Article by Investment U

Most investors think that when they buy shares of a company, the only thing they can do is hold onto them in the hopes of generating a profit.

But in a volatile market environment like today, writing – or selling – covered call options are giving many shareholders the chance to generate even higher returns by “renting out” the shares they own to speculative investors in exchange for monthly income.

It sounds crazy, but it’s absolutely true. And today I’d like to show you exactly how it works.

Like Renting Out Real Estate

It may seem complicated at first, but writing a covered call option is like renting out a home with the option to buy.

The way these leases work, tenants agree to pay a certain amount of rent each month to a homeowner for a certain period of time.

At the end of that time period, the renter then has the option to buy the home from the property owner.

When you write a covered call option, you’re basically doing the same thing.

As the “share landlord” in this case, you already own the shares of the stock you’re “renting out.”

The buyer of the option would pay you a premium (or the rent) for the right to become the new owner of your shares if that stock hits, or rises above, a certain price (strike price) by a specified date (expiration date).

The concept is really that simple.

In fact, many investors today get their feet in the options market trading covered call options because, while there is risk involved, most of it comes from owning the stock – not selling the call.

Let’s look at a few examples. Just keep in mind though, one options contract represents 100 shares. So you’ll need at least that many to use this strategy.

Covered Call Scenario #1: Shares Become “in-the-Money”

If you’re really bullish on a stock for the in the short term, writing covered call options is probably not a good strategy.

That’s because if the stock price becomes “in-the-money” – that’s when shares rise above the strike price by the expiration date – your call option will be exercised and you’ll be obligated to sell each option, 100 shares per contract, to the buyer.

The bad news here is if the stock continues to climb higher, you’re going to miss out on any of the extra gains that come after shares hit the strike price.

However, on the bright side, you will still make a profit from the stock price rising. It just won’t be as much as if you simply held onto the shares from the very beginning.

Another plus, you’ll be able to keep the premium that the buyer paid you, which will add to your returns.

As you can see below, by writing the covered call (the bold line), you’re limiting the upside. As once the stock hits the strike price, the options buyer will likely exercise the option and take your shares. However, you get to keep the premiums and capital gains you collected up to that point.

(Source: www.theoptionsguide.com)

Of course, this is just one example.

Covered Call Scenario #2: Shares Go Down

Remember, when you write a covered call option, you have to own the shares of the company upfront.

That’s why, in this second scenario, two things will happen when the stock price goes down by the time your covered call option expires.

One, you’ll lose money because the value of the stock went down.

But number two, you’ll offset your losses somewhat because you get to keep the premium for selling the option.

Here’s where things can go really well though…

Covered Call Scenario #3: Shares Go Up, But Stay “Out-of-the-Money”

For covered call sellers, this is the ideal scenario.

That’s because the call option you sold will be “out-of-the-money” – that’s when the option expires worthless since the stock never actually hit the strike price – and, therefore, you won’t be obligated to let go of your shares.

An added benefit here is you’ll still make money from the price increase of the stock. In addition, you’ll also make extra money on the premium from selling the option.

It’s really a win-win-win situation.

Studies have even shown that the return on investment from writing covered call options of U.S. stocks typically ranges anywhere from 3% to 9% per month.

In today’s market environment, this basic options strategy may be a useful tool for investors – willing to take on some risk – to bump their returns even higher, without risking everything they have.

Good Investing,

Mike

P.S. As the seller, a general rule of thumb, think about 2% of the stock value as an acceptable premium to offer. You may also want to consider 30 to 45 days in the future as a good expiration date to start out with. Remember, with options, the further out in time you go, the harder it is to predict which direction a stock will head – but you’ll also be able to charge a higher premium because of the time-value of money.

P.P.S. Don’t forget to consult your broker and do your own additional research before writing covered call options. Also, check out The Investment U Bookstore for some great resources to get you started in the options market.

Article by Investment U

Article by Investment U

Now that my book Get Rich with Dividends is a bestseller, I’ve had a lot of requests to be interviewed by the media. And the first question the host always asks me when I mention a dividend-paying stock is, “What’s the yield?”

I don’t blame them. That’s usually the first thing most investors want to know. And it is important. If you’re going to achieve your financial goals by investing in dividend-paying stocks, you do need a decent yield.

But more important than the amount you’re getting paid is the likelihood that you’re going to get paid at all…

That’s where the dividend payout ratio comes in.

