We will begin to compare tradable assets which, based on previous blogs, we consider recommended in the current climate.

But firstly, what do we define as the current and future climate?

1. Frequently volatile in the short-term
2. Record government deficits threatening the most “secure” of investment products
3. Poor equity performance
4. A forecast for a high inflationary environment post QE alongside continually weakening currencies.

As a result we believe that inflation hedging investments in tradable assets are the way with which we can best preserve our wealth.

Two excellent choices therefore are gold and wine. Should you only be able to invest in one or the other, which should you choose? Below is an objective comparison and at the very least, some food for thought when considering these asset classes:

• Quick income - neither are income producers unless they are bought in bulk and sold off individually (whilst also timing the market precisely) so they must be held for a period of time (typically 12 months minimum, 2-5 years usually)

• Recent performance – From November 2008-9, Gold was up 50%. The Lafite Rothschild 2008 made 45% gains in 9 months.

• Ongoing returns – the difference between gold and wine is that wine is essentially a number of products with differing shelflives and maturing ages, whereas gold is only the one product. For example, the Lafite 2008 might make 50% gains in total. You may then sell and buy a different vintage, the Mouton 1996, which also experiences 50% gains. Gold, after one 50% rise, is unlikely to continue growing at 50% per annum, as would any singular product/share/stock, etc. Therefore it will struggle to stick with those ambitious growth forecasts in the long term.

• Supply – Gold’s supply is well documented as dwindling which is likely to keep prices high, at least in the short-term and whilst markets remain volatile. It is why you see so many “cash for gold” adverts in the UK. Vintage wine supply is more unpredictable although a vintage generally decreases in availability as it gets older and gets consumed! What happens with wine is as one vintage ends, another begins, giving the investor ongoing opportunities. A good broker is an essential tool when understanding supply and the knock-on effect of when to exit the market.

• Demand – both products are likely to experience high levels of demand, at least in the short-term. Gold is the inflation hedge, and wine because its price point is perfectly poised to retain consumption from all levels of the investor spectrum. At £8,000 per case approx., the entry level investor can afford it, and so can the multi-millionaire. The rich may not be buying £20m yachts at the moment, but high quality vintage wine still represents a tiny % of disposable income. It is also worth noting that wine (along with make-up), are 2 of the best performing products in any recession. When the population feels down, they tend to cheer themselves up with alcohol.Demand for both has also had a big shake up geographically. Traditional old money is being added to in huge volumes by new money as well as emerging nation demand from high population countries such as Brazil, China and India.

• Durability/Storage – both products can come with storage and ultimately protection. Wine bottles can break, and therefore gold may be considered more durable. However, the strength of storage, plus insurance, means you are now well covered in this unlikely eventuality.

• Your economic viewpoint – Should you believe the world is going to recover, it is likely that gold has reached it peak and will not provide further returns, if not future losses. If you believe the opposite to be true, gold could, as some forecast, treble in value. Vintage wine is less likely to be disturbed by economic cycles, but one must conclude that the less demand, the more volatile the pricing could be there.

Although both products are strong investment contenders in a volatile, downturning market, gold relies on certain economic conditions to rise in value whereas wine does not. In a market that continues to go down, in particular coupled with a weakening currency and inflation, gold would continue to rise in value. However, wine would also rise as a fellow tradable asset (as has been seen with the rises in vintage value in the last 2 years).

Ultimately wine has a more subtle manoeuvrability compared to gold in that wine is not one product, it is several products, born at different times, with natural price peaks based on its age rather than its dependency on the economic cycle.

Therefore, if you can, it is wise to diversify into both asset classes. Both are strong products, but if you cannot, your economic viewpoint will be crucial as will your investment performance requirements. If you strongly believe the economy is yet to sink to the bottom (and has a long way to go as well), gold is your best bet. If you are looking for more flexibility within varying market conditions, wine is a much better prospect.

A very good question if you don’t know…and you’re unlikely to as this is not a well known sector. However, as we like to do at Discover and Invest, we can prove to investors that this route offers a high level of secured income backed by some surprising macro-economic fundamentals. It is also a sector we know well and can fully manage for you. Allow me to explain….

