Blog – David McCarthy, Galway Talks, 24/04/2014

galway-bayfmQuestion:   Do you think Gold is a good protection against financial uncertainty?

Answer:  Unfortunately some people have had this love affair with gold as they think it will be a protection against any sort of downturn in financial markets.  It is important to remember that gold is a commodity like any other and there are multiple factors which affect the market price.  This has been borne out by the fact that gold touched nearly $2000 per ounce during the financial crisis and is now trading at around $1250.

I would caution against anybody buying commodities due to the risk level.

Question:  I am a guarantor on a loan for my son and he is in arrears.  If the bank take legal action against him will I be liable for the full amount that he owes?

Answer:  Unfortunately as a guarantor you are liable for the full amount of the loan if your son defaults.  Banks have taken early action recently by informing guarantors of any arrears on a loan.  It is extremely important that both you and your son engage with the bank and come to some sort of an arrangement rather than allowing them to call in the guarantee in full.

Question:  I am looking to put money into a pension, is there any particular fund that you would recommend?

Answer:  There are hundreds of funds available with varying risk levels.  Rather than directing you towards one particular fund I would strongly recommend that you get advice before taking any action, so as to ensure that you have the appropriate structure for your circumstances.

Question:  Would you recommend investing in US Dollars?

Answer:  Like gold, buying currencies is a high risk step to take.  This is due to the fact that there are so many factors which affect currency movements and it is only an investment that should be undertaken by a very experienced investor.