The payout ratio is the percentage of earnings that’s paid out in dividends.

For example, if a company has $100 million in earnings and pays out $50 million in dividends, the payout ratio is 50%. It pays out 50% of its earnings in dividends.

The payout ratio formula is simple:

Dividend Payout Ratio = Dividends paid/Net income

A Balancing Act

As an investor, you want to get paid as high a dividend as possible. However, as a long-term investor, you don’t want to get paid so much that the dividend is unsustainable.

For example, if a company paid out 100% of its earnings in dividends and the next year net income falls, the company may have to lower its dividend. That would likely send the stock price lower and disappoint shareholders who rely on the dividend for income.

But if last year, a company had $100 million in earnings and paid out $50 million in dividends, for a 50% payout ratio – and this year, earnings fall to $80 million, it could still pay out that $50 million in dividends (or even raise the dividend if the company chose to).

To ensure that the dividend is safe, I look for stocks that have a dividend payout ratio of 75% or lower.

Let’s look at an example from The Oxford Club’s Perpetual Income Portfolio.

Kimberly-Clark (NYSE: KMB) earned $1.8 billion in the last 12 months and paid out $1.1 billion in dividends for a payout ratio of 61%.

An investor can feel fairly confident that the dividend will be paid even if earnings fall since the company has only paid out 61% of its earnings in dividends.

Cash Flow is King

Now, that you understand the idea, let’s take it one step further. We’re going to use the same concept, but instead of using earnings to figure out the dividend payout ratio, we’re going to use cash flow from operations.

Cash flow from operations is a more accurate gauge of a company’s ability to pay dividends. You see, earnings have several non-cash figures in the formula. Things like depreciation, amortization and stock-based compensation are accounting tools that affect net income but don’t represent actual cash that the company is earning or paying out.

Cash flow from operations removes non-cash items and is a more accurate indicator of how much cash the company took in over the quarter or year.

The formula for the payout ratio is the same. Just substitute cash flow from operations for net income. [Note: “Dividends paid” and “cash flow from operations” are both located on a company’s “Statement of Cash Flows.”]

Dividend Payout Ratio (using cash flow) = Dividends paid/Cash flow from operations

Using the Kimberly-Clark example, cash flow from operations is $2.6 billion, dividends paid is $1.1 billion (same as above) and the payout ratio using cash flow 42%.

So you can see that Kimberly-Clark paid out just 42% of the cash it took in from operating its business, giving it plenty of room to grow the dividend (as it has for 40 years in a row), even if earnings and cash flow decrease.

How Safe is the Dividend?

Here’s another example of why you should look at cash flow rather than earnings when determining the safety of the dividend.

Over the past 12 months, Taiwan’s United Microelectronics (NYSE: UMC) earned NT$10.6 billion (NT$ = New Taiwan Dollar) and paid out NT$14 billion in dividends. That sounds unsustainable. The company is paying out over NT$3 billion more than it earned.

But when we look at its statement of cash flows, we see that cash flow from operations was NT$41.6 billion, in large part due to over NT$32 billion in depreciation and amortization (non-cash expenses that lower earnings).

So when we look at the dividend payout ratio based on cash flow, it’s a very reasonable 34%.

The payout ratio, particularly using cash flow, will give you a good idea of how safe the dividend is.

A strong dividend yield is great, but it hardly matters if it’s not safe. Now you know the first question to ask when researching dividend-paying stocks.

Good Investing,

Marc

Editor’s Note: Along with the article above, Marc provided Investment U Plus readers with a large-cap energy stock yielding just under 5% with a dividend payout ratio from cash flow below 20%. Along with many energy stocks, it’s dirt cheap, too. Its P/E is below 7 and its trading at just 1.2 times its book value. He sees the recent weakness as a major opportunity to get in to an incredible stock with a very healthy yield.

To find out how to get “in the know” and access our experts’ premium recommendations with each and every daily issue (and for just pennies a day at that), click here.

Article by Investment U

Article by Investment U

In the 30 years I’ve been banging around the markets, I’ve seen a lot of blood in the streets because of panic.

Most of that “blood” turned out to be solid moneymaking opportunities for more savvy investors.

“Blood in the streets” is the simple result of out-of-favor companies being panic sold – or when the whole market is in a dump mode. But as I’ve written in the past, it’s also an opportunity if you’re trained to spot it.