The investment concept exists because of the need of many farmers for short-term funds. This is down to either expanding or restructuring their businesses, particularly in light of many new EU directives which require new and costly upgrades. Farmers, as is widely known, are cashflow poor but are extremely asset rich, an asset which can be used to generate an income. This asset is of course their farmland.

What many investors are unaware of is how robust farmland prices actually are. Documented evidence shows that since records began in 1945, UK farmland prices have remained steady in each of the recorded recessions and in many places have barely dropped at all in the last 2 years. Therefore it is important for investors to understand that UK farmland is not affected by economic cycles in the same way as residential or commercial property does. Evidence from a number of independent sources is available in our packs.

So why are farmland values so robust? It is a question of supply and demand. In the UK , farmland for sale is a rare occasion and an exceptional opportunity for a neighbouring farmer to expand his business. In 1945, 1m acres per year were recorded as transacted. The numbers since then have steadily decreased to only 100,00 acres, a huge 90% drop in supply. This has been in the main because farmers have moved from tenants to actually owning their own land. Farms are passed down the generations and in order to succeed, the farmer needs to expand not contract. Therefore a chronic lack of available-for-sale supply coupled with a farmer’s ongoing expansion requirements ensure that values remain robust, regardless of lifestyle buyers. What this means to investors is that farmland, as part of a farm, is a robust product when protecting capital that also produces an ongoing income.

With the lack of funding available from banks, farmers are prepared to enter into leaseback style agreements for their farmland with private investors for an agreed timeframe of typically 2,5 or 10 years. The investor buys a portion of the farmland (usually not the property) at between 50-70% of today’s market value and rents it back to the farmer at around 8% per annum; a very competitive rate in today’s marketplace. Typically the farmer will also pay for the buying costs. The farmer pays his “rent” and then buys the farmland back from investor at the end of the agreed period for the same % discount based on the then market value. Therefore this offers the investor a superb capital gain opportunity and allows the farmer to improve his business profitability in the short-term.

Strong leaseback deals will utilise an agricultural project management team, (as we do), to ensure that a new business plan is in place and so that the farmer is monitored on a quarterly basis for the investor. This ensures a smooth, hands-off and full managed product that so many investors fear they will not otherwise receive. The product is also SIPP/SAAS compliant.

With regards risks, with such a strong initial equity position, you would need UK farmland to fall by more than 30% in order for your capital to be at risk; something which has not happened since records began, nor is it likely when taking into account global demand for food and the fact that we still have not found ways of making food without the use of farmland!

So in difficult economic times, it is possible to find deliverable, high income, secured products. If you wish to find out more, please register or email enquires@discoverandinvest.com

2010; a new year, a new start. But in some ways, we have been here before.

This is not the first time we have experienced a recession, and as tends to happen, governments spend their way out of them. New infrastructure projects, more public sector jobs, and that now oh so familiar phrase, Quantitative Easing, or QE. In other words, the government is flooding the markets with money to stimulate action.

Although deflation has been an equally used buzzword in 2009, as the lack of demand has in some instances had a downward effect on pricing, the smart discussions revolve around inflation, the natural consequence of “too much money chasing too few goods”. Inflation, that by-gone concept of the 1970s! In fact inflation is all around us, with a particularly constant pressure on currency over the years. How many remember when a chocolate bar was 10p?

Although there is a split between forecasters, significant evidence points toward a higher inflationary period and an increasingly weak Sterling/Dollar fuelled by unprecedented government debt. Current house price rises, driven by a lack of available supply are likely to be short-lived rather than upward demand (as sellers wait for prices to go back to “break even” levels) , as the resultant supply increase will outpace demand does increase through higher interest rates. The stock market is having one of its roughest periods on record. Therefore, where can investors look for not only safety, but also results?

In volatile times coupled with vulnerable and weakening currency values, tradable hard assets become investments of choice. The likes of gold, silver, farmland, wine and stamps have proven to retain value in tough times as the measurement and value of cash becomes uncertain. Regardless of the measurement of exchange, or currency, these products show value and become excellent locations to park and secure wealth whilst the world begins anew.

Throughout January and indeed 2010, we will explore inflation hedges in more depth, with the next blog giving investors a comparison of the available options. There are some cracking opportunities even in these times, so I look forward to welcoming you back for another instalment in the next few days.

