Quick poll: Things being as they are, where would you invest $500,000 today?
- Precious metals 32%
- Real estate 20%
- Stock market 17%
- Under the mattress 15%
- Bank/savings products 6%
- Other commodities 5%
- Government bonds 4%
Comment by Justin Roux, SVP of Communications at Luvata:
283 people is a healthy level of response to this light-hearted but very revealing question. Quite simply, if you were given half a million dollars and could resist the temptation of a luxury holiday and a fast car, what would you do with it?
If you believe that commodity prices retain any link whatsoever to market dynamics then you could interpret the race between precious metals and real estate as the separation of long-term thinkers from short-term thinkers. Here's a simplistic angle: gold has surpassed platinum by the ounce leading to a high-street rush of people selling off 30 years of undesirable fashion accessories. Tastes have changed and even with China and the Middle East showing single-digit growth in their gold jewellery consumption, today's styles will take more than 30 years to bring that metal back out of the vaults and back into consumers' possession. Jewellery and recycling make up almost all of the dynamics of the gold market and so one could argue that the bubble could be just about to burst. That is, of course, IF prices reflect market dynamics.
Real estate prices, like it or not, will rise steadily. They may stumble through the financial jungle like a limping elephant but, one way or another, they hold their path. Three years ago, analysts argued whether or not we should start to see houses as homes and not investments but, with so many people aspiring to the housing ladder, it seems that no-one listened.
Next in line, we have the Stock Market and the mattress taking around the same share of the vote. That means as many of the voters would take the zero-growth option as invest in stocks. This single indicator is surely a sign of the times and a stark warning that confidence will come out of hibernation only if business goes first. Oh ye of little faith!
Perhaps it's the overriding sentiment of "I'll believe it when I see it". Sociologists talk of a polarised society: "them and us" or "the people and the system". It seems that all the glossy, reassuring words and speeches of the financial and political figureheads just don't have the same street value as they used to, and that's easy to prove - banking products and government bonds score only 6 and 4 percent respectively.
Yes, we're certainly in a time of economic uncertainty. I think that uncertainty is not solved on a balance sheet but in the mass consciousness. The world needs something it can believe in. It's time for divine inspiration:
"Faith is being sure of what we hope for and certain of what we do not see." (Hebrews 11.1)
Recovery starts from within.