Learning to look for the right kind of out-of-favor buys takes a long time. It isn’t an easy transition. But, if you survive until you get to the point where you can see the opportunity in sell-offs, you can really start making money.

Think of it as buying a winter coat in the summer time. Most people wait until autumn or winter and pay full price for a coat. But the savvy shoppers will look to find a comparable coat for half the price in July.

The Same Goes for Stocks and Bonds…

This is as true for bonds as it is for stocks. But bonds in out-of-favor companies offer a lot of opportunity and a lot more predictability – along with faster rebound times, too.

In the current market, companies in the business of energy, printing, tech and paper are some of the most unwanted of the street. But some of them can offer big – perhaps very big – paydays.

Not every cheap bond is a good one, though. There are plenty of cheap bonds you should stay away from. These, like some beaten-down stocks, can be costly value traps if you pick the wrong ones. And the wrong one is usually the highflier that catches the eye of rate pigs.

Below is one out-of-favor bond that looks bad and then one that looks much more attractive… You’ll see that just relying on the ratings isn’t enough.

Out of Favor Bond #1 (The Bad): Ultra Petrol (Cusip: 90400XAC8)

This company supplies barge and ship support to oil and gas developers and drillers. As with many energy-related companies, this one has really been smacked by lower gas and oil prices.

It’s a B- rated bond, which isn’t bad. And it sports a 9% coupon that matures in 11/24/14 that we can buy for 88. There’s a call on 8/12 at 101.5 that, if it’s called, will pay us 211%. Ding, ding, ding, big payday!

This normally would look like the perfect bond for us; a very short maturity, a very high annual return of about 15% and a very, very high yield to call, all at a discount. All the right parts!

But, as a friend of mine in the real estate business says, “Check the bones.”

This company has missed its earnings by as much as 300% four of the last four quarters.

It’s expected to earn $0.12 to $0.17 per share next year, up from -$0.65 this year – that’s a positive – but it only has a 4% annual growth estimate for the next five years.

But here are the real warning signs for Ultra Petrol:

• It’s a micro-micro-cap company with a market cap of just $38 million.
• It has a negative profit margin of -8%.
• It’s saddled with $545 million in debt, only $310 million in annual revenue and only $24 million in cash.

How did they get a B- rating? No idea, this is most likely a wreck looking for a place to happen.

Too many investors go out hunting for big yields like this one only to get bad news from the company long after the time to make changes.

Does this mean they’ll definitely default? Not necessarily! But, why take the risk when there are other great bonds that have a much better chance of giving you a nice smooth ride. For instance…

Out of Favor Bond #2 (The Good): Today’s Investment U Plus Pick 

I recently recommended what I see as a much better option to my Oxford Bond Advantage subscribers. The company is a worldwide transaction processing company and its bonds are rated CCC+.

But despite the poor rating in comparison to Ultra Petrol, this company is much bigger (it had a $20-billion-plus market cap before it was taken private), is backed by a large private equity firm and it’s much safer. I’ve actually recommended it many times in the past and we’ve always made lots of money on them.

The particular bond I’m recommending has a coupon rate of 11.25%, a price range of 95 to 97, a current yield of 11.84% and it matures on 3/13/16.

Using my MEAR (minimum annual expected return) calculation, we find:

This bond offers eight interest payments of $56.25, plus capital gains of $50 per bond at maturity, minus AI of $30.93, divided by our cost $950 per bond, divided again by our holding period of 44 months, times 12 months for one year, equals a MEAR of 13.46%.

8 x 56.25 + 50 – 30.95 / 950 / 44 x 12 = 13.46%

Here’s where it gets really good…

This bond has two call features. That means the company has the option to buy it back before maturity. We don’t know yet if they will.

If it’s called on the first call date, August 2 of this year, we will earn an annualized return of 105%.

Don’t go out and buy a new car or house just yet. They will pay us 105.625, or $1,056.25 per bond. That’s a $106.25 gain in a month and a few days.

If they offer that much, take the money and run. In real cash numbers, that’s an 11.18% gain in a little over one month.

Next is a call at par in September of 2013. This will give us a yield to the call of 15.58%.

Again, nothing to sneeze at!

13.46%, 15.58%, or 105%? Not bad!

Besides gaining a better understanding of underlying factors affecting a bond choice, this should serve as a wake-up call about ratings. They can err in both directions and should be used only as a very broad indicator, not the only factor in considering a bond.