Since the commodities boom of 2007, investors have increasingly come to realise the underlying benefits of investing in farms. An often misunderstood sector largely due to an unbalanced media view point, this article hopes to redress the balance and inform

In the current climate and to help educate, below are the top 10 reasons to invest in UK Farms:

No over-supply, robust local demand

It has been said many times regarding land, and it is as true today as it ever was, they are not making anymore of it. On top of this, less and less parcels each year are coming onto the market to be sold. According to Reed Business Information’s The Farmland Market Report, there is a huge dearth of land for sale and the volume of sales has been on a steep decline since in 1950. 1 million acres were traded then compared with around 100,000 in 2008; only 10% of the previous high. This is mainly down to the fact that there are many more landowners now than 60 years ago and most do not look to sell unless absolutely essential.

As a result oversupply issues that have hit the commercial and residential property markets are highly unlikely to effect the farmland market. In fact, evidence from experts shows that farm prices remain stable in this and previous recessions and are going up slightly compared to residential property.

As for demand, levels remain strong from local farmers, who are always interested in local businesses as they tend to be “once in a lifetime” opportunities to buy. The only drop has been from lifestyle buyers, who make up a much smaller percentage of the overall market.

Excellent defensive investment against inflation

It is widely regarded that higher inflationary times are around the corner given the extraordinary levels of global government spending combined with the rare sight of extremely low interest rates at the base of a recession. The value of currency has always been eroded by inflation and the next few years may see this increase. There is much talk of a global currency in the future if fiat currencies continue to decline in value. Therefore, the smart investors are looking for tradable assets which can retain their value in more volatile times. UK Farms, and in particular the primeland that they sit on, present such an opportunity to investors.

Tax/pension benefits

Depending on the type of vehicle used, a number of tax reliefs are available to investors, such as Inheritance Tax relief. It is also worth noting that in many cases, farmed land qualifies for SIPP and SASS, the popular UK pension schemes.

The UK presents an extremely secure environment

Due to the UK’s property and land laws, the country is considered one of the safest environments to invest in globally. Although returns may be higher in emerging markets, those investments quite often carry a very high degree of risk.

Undervalued due to weak Sterling

Not only is the UK secure, but its prime farmland can be considered undervalued. The first of these reasons is down to the currency movements. Sterling has declined sharply over the last 18 months, which effectively means the country has a “30% off” sale sign over it. International investors who buy now will have the benefit of profiting from any reverse currency movements as the economy improves.

Buy at 70%, re-mortgage at 100% of the valuation

The second reason for the argument of value is that farms can be picked up in the UK at around 70% of their valued price. This presents not only a capital gain opportunity but also presents a liquidity opportunity. Banks will lend at 100% of the valuation which means an equity release is entirely possible.

8-15% yields achievable

Depending on the project, 8% yields are achievable in the UK; with leaseback deals buying at 60% LTV, the yields are as much as 15.9% based on a project available right now. Compared to the options available in the UK ie. Bank deposits 1%, volatile stock market, property yields dropping below 5%, income is a particularly pleasant current upside for investors.

Buyback option can provide extra investor security

One facet of investment that is always of concern is the exit strategy. If a lease agreement is in place, investors can have extra security that the tenant farmer will buy the farm back at an agreed price level 2,5 or 10 years into the future. If they cannot, this would trigger an event of default, which raises the next benefit of farm investments.

Strong evidence shows farms sell quickly

Again, mainly due to the lack of supply in the marketplace, farms and farmland usually takes 3 months to sell from agent instruction. If you are investing through the right companies, there should be an all-in-one solution available in terms of managing and selling the farm, either by choice or in event of default.

Investment period as little as 18 months

If the farm has been purchased and leased back to the farmer, the investment period can be as short as 18 months. Therefore tie up of capital is the same period unless you are able ot release equity and also allows for potential capital gain opportunities.

Therefore there is a lot to like about farming and agriculture from an investment point of view, particularly in today’s market.

