Audio version

37

LIFE

Oct/Nov 2011 www.esb.ie/em

ST PATRICK’S CREDIT UNION HAS LISTENED TO ITS MEMBERS!

All that glistens

BARRY MCCALL

PERSONAL FINANCE

GOLD HAS LONG held a fascination for humankind. It has been valued since prehistoric times and has been used as a currency almost since the dawn of civilisation. Anthropologists and archaeologists differ as much as economists on why gold holds such a special place in our hearts.

Some claim it’s qualities of scarcity and durability strike an innate chord within us and we somehow instinctively know and appreciate its value. Others point to the fact that gold is not actually all that rare and that its production in modern times is tightly controlled by a cartel of major mining companies. They also point to the fact that the ancient Incas placed almost no value on gold and initially found the obsession with the stuff of the invading Spaniards to be quite amusing.

This latter school of thought claims that gold is pretty and soft and thereby easy to work and so was a natural metal to use for decoration and ornamentation. They also point out that it’s been pretty useless for anything else until the 20th century when the high-tech industries created new demand for its highly conductive properties.

Regardless of which is the case, the fact remains that gold has been seen as an investor’s safe haven almost since time immemorial. That sentiment has driven gold to what appear to be astonishing heights this year. Indeed, it reached $1,921 per ounce in the first week of September. That represented a rise of 24% in the first eight months of the year following on 11 years of price increases.

That’s great news for anyone who bought gold over the past few years and intends selling it pretty soon. Most commentators believe it is now near its peak and that its price will settle back over the next while. Indeed, in the second week of September the price of the metal fell back 4.6%. This indicates a new volatility in its price that hasn’t been seen for some years.

The question most people are asking is if now is a good time to buy gold. The answer is probably not. A Look at the experience of the people who bought gold last time it hit a historic high is instructive in this regard.

Gold’s last peak came in 1980 in a similarly recession hit world. There had been a flight into gold as investors lost confidence in equities, currencies and other assets. Gold reached $825 per ounce that year while the US consumer price index stood at 82.4 at year end. The price went steadily lower until 2001 when it hit a low of $253. We are now in the eleventh straight year of increases with the new high of $1,921 being recorded.

This would seem to indicate a tidy return for anyone who had sat on their investment since 1980. However, the american consumer Price Index now stands at 226 meaning that gold price would have had to have risen to €2,262 just to have kept pace with inflation. In other words, our 1980 investor would be sitting on an inflation adjusted loss of $341 per ounce 15%. That’s pretty disastrous for a 30 year investment.

As with almost any investment, timing is everything. Deciding when to get in and when to get out tend to be crucial success factors. If you think gold is going to continue on its 11 year run then it may well be still a good idea to buy the stuff. On the other hand, if you agree with most of the independent commentators and accept that it is at or near its peak it’s probably better to keep your money in even safer havens like government guaranteed deposits.

Ford Focus Zetec 1.6 TDCi Saloon

DAVE WALSHE

MOTORING

THE NEW FOCUS is the best selling car in Ireland and cements Ford’s position as a national favourite. Ford swaps the top manufacturer slot with Toyota and Vw but the Focus is nearly always the best selling car. Not surprising really as it is a damn fine car, dating back as it does to 1998 when it first appeared. (declaration of Interest: Mrs. W owns a Focus now).

When I chose the car to test, I specifically asked for the saloon version, which is usually the one I avoid. I chose it because I think the saloon is the best-looking version of the Focus. I was hoping to be enlightened as to the saloon obsession of Irish drivers. In the flesh, the saloon really is a pretty car. In some ways it has made a leap in size and resembles the Mondeo very much. This is a big car. The front of the new Focus is striking with a new corporate look. The interior adopts a look that I first saw in the Fiesta and more recently in the C-Max. I loved the supportive seats in twotone finishing. The materials, fit and finish are excellent and as you would expect from a modern Ford. I loved the blue needles in the dials and the cool, white, led interior lighting. The integrated radio/information centre is comprehensive but I couldn’t, intuitively, figure out how to switch between the memory stations from the steering wheel controls. Of note are the stalks either side of the steering wheel, which felt differently good. I can report I still don’t get the saloon obsession. Whilst the boot space is enormous, the opening to get stuff in and out of it is tight and narrow. Why the saloon shape wasn’t only used for the hatchback is truly lost on me.

My test car had autoparking, which is a feature that automatically parallel parks the car. Hard to believe until you see it in action. It is wondrous and, critically, it works. More of this, please! also on the car was 17” alloy wheels and rear privacy glass, a Bluetooth Pack – including voice control with uSB/iPod connectivity, a front windscreen demister and the best manual handbrake available – well worth a look see.

The 1.6 diesel engine with its six-speed gearbox pushed this car on very nicely. The cabin is whisper quiet and the overall refinement of the ride is incredible. This car is so, so premium, while being a ‘Band A’ car. I did city and motorway driving effortlessly. Only in the middle gears would I have liked a bit more power.

You can’t marry all your desires in to one car but, boy, have Ford tried hard with this car. I would have liked cruise control and I’m sold on the missing autolights now. These are trite and can always be specified as options. My summary: I love the saloon’s look, the hatchback is better; but I’d buy the estate.

We have listened!

SIMON DUNNE

ST PATRICK’S CREDIT UNION (ESB STAFF) LTD.

THE BOARD OF directors amended St Patrick’s credit union’s lending policy in april. Reflecting the economic climate and following changes in legislation and guidelines issued by the Financial Regulator, these amendments were implemented to ensure that we continue to protect members’ savings.

The Board also agreed that it would further review the lending policy after obtaining feedback from members. The Board has listened to all feedback, opinions and suggestions and has resolved to make a number of amendments that will make the policy more flexible but, at the same time, still continue to protect members’ savings.

The main changes relevant to members relate to when the submission of supporting documents is required with loan applications and are detailed below (for a full list of supporting documents, please see the loan application Procedures page on our website www.stpatrickscu.ie).

Members applying for loans below their share balance:

Supporting documents are not required and the member declares that he/she will not withdraw shares below the loan balance (during the term of the loan, should a member wish to reduce their savings below their loan balance, their ability to repay the outstanding balance of the loan will need to be demonstrated).

Members applying for loans:

a) Up to €5,000 above their share balance.

Or

b) Up to €2,000 where 30% of a previous loan balance has been paid off.

It is at the loan officer’s discretion as to what, if any, supporting documents are required. This discretion will be determined by the member’s profile, e.g. age, length of time with ESB, borrowing history, etc.

Supporting documents will be required for all other loan applications.

The Board welcomes and appreciates feedback and suggestions from members in relation to any aspect of the credit union’s operations and services.

Please see our website www.stpatrick-scu.ie for further details and please phone Simon or Siobhan on 01 6325125/01 6325121 if you have any questions.

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”

Why have the amendments to the lending policy being implemented?

1. To ensure that we continue to protect members’ savings.
2. Due to feedback from members.
3. Due to the economic climate.

Important Only one entry per person, no mail entries acceptable, and the closing date is the 30th November 2011

Last issue’s winner Gerard Vaughan, working in Rosbrien, Limerick. Congratulations Gerard and your iPod nano is on the way out to you.