Remember when they were asleep at the wheel during the sub-prime crisis?

In fact, there are several CC bonds I would like to recommend to my Oxford Bond Advantage, but their ratings are too low to meet the service’s requirement. Too bad!

Be Very Selective When Bottom Fishing

While it’s nice to go out hunting for the big payers, it’s also comforting to not get too aggressive in your choices. Look at more than the annual yield and the rating.

Don’t be a rate pig. They always get slaughtered. A rate pig goes for the highest yield and ignores the other factors. We all have a rate pig in in us, some of us are just better at controlling it than others.

Do the footwork! Look at all the key indicators and fight the urge to play catch-up ball. We have all been beaten up and starved by this income market. Rushing things or forcing choices will only make it worse.

“Keep it real” and back it up with solid numbers and you’ll have a much nicer financial future ahead of you.

Good Investing

Steve

Article by Investment U

Article by Investment U

Is Amazon (AMZN) About to Take Over Retail?

by Mike Kapsch and Jeannette Di Louie, Investment U Research
Tuesday, July 24, 2012

Beginning this September, Amazon (Nasdaq: AMZN) will begin offering same-day deliveries. Is the e-commerce giant poised to take over retail altogether?

This fall, the retail market could be flipped completely on its head…

What’s about to happen?

Well, just consider this scenario:

There’s a lot of hype surrounding The Avengers DVD hitting stores September 25.

If you had the option to drive and pick up your copy at a big box retailer – like Best Buy (NYSE: BBY) or Target (NYSE: TGT) – or order it online and receive it the same day, at a not-much-higher price, which option would you choose?

Beginning this September, that’s exactly what Amazon (Nasdaq: AMZN) plans to do – same-day deliveries.

According to Slate, “Amazon is investing billions to make next-day delivery standard and same-day delivery an option for lots of customers. If it can pull that off, the company will permanently alter how we shop.”

Currently, Amazon does have local express delivery that can deliver certain items on the same day you place your order. But that’s only for customers in a few select cities who pay $79 a year to be Amazon Prime members.

This is a whole new ballgame. And in September, residents in California and Pennsylvania are going to be the first to have the chance to embrace this new way of shopping.

Probably Not Quite the Death of Traditional Retail

For me, it’s a no brainer. I’d order it online and happily sit at home waiting for it to appear on my doorstep. Of course, I personally don’t like going anywhere to shop, so my opinion could be just a bit biased.

For instance, my colleague Jeannette Di Louie feels quite differently:

“Women use traditional shopping as a way to socialize and blow off steam just as much as to actually fulfill a need. To the feminine mind, it’s quite simply fun to browse physical products for a few hours… much like men find it enjoyable to spend time wandering a golf course.”

So while traditional retailers will undoubtedly have to step up their game to keep up with their online competition, don’t expect them to be disappearing anytime soon. Amazon won’t be taking over that part of the world just yet.

With that said, its new facilities will still positively impact its bottom line going forward.

Even Creating its Own Smartphone…

Back in 1995, the company started out as simply an online bookstore, but it wasn’t long before it began expanding into other areas of commerce. Today, Amazon offers everything from media downloads to jewelry, and electronics to home improvement items, such as kitchen cabinets. And the company has been pushing more strongly into the clothing business as of late, expanding even further into the retail world.

Then there are its other capitalistic ventures, such as its eReader, the Kindle, and the growing speculation that it’s also working on its own smartphone. Yet, as if that’s not enough, the retail giant is still busy expanding, with specialized sites already established in Canada, China, France, Germany, Italy, Japan, Spain and the United Kingdom.

Ever since last fall, Amazon.com has concentrated millions of dollars into improving its shipping services. More specifically, the company is building new facilities around the country, including the Mid-Atlantic, Midwest and San Francisco Bay region.

And a number of companies could see their profits squeezed if Amazon’s same-day delivery becomes a hit. Investors better pay attention…

The Winners and Losers…

Wal-Mart (NYSE: WMT), the nation’s largest food retailer and the biggest retailer worldwide, is at the top of this list. The company has already seen its customer base fizzle at the hands of Amazon in recent years. And this latest announcement won’t help change anything for the better.

By the same token, other retailers like Target (NYSE: TGT), Costco (Nasdaq: COST) Barnes & Noble (NYSE: BKS) and Bed Bath & Beyond (Nasdaq: BBBY) come to mind.