‘Lafite prices climb as investors pile into wine’. Telegraph, 1st August 2009

Great news to tell you about, wine investing is the place to be! Our clients received information regarding the outstanding yield curve for the ‘1982’ vintage with strong evidence and support for the nearest equivalent ‘1996’ and ‘2003’vintages to potentially emulate performance. As of the last two months the ‘96’ has seen a hike of 11.76% which now means it is up 19% since March, the ‘03’ likewise by 4.7%……We conclude that both these wines as well as some select counterparts are trading at higher prices and are now entering a period of likely significant growth based on the same supply and demand characteristics previously outlined.

The wine investment market has rallied since the beginning of the year as the industry index for the top 100 wines moved by 1.5% per month; however the star performer amongst these wines has clearly been Chateau Lafite Rothschild. Several vintages have provided strong, tax free returns this year and more significantly, two of the vintages strongly recommended to Discover & Invest clients have performed as we had predicted.

Therefore a strong argument for the increase in further value remains and is also being echoed by the financial press, as demonstrated by the recent Daily Telegraph article below:

‘Lafite prices climb as investors pile into wine’. Telegraph, 1st August 2009

The graph below gives some perspective on the Lafites, particularly over the last year or so of turbulence. The relatively low price point for this luxury item compared with cars or yachts means its basement point is quite high. In other words, demand remains robust because buyers at both ends of the wealth spectrum are able to buy and continue to speculate.

The fifth of November 2008 is a day I will remember for some time. Now I know what you’re thinking, that’s the day a few centuries ago when a certain Mr Fawkes decided to try & blow up the powers that be, right? Or maybe that I went to a rather spectacular fireworks display? Neither of these were the case in this instance. That morning at around 10am our Ambulance Trading investment opportunity was emailed to one of our partner’s databases. I can remember telling my colleagues that I will be happy if we can generate 15-20 enquiries – after all, enquiry levels must be down as we prepared to head into recession.

After the eightieth enquiry had landed in my inbox just after 6pm you could say I had encountered my busiest day yet at Discover And Invest! Over the course of the following few days more filtered through ensuring that yours truly was putting in some seriously long hours!

Amongst this number was a variance in terms of quality, from those who were too afraid to hold a conversation over the phone to those who invested. In between were all extremes; those whose level of liquidity fell below the entry level, those who had no real interest, those who absorbed the information never to be heard from again, agents sniffing around and those who I simply could not contact! As all the enquiries are submitted in the same format, it’s impossible to gauge the level of quality until contact is established.

Investing is very similar in this respect. There are still so many opportunities out there ranging from property to bonds to shares to alternatives etc. How does one accurately appraise each individual opportunity? Which ones are most likely to do what they say on the tin and provide the promised returns? Which ones are the scams? Which ones are the big gambles?

Whilst there are no blueprints for what’s good and what isn’t, it’s fair to say that the usual rules apply. Over the course of sifting through the enquiries I received, the level of questioning was considerably higher than I expected – good! This goes to show that investors are doing their research, it shows that they are familiarising themselves with the workings of the opportunity, and it shows that where applicable they are using their experiences –both good and bad – to base their decision as to whether or not to take it further. Whilst this continues to be the case, those marketing the decent secure opportunities are certain to prosper.

£130 per month profit from month 1, guaranteed for 12 months?  It’s Discover and Invest of course!

Following on from our ambulance and renewable energy offers, Discover and Invest is pleased to announce yet another income generating opportunity that is sure to deliver.

Chris Davidson, Managing Director for Discover and Invest tells us that “whilst sourcing for 2009, and although we usually get involved in alternative income generators, we noticed that the UK property market was starting to show real value.  Prices had fallen, yields had risen, and a good quantity of cheap stock was available to the market.”  Therefore as usual the problem is separating good deals from bad.

Davidson continues: “there are various problems facing would-be  property investment buyers today: lots of stock without tenants resulting in poor cashflow forecasts, problems getting finance because the rental valuation coverage is too low (125% minimum these days), valuations getting downgraded too often meaning valuation funds are risked time and time again only to find the deal falls through.  Finally, in a market where the value is good and the immediate bonus is strong cashflow from rentals, how do you secure the rental income?”

