Gold, not stocks, to remain investors' favourite
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Funds would still concentrate their investment in gold rather than stocks, according to survey results released yesterday by Capital Nomura Securities.
The return on investment in the gold market reached 474 per cent in the past 10 years, which is higher than investing in other assets.
The gold price is also projected to continue to climb to US$1,900 per ounce this year.
The survey conducted on 164 fund managers found that 19.5 per cent will purchase gold and hold it through the end of this year, while 13 per cent will invest in emerging markets and bonds in developed countries.
However, the greenback is still a popular currency. Purchases of US dollars accounted for 40 per cent of the survey followed by the Chinese yuan for 14 per cent, while the Japanese yen and Canadian dollar held equal shares of 10 per cent.
About 60 per cent of fund managers believe one or two countries would be phased out of the eurozone. One of them is Greece. They also forecast that euro bonds would generate the highest yield in the February-May period.
Two-thirds of the fund managers shared the view that the US government will launch QE3 to shore up the economy during the second and third quarters of this year.
Natee Damrongkitjakarn, a senior financial adviser at Kasikorn Securities, said gold is a secure asset for investment. Money should further go into gold. In the past 10 years, investors purchased more gold during economic crises.
During the past few years, central banks around the world and small investors have focused more on gold. The precious metal is targeted to trade over $1,500 per ounce and has a great opportunity to peak at $1,900.
Meanwhile, May Bank Kim-Eng Securities said the debt crisis in the eurozone would set off a market correction during the middle this month through early next month. In particular, it is highly possible Greece will default.
The second round of financial injections totalling euros130 billion would also miss the deadline, so investors should sell to hold more cash now that the SET Index has reached 1,050 points.
Another senior financial adviser from Kasikorn Securities said prices of stock markets everywhere have hit the lowest level during the past several years. A debt default in the eurozone will also trigger a market correction, making stocks more attractive. The most appealing markets include China and India.