Also, shares of clothing outlets such as J.C. Penney’s (NYSE: JCP) and/or Macy’s (NYSE: M) could soon come under fire, as well.

But Amazon sells much more than what these companies offer.

That’s why the home improvement sector could suffer. Home Depot (NYSE: HD) and Lowe’s (NYSE: LOW) are two companies that could see shares dip if same-day delivery is as popular as many people think it will be.

Most construction jobs that require precise measurements will likely keep customers coming back to stores like Lowe’s and Home Depot. But purchasing power tools or ceiling fans or miscellaneous items probably won’t. At least not when Amazon likely has a superior selection and better prices – plus, now someone will deliver them right to your door within the same day.

Which brings us to delivery companies…

Amazon hasn’t stated plans to partner with major shipping firms such as UPS (NYSE: UPS) or FedEx (NYSE: FDX), but given how much they already benefit from Amazon, this could be one of the hot spots for investors other than directly investing in Amazon itself.

Of course, only time will tell how successful the world’s largest online retailer’s same-day delivery service will be.

Already An Impressive Bottom Line

Amazon already has an impressive bottom line. Every year, it seems to significantly and consistently grow its revenue and profits. And last quarter, it beat out even its most bullish analysts’ expectations.

Thanks in part to the increasing popularity of its Kindle Fire tablet, sales increased 34% over Q1 2011 revenue to 13.18 billion. Those kinds of results have sent Amazon’s stock skyrocketing from its recession low of $37.87 to well over $200 today.

But Amazon stock certainly isn’t cheap from a valuation standpoint – its forward P/E is nearly 90. But all that means is that there’s plenty of growth cooked into its current price. But as Alexander Green has said many times, the only thing that drives future stock prices is earnings growth. And if Amazon can continue to grow earnings at an impressive clip, P/E means a lot less about the company’s valuation. However if growth stalls, you could see a mass exodus from such an expensively valued stock.

The company will be announcing its Q2 results on Thursday, July 26. Analysts seem to have mixed opinions about how the company fared. Considering that many retailers struggled in June, Amazon might not be able to pull off another quarterly surprise.

However, if it does happen to disappoint and the stock dips, it could present a great buying opportunity. With a strong past record of growth and increasing customer convenience, Amazon looks poised to be a world dominator for some time. The only question lies in what the fair value is…

Good Investing,

Mike and Jeannette

Article by Investment U

By TraderVox.com

Tradervox.com (Dublin) – The south pacific currencies increased the most this month against the US dollar after the European Central Bank President Mario Draghi indicated that policy makers will do everything possible to quell the preserve the euro, boosting demand for commodity related currencies. The two south pacific dollars increased as investors increased their bets central bank officials will act by intervening in the bond market to stop the high borrowing cost in countries such as Spain. Spanish two-, five-, ten-, and 30-year yields soured beyond 7 percent yesterday. The Aussie and Kiwi also rose as global stocks and commodities advanced.

Ravi Bharadwaj noted that the considerable gain experienced by the New Zealand dollar is as a result of the risk-on mood sparked by Draghi’s comments. Ravi is a market analyst at Western Union Business Solutions, which is a unit of Western Union Co in Washington. Apart from Draghi’s comments, the south pacific currencies also rose as Standard & Poor’s 500 Index increased by 1.9 percent and the MSCI Asia Pacific Index increased by 0.8 percent. Spanish 10-yar yields rose to a record 7.75 percent, increasing the pressure on ECB to intervene in the bond market.

As Draghi Spoke in the Global Investment Conference in London yesterday, he said that the increasing sovereign-bond yields may drop within the European Central Bank jurisdiction following its intended intervention. He promised that the bank’s interventions will work. The Australian dollar, nicknamed Aussie, surged 1.1 percent against the US dollar to trade at $1.0402 yesterday in New York and later closed lower at $1.0397 which is a 0.9 percent higher than the previous day’s close. The Aussie rose by 0.9 percent against the yen to exchange at 81.32 yen per Australian dollar. The New Zealand dollar was up by 1.8 percent against the US dollar after Draghi’s comment, to 80.30 US cents and closed the day lower at 80.19 cents, which is a 1.6 percent increment from previous day close. The kiwi climbed by 1.7 percent against the yen to trade at 62.72 yen.

