Investment SwitchTime to buy more Precious Metals - Silver & Palladium.

By Marco Pietropoli, June 2010

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Dear Client,

Please respond to this email to confirm you agree.

This is an Up Risk move to reduce your Cash holdings further.

If you are responding for a partner or family member you are confirming that you have explained the contents of this email and they are happy with the advice.

This fund switch relates only to the following platforms:

• Transact
• SIPP Stock Trade accounts


By responding to this email you are also confirming that your Attitude to Risk (ATR), priorities and financial position have not changed. If there have been changes, we will need to undertake a review of your situation prior to making any changes to your portfolio.

We will do the investment switches online for you.


Reason For the Move

Inflation is accelerating and Cash on the platforms is losing value at a steady pace of 4-6% after taking into account inflation, plan charges, and my fees.

Time to buy more precious metals. Many of you already have some Gold and we are going to keep it for the foreseeable future. Not really that keen on extending our Gold position at present as there are all sorts of rumours about problems in the Gold market. I would like some diversification as well. The other precious metals that we can access are Platinum, Palladium and Silver.

Platinum is used for catalytic converters, I believe, so should be more exposed to a deterioration of economic activity. That leaves Palladium and Silver.

I believe Silver is a particularly good investment at present as that spread between Silver and Gold is near an all time high. Traditionally the spread is 20 times (20 pieces of Silver for one piece of Gold), but at present the spread is closer to 60 times as Silver is around $18 per ounce and Gold is near $1,200.

The Dollar is probably overvalued at present due to the weak Euro so the risk of sharp increase in the value of the Dollar is reduced to some extent. These are Dollar based investments and Sterling may well stay weak for some time to come.

These are volatile investments and could well fall by 20-30% in the near term before going up. If this were to happen we will buy more. We will be hanging on to these investments for the foreseeable future.


For those of you that would like to know more about my economic views, you can have a look at my TV interviews at: http://www.rmwm.co.uk/marcopietropoli-tv.htm or read my Economic Market Reports at: http://www.rmwm.co.uk/market-report.htm and read my Blogs at: http://www.ecademy.com/module.php?mod=blog&op=liste&uid=182278

This is an up risk move that will be done in the following proportions:

• ATR 3-4 - 5% of portfolio on a scale of 1-10 where 1 is cautious and 10 is high risk.
• ATR 5-6 - 7% of portfolio
• ATR 7-10 - 10 % of portfolio

Minimum investment is £250 for each investment.


The resulting portfolio may well be above your stated ATR.



Sell


Cash (risk 1)

Index-linked Bonds (risk 2-3) if no Cash is available

Commodities (risk 7-8) if no Index - Linked Bonds and no Cash are available.


Buy

50% ETFS Physical Silver (risk 9-10) min £250
50% ETFS Palladium (risk 9-10) min £250


If you would like information about the charges for the individual funds that we are buying please let me know. The fund/ETF charges will be plan specific.


Switch costs

Transact - £14.95 per trade for ETFs.
Fidelity SIPP stock Trade account - 0.3% of the funds move. Maximum £50, minimum £20

If you would like to discuss this move, your Attitude to Risk or if you would like further information on your plans or fund charges please feel free to contact us. For further information on your investment/pension products, please refer to Illustration, Fey Features and the Suitability Report that I have given you.



Risk Warnings:

• There is no guarantee that the new funds will perform better then the funds previously held.
• You should remember that past performance is not necessarily a guide to future performance.
• Unit prices can fall as well as rise and as such the capital value, growth and income payments are not guaranteed.
• Exchange rates may cause the value of underlying investments to fall as well as rise
• Most ETFs are securities that are designed to follow the values of the underlying assets but don't necessarily follow them exactly.
• Some Commodity ETF investments are Managed Funds and not Securities.
• The value of an ETFs security will change with the value of the underlying assets, but it may also change with the demand and supply of the security.
• ETFs may have counter party risk.
• The ETFs recommended fall under UCITS III regulation.
• The ETFs recommend and other investment are off-shore and do not qualify for the Financial Services Compensation Scheme.





Kind regards,

Marco Pietropoli