We’ve finally come up with a deal that knocks the socks off just about all property deals at the moment.  Firstly, our deals guarantee a 20% discount from today’s RICS valuation, with only a 5% net deposit down.  The properties we are sourcing are rentbacks, so you have quality tenants in your property from day 1, paying from day 1…so no worries about finding tenants, how long it will take to get them in, and whether they will look after your property!  Remember the property used to be the new tenant’s home, so it will be filled with their own furniture, etc.  This is much more likely to mean you have stable cashflow and good quality tenants.  The new tenants also sign 12 month contracts on premium rent, meaning excellent cashflow and low hassle for you as the rental management company is in place.  Furthermore we have teamed up with Endsleigh Insurance to provide their rent guarantee scheme.  This secures your rental income for a period of 6-12 months.

We are also so confident that the valuations are accurate, we will pay for the buyer’s valuation, means no funds are risked.  If the valuation is downgraded, the seller will have to downgrade proportionately.  If they physically cannot, all parties walk away from the deal and no funds have been risked!  Furthermore, lenders need to see 125% minimum rental valuation coverage, so we will only supply properties that stick up unless the buyers pays in full with cash.

Our first property is being released on Tuesday in Cheshire.  Valued in the last few weeks at £115,000, the property is available for £92,000.  Monthly cashflow after mortgage, rental management and insurance comes to a whopping £134 per month!  Total net buying costs are £8,450 so this gives a return on capital employed of around 19%.  With £23,000 of built in equity as of today, there is sufficient leeway if the markets falls, and also built in profit for when the market recovers.  If you were to sell your property in a year’s time for the same price plus your rental income, you would have made a return of 250% on capital employed!

Chris Davidson Managing Director of Discover and Invest states that: “many analysts believe we are in a U curve recession now.  Property prices are nearing the bottom in a similar way to what has happened in Florida.  The bottom may take a while to turn but it also gives strong investor signals to buy up stock at value prices.  We are all taught to “buy low, sell high” and the first part of this equation is nearing the right point for many.  Now it is about finding the right deal.”

So yet again, Discover and Invest has hunted out the right deal for this market: accurate discounts, low risk, strong cashflow and secure income.  If you take the view that we are nearing the bottom, why not check out the deal at www.discoverandinvest.com

29 January 2009, London – Currency Solutions are pleased to announce their partnership with Discover and Invest, an investment consultancy firm.

As the credit crunch grips its tight fist around the global economy, more and more people are looking for creative ways to invest and save money.

Over the last year, currency markets have suffered unprecedented volatility. The Pound has declined 25% against the Euro alone lending a significant degree of volatility to your international investment. Now, as the global economy slides into a deepening recession, the business climate is facing a new series of challenges.

Managing Director, Chris Davidson commented “Discover and Invest is delighted to team up with Currency Solutions. We wish to align ourselves with market leading partners in all related industries so our clients get the most professional, efficient and effective service we can offer and Currency Solutions ticks all the boxes for us. Our clients invest from all over the world and therefore we need a 1st class global currency service for them.”

“As a consequence, more and more people are looking for creative means of investment and ways of improving their bottom line. It is in this context that Currency Solutions and Discover and Invest are proud to announce their partnership, aimed at helping businesses and individual clients beat the credit crunch.”

Discover and Invest is a fresh new consultancy with the clear aim of providing investors with new, exciting and alternative opportunities in the current climate that are income generating early and realistically secure.

With experience in sourcing and selling deals in over 20 countries, it is apparent that in today’s market, there is a need for alternative opportunities to those that are run-of-the-mill and that do not deliver. With this in mind, Discover and Invest seeks to bring to market opportunities that are better created, generate income early and that above all, deliver!

Currency Solutions are specialists in the foreign exchange industry, providing bank-beating exchange rates and reduced currency risk to businesses and individuals. With a first class personal service and flexible trading options, Currency Solutions have helped over 20,000 clients to save time and money in all of their foreign exchange. In partnership, the two are set to help both businesses and individuals with their investments, despite the deteriorating economic outlook.

Dr Tien Tran, Chairman of Currency Solutions is optimistic about the partnership. “In light of recent market turmoil, how when and where you conduct your foreign exchange has never been more important. We are proud to offer our services alongside those of Discover and Invest. We look forward to helping our business and individual clients beat the credit crunch!”

For more information, please visit our dedicated currency page by clicking here, or find our full contact details on our contact us page, by clicking here.