Disclaimer
Tradervox.com is not giving advice nor is qualified or licensed to provide financial advice. You must seek guidance from your personal advisors before acting on this information. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. Opinions expressed at Tradervox.com are those of the individual authors and do not necessarily represent the opinion of Tradervox.com or its management. 

Article provided by TraderVox.com
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By Central Bank News

London Gold Market Report
from Ben Traynor
BullionVault
Friday 27 July 2012, 07:00 EDT

SPOT MARKET gold bullion hit a five-week high at $1625 an ounce during Friday morning’s London trading, on course for a weekly gain that would see the pattern of alternating up and down weeks stretched to week number eleven.

Silver bullion also held onto most of its recent gains, trading around $27.70 per ounce for much of the morning.

A day earlier, gold and silver rallied following comments from European Central Bank president Mario Draghi that were taken to suggest the ECB could start buying government bonds again.

“We believe the risk [for gold] now lies with a move to $1640, the June high,” says the latest technical analysis note from bullion bank Scotia Mocatta.

“”There will be buyers now on any retracement to “1590.”

“Technically the price action is starting to look a bit more constructive,” agrees Credit Suisse analyst Tom Kendall.

“But that could fade as quickly as it appears to have been building… physical demand is still pretty soft [and] positioning is disinterested across much of the investment community.

Based on London Fix prices, gold bullion looked set for its biggest weekly gain in seven weeks by Friday lunchtime in London. A PM gold fix of $1626.75 or higher would make this the biggest weekly gain since the last full week in January.

With markets looking ahead to preliminary US GDP figures due to be published later, European stocks were broadly flat this morning, having rallied on Thursday after Draghi said the ECB “is ready to whatever it takes to preserve the Euro”.

“It is a signal that the ECB is closer to reactivating bond purchases if all else fails,” says Julian Callow, head of international economics at Barclays.

The ECB’s Securities Markets Programme, which was launched in 2010, was used last year to buy Spanish and Italian government bonds on the open market.

“The thing we wonder here is exactly where the Bundesbank stands…[since it has] historically been resisting the reactivation of the SMP.”

“The Bundesbank has not changed its opinion [on ECB bond purchases],” a spokesman for the German central bank told Dow Jones Newswires on Friday.

“[Draghi has] maneuvered himself into an extremely difficult situation,” warns Carsten Brzeski, senior economist at ING Group.

“[Market] expectations are very high.”

“I don’t believe you will see government bond purchases yet,” adds Jacques Cailloux, chief European economist at Nomura in London.

“We have some doubts about whether the interventions will be of the required scale,” says Nick Kounis, head of macro research at ABN Amro in Amsterdam.

“It therefore seems likely that the bond purchases will just allow policy makers to muddle through unless much more financial firepower is put on the table.”

Following Draghi’s comments, benchmark yields on 10-Year Spanish government bonds fell back below 7%, while yields on Italian 10-year bonds fell below 6%.

“Draghi ist ein Plünderer des Bürger-Spargroschens”, says a headline from German newspaper Handelsblatt. The phrase, which loosely translates as “Draghi is plundering the nest eggs of citizens”, is attributed to German politician Frank Schaeffler, a member of the FDP party which forms part of the governing coalition.

“Higher inflation is an inevitable consequence of this ECB policy,” adds Klaus-Peter Willsch, a member of chancellor Angela Merkel’s CDU party.

“The signs are already clear to see: in prime real estate prices, prices of agricultural and forest land, gold, coin collections, classic cars…the flight into real values has already begun.”

In the US, the first estimate of second quarter gross domestic product is due out later today, expected to show a slowdown in economic growth.

“If the US GDP number falls short of expectations, it would once again fuel speculations on Fed easing, which would help gold,” reckons Phillip Futures analyst Lynette Tan in Singapore.

Elsewhere in the US, hedge fund Paulson & Co. may have lost closet to $50 million on its investment in gold mining firm NovaGold after its stock saw its biggest fall in three years, newswire Bloomberg reports.

Paulson & Co. offers investors accounts denominated in gold and holds a large number of shares in the SPDR Gold Trust (GLD), the world’s biggest gold ETF.

GLD gold bullion holdings held steady yesterday at 1252.5 tonnes, though they remain at their lowest level since January.

Ben Traynor
BullionVault

Gold value calculator   |   Buy gold online at live prices

Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.

(c) BullionVault 2011

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

By Central Bank News

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