Audio version

37

Aug/Sept 2010 www.esb.ie/em

LIFE

GOLD: The most universal currency in the world!

All that glistens

BARRY MCCALL

The appalling performance of the financial markets and the weakness of the banks in recent years have caused people to explore different forms of investment and for many gold has become the safe haven of choice.

THIS IS NOT altogether surprising as the yellow metal is the world's first and only universally accepted currency.

Gold is also a remarkably easy commodity in which to invest. There are a wide variety of companies and brokers who will invest your money in gold on your behalf and hold onto the physical commodity on your behalf. You can also buy instruments known as exchange traded funds (EFTs) which track the price of gold without actually investing in it. Another option is to actually buy the physical gold bullion in the form of Krugerrands or coins issued by countries such as the US, Australia and Canada.

And the gold price has certainly been performing well over the past few years making it a very attractive investment for those who have lost faith in the stock markets. However, a note of caution should always be struck when it comes to any investment. There really is no such thing as a free lunch when it comes to investments – nothing goes up forever.

The price of gold currently stands at around $1,200 per ounce. This is a very healthy performance indeed given that the price was less than $300 per ounce at the beginning of 2000. That's an increase in price of around 300% in ten years. Given that the average pension fund in Ireland has shown growth of less than 5% over the same period this is an outstanding return.

But when you take the longer view the picture is somewhat different. Between 1970 and 1980 the price per ounce of gold rose from just $37.70 to $850. The 1980 peak stood as a record until 2008 and still stands as an all time record in inflation adjusted terms. Indeed, quite a stark statistic for anyone thinking of betting the farm on gold relates to that 1980 record price. Anyone who had bought in at that $850 high and held onto it until now would be sitting on a loss of 45% in real terms. To have kept pace with inflation the price of gold would now have to be $2,200. That's a fairly hefty loss by any standards.

Of course, anyone who got into the market before 2008 would be sitting on a tidy profit at present. But what of those coming late to the market and thinking of getting in at the current level of $1,200. The consensus among many gold traders is that it could rise to as high as $1,500 per ounce before suffering any significant fall or “correction” as they put it in the markets.

That said, the same people forecast continuing increases for the gold price through 2008 when the opposite was the case with a fall from a high of $1,000 to a low of about $750 occurring before a sustained rally began towards the close of the year and has continued since.

So, while gold has its attractions it is neither inflation proof nor is it immune to falls in price as investors have found over the past 30 years. The conclusion? If you’re still tempted to invest in it don't make the mistake of overexposing yourself to this one single commodity.

Subaru Legacy

DAVE WALSHE

SUBARU SELL the world's only boxer diesel engine. And that's all they sell in Ireland. But to make things easier they’ll put it in an Impreza, an Outback, a Legacy or a Forrester for you. And choice is something Subaru doesn't spend too much time agonising over. They now spec their cars very high so there isn't much you'd want to add, apart from the unfathomable omission of reversing sensors. Simple model and one I like. And I like the Legacy. It reminds of the time when I read that Honda see their Accord model as a rival for the BMW 5 series. There was scoffing and guffawing but in terms of engineering and quality it is a match – albeit suffering in the badge stakes. Well the new Legacy is behaving like that now for Subaru.

The Legacy pitches itself against the best out of Japan/Europe and is invading the space in our minds where the Toyota Camry once resided. It is a bigger car, bigger looking but dropping a few Subaru idiosyncrasies. The windows now have a chrome frame whereas before there was none, shame. Its looks are, from the front window forward, very Subaru with the trademark bonnet scoop. Moving towards the back it could be anyone's really. It has tons of rear space and a big boot but alas it hasn't got the individuality associated with Subaru. Maybe this is what's needed nowadays to increase sales.

“Subarus are always winning awards for reliability and dealer service

On the spec list is an electric handbrake, alloys, front fogs, a handy instant fuel usage dial, integrated (at last) Bluetooth and radio controls, electric driver's seat, heated seats and more. Very handily there are compartments that have lids to keep stuff away from prying eyes.

The car comes with 4WD as standard and starting at €34,995, for the spec and size of car this is, it's very keenly priced.

It really is a divine place to be. Insulated from noise the Legacy is a haven in this age of constant din and distraction. On the twisty roads where I live the sense of adhesion to the road was all-4wd-pervasive. It gives the driver additional assurance that the car can handle the performance of the 6 speed, 2 litre turbocharged, 150bhp, diesel engine. All this is delivered with new levels of comfort. The ride is very much geared to comfort now and the car is the better for it. If you want sporty then go for the Impreza – same engine remember.

Subarus are always winning awards for reliability and dealer service – back in fashion post C.T. They are wedded to 4wd for safer motoring and now have an award winning diesel engine that the market demanded and thankfully got. With this Legacy they have a car they can proudly offer as an alternative to the traditional “premium” brands because it delivers, big time.

Alan Gallagher Third Level Educational Award

SIMON DUNNE

THE ALAN GALLAGHER Third Level Educational Award is now in its 5th year and its purpose is to improve the social and economic well-being of members and recognize the value of their contribution to the community, in this case ESB. The award is not about charity or welfare but about enhancing members’ lives and providing opportunities.

Details of the scheme

• One Education Award per annum will be offered to students commencing their third level studies in the next academic year. Selection will be on the basis of an open draw.

• The value of each Education Award is €3,000 per annum for a maximum period of four years. This is subject to satisfactory performance including passing the prescribed exams.

How to apply

Your application for the ESB Third Level Education Award will automatically include you in the Credit Union draw. These application forms can be downloaded from the ESB Intranet or you can contact Shared Services in Head Office to send you a form.

Deadline

The final date for receipt of applications is the 15th October 2010 and the winner will be drawn on the 29th October 2010 with the winner's name being announced on the Credit Union website.

Eligibility

• This award is available for the dependent children of St. Patrick's Credit Union (ESB Staff) Ltd. members.

• The scheme is for students commencing their full-time, third-level education (to degree or diploma level) at any approved University or third level educational institution within the E.U.

• A family may be in receipt of only one Education Award at any one time.

• An individual student may be entered for the draw on one occasion only.

• Unforeseen circumstances concerning eligibility will be reviewed if they arise during the tenure of an award.

• Under the 1997 Finance Act these awards may be taxable.

Range of courses

• For the purpose of recognition, Degrees & Diplomas should be accredited by a recognized University, The HETAC (formerly NCEA) or equivalent accrediting institution.

• The Education Awards do not apply to post-graduate or part-time studies.

Please contact Simon Dunne on 01-6325100 if you have any questions.

Please see our website www.stpatrickscu.ie for a full list of Terms & Conditions or contact a member of staff on 01-6325100 or Extn. 35100

St Patrick's Credit Union Competition

Win an iPod nano!

To be in with a chance of winning please answer the following question and text your answer to 087 9858238 in the following format: “CUCOMP followed by your answer (i.e. a, b or c) and your name”

What is the annual value of the Third Level Educational Award?

a) €2,500

b) €3,000

c) €3,500

Important Only one entry per person, no mail entries acceptable, and the closing date is September 15th.

Last issue's winner

Last issue's winner was Aoife Keenan working in Insurance Services – congratulations Aoife and your iPod nano is on the way out to you.