If you’re a global investor, there is one country in the world today that is screaming value for money… and it’s the UK.  Why so I hear you cry?  Well, there are two main reasons why, the same two reasons in my view that has made the USA a value for money buy over the last 2 years.

The first reason is a weakening currency; typical of an economy in a downturn, one that is importing more than it is exporting or of one that is printing vasts amounts of money, or  potentially all three.  The weakening of a currency, relative to your own means better value purchases.  Many Brits indeed found that to be the case when buying American over the last few years at as much as 2 Dollars to the Pound.  Times they have a-changed though!..Xe.com tells me that 1 British Pound Sterling buys me but 1.38 US Dollars, a fall in the last 9 months of around 60 cents, or in percentage terms,  approx. 31%!!!  So if you’re making an investment purchase in the UK, there is certainly inherent value compared to even the most recent past.

The second major reason is falling house prices, which begins to give this type of investment market inherent value too.  Property prices have fallen approx. 20% from their peak 18 months ago, and therefore considered better value.  Discounts are also being offered in the region of an extra 20% on distressed and new build sales, which provides further value.  Therefore investors are  taking the view that these discounts provide built-in equity in case we have another year of falls.

Finally, rental yields are now in the region of 8-9%, which means on the typical mortgage, cashflow positive deals of around the £100 ($138) per month mark are starting to appear.  With interesting new 12 month insurance policies available from major brands to protect rental income, these deals are incredibly attractive.  Some valuers will even pay for your valuation for you so no expenses are necessary until you know you can get a mortgage and the valuation is accurate.

So it’s easy to see why property investors are taking the view that the current UK deals are great value, income producing straight away and extremely secure.  On top of this, a long term view means the profits are much more substantial than in a boom.  We are all taught to buy low, sell high.  Well here is the chance to put the first part of that equation into practice…whether it is property, or an alternative investment, companies like Discover and Invest can help you to see why the UK is worthy of your attention.

In today’s business world, technology and communication have developed into a global phenomenon that continues to improve on a rapid scale by the day. Living in such a fast-paced and growing society where companies are expected to deliver yesterday, a company’s organisational systems are key!

Gone are the days where the office administrator hand-wrote all correspondence, and appointments were kept in a paper diary. Nearly every business uses an internal computer-based system to increase communication and productivity within the office.  This requires instant access to files whether you are in the office or away on a business trip, access to your own diary appointments as well as team members, client contacts, company expenses, etc.

Most businesses have some form of internal company structure that they use for all the day to day needs of running their office. However, few companies integrate all of their systems in one place. There are clear advantages of this where each employee can refer to everything they require in order to undertake their role efficiently within the company. There are very few options for those who want to manage their office affairs from both their desk and elsewhere, but having the ability to easily access company data from any computer is invaluable, whether it is in an internet café, a client’s office or a friend’s house, and all that is required is access to the internet.

Discover Office Solution Suite is a private space on the Web that gives employees in a company the ability to organise information, readily access that information, manage documents, share calendars and enable efficient collaboration, all in a familiar, browser-based environment. Because all important business information resides in a central repository, it’s available at any time, from anywhere in the world, using a simple web browser.
Authorised users outside our company such as our remote workers, suppliers, partners or clients can also use it to collaborate, communicate and share business critical information. Discover Office Solution Suite enables us to:

• Share documents with anyone we authorise
• Schedule meetings and sharing calendars with colleagues and remote workers
• Conduct discussions on everything from product ideas to team member suggestions
• Create and share access to information databases, and build our own database-driven applications
• Manage and delegate action items and project tasks
• Maintain standard contact directories of all our team members, suppliers and customers
• Conduct opinion polls among one another
• Post announcements and sharing web links

Now having an equipped tool that fulfills all of our operational requirements not only enables us to perform well as a company for our valued customers and clients, but also as a team where, even if we are not always together in any one day, we are all fully prepped on what is going on at any given time.

The unique set up of Discover Office Solution Suite enables companies to take their work anywhere and thus not restricting our time to one place. Upon arrival, if some documents had been damaged in storage on the flight and were not in a presentable condition for a meeting the following day, this would ordinarily have posed a problem. However, because these are stored on the company Web Documents, they were easily accessed on the client’s computer and re-printed ready for the meeting.

Find Out More - http://www.discoverandinvest.com/office_solutions.htm