japan, together with the continued slide of the US Dollar have led to gold hitting $1,500 an ounce for the first time. Silver has followed the trend and has doubled in price in the past seven months alone. Clients holding the Aliquot Precious Metals fund will have benefitted strongly from this double gain plus the appreciation of platinum. Investors must be wondering how much further precious metals can go. Gold in fact was more expensive in inflation-adjusted terms in the early eighties but that was a short-lived boom.

The direction of the USD is probably the key to how much further it can rise. At some point in time USD interest rates will rise and the USD will recover. We could then see gold sliding although supply and demand factors should prevent it from falling too far. For the moment there is probably some steam left in precious metals but if you are among the many whose holdings have more than doubled in value over the past few years you may wish to consider taking some profits.

STOCK MARKETS ALSO HIT NEW HIGHS - BUT CAN THIS LAST?

Last week saw many markets hitting new highs, a three year high in the case of the Dow Industrials Index. Even the Indonesian Stock Market hit an all time high of 3,801 on the last trading day before the Easter break. Markets have been boosted by some good earnings reports but the falling dollar could also be a factor as investors move from cash into assets that have real value. But there are many reasons why markets should be falling. These include the still massive sovereign debt of the US, the near bankruptcy of several European countries, the severe recent blow to Japan and the impact on the price of oil of the current unrest in the Middle East. Even China is feeling the pinch as truck drivers strike over the crippling cost of fuel.

If there was a stock market crash tomorrow analysts would have no shortage of explanations. But markets do not always move in a logical fashion. Cautious fund managers have often been caught out by selling prematurely only to see their clients left behind by still rising markets. Market timing is not easy; the conventional wisdom for long term investors is to remain in the markets and ride any storms as they occur.

Having said that, a wise investor who already has a fair amount invested in conventional markets should now be looking at alternative asset classes that are not correlated with the markets. We have been exploring these for ourselves and believe we have found some very good options for clients seeking to diversify.

ARGENTUM REALLY DOES EXIST!

One of the alternative options has not previously been available to retail investors. Some attendees at our recent seminars (not unreasonably) questioned the credibility of an investment that offered guaranteed returns of at least 14% per annum plus the possibility of additional bonuses. To put their minds at rest (and mine as an investor!) I spent three days last month at Argentum's offices in London meeting with their executives and teams of lawyers whose task it is to identify and screen cases that warrant financial support. The cases have to be strong enough to obtain insurance that will cover all costs in the event a case is lost and ensure investors receive a full return of capital and interest irrespective of the outcome of the case.

The concept of litigation funding has mushroomed in the UK since the passing of the Access to Justice Law in April 2000. While providing funds for those who could not otherwise afford the cost of litigation Argentum has now expanded into some major multi-million dollar international arbitration cases. Interestingly, these are highly enforceable under international conventions.

Clients who invested in any of the earlier series in 2010 should be seeing their first win bonuses this or next quarter as several cases are approaching a favourable conclusion.

LATEST ARGENTUM ISSUE - NOW WITH A USD OPTION

Very briefly, there are two options with the latest issue, both for two year terms:

1. Stratum Series IV: USD20,000 per Note. 9% per annum, paid half-yearly, with a further 10% at the end of the term. Win bonuses 20% of amount invested in the respective cases (eg would be $1,000 if $5,000 allocated to a case).
2. Palladium Series II: Minimum GBP 27,000 for three Notes. Immediate uplift to GBP30,000 with 12% interest paid on this at the end of each year. Win bonuses 40% of amount invested in the respective cases. This option will invest primarily in international arbitration cases.

Both options have the same triple layers of protection.

For more details please request the latest flyer and full details of the terms (small attachments).

Closing date for this issue is Friday 13th May, unless fully subscribed earlier.

FORESTRY INVESTMENTS - A 'GREEN' ALTERNATIVE

This is another opportunity to diversify into an asset class that is not correlated with the financial markets.

Earlier this month we held our first seminar in Bali wholly dedicated to forestry opportunities. We had already included Aequus, a mutual fund investing in forestry products, as part of an earlier seminar. The presenter this time was Touchwood which offers direct investment in trees. The two principal products on offer are Argawood, an extremely valuable resin extracted from the Aquilaria tree, and bamboo, an environmentally friendly plant which can be harvested yearly from the same original clump. Argawood is basically a 7 year investment while bamboo is a 15 year investment but which provides a rising income from the fourth year.

Both products are projected to produce annual returns well into double digits.

Again, descriptive pdf's with price lists are available for both.

DON'T GET HIJACKED!

Internet scams such as 'phishing' are becoming more and more common. This is where an e-mail purports to be coming from a familiar bank and will often show the bank logo and may even know your name. Another e-mail recently came to us from an organisation claiming it controlled e-mail addresses and requested registration and a fee to prevent another company taking over our company's e-mail addresses. This particular e-mail had a China suffix. Another common scam - and people have fallen for it - is where someone has hacked into an individual's address book and sent out e-mails to all the people in the address book requesting transmission of urgent funds to rescue the individual who has got into distress in a distant country. In one case I know of the hackers even researched the travel habits of an individual to add credibility to the request. On a more sinister note several clients have advised me they have received approaches by phone and e-mail from a local company claiming they are responsible for the servicing of their investments. Let me know if you are unduly harassed by any such people. Competition keeps us on our toes but not everyone plays by the rules!

CHANGE OF OWNERSHIP OF HARMONY FUNDS

As a result of a merger RMB Investment Services will shortly be renamed Momentum Wealth International Limited. You will therefore see a name change affecting all Harmony funds. Momentum Wealth International is not connected to the Momentum AllWeather Fund which closed following the 2008 financial meltdown. At this point it would appear the change should not have any effect on how the funds are managed. A full 49 page document (4MB) regarding the change is available on request.