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All that glitters is gold, this according to Toronto-based Bullion Management Group (BMG).

BMG predicts that gold prices will continue their rapid rise, matching their 314% increase in the last eight years.

“The formula for inflation—rising oil prices and increasing money supplies—is already well in play and this should fuel further increases in gold prices,” says Nick Barisheff, president and CEO of Toronto-based Bullion Management Group. “For the last eight years, gold has out performed every other asset class and all indications are that it will continue to do so for quite some time.”

Defending his stand against critics at the World Money Show in Toronto, Barisheff insisted that the most important and immediate reason to have gold in a portfolio is to provide effective economic preparation for the unexpected.

“People make comparisons going back several hundred years not realizing that gold was money at a fixed price until 1971. However, since then, the numbers clearly show how the metal works as an inflation hedge. Compared to the CPI since 1971, gold has outperformed inflation continuously throughout the entire period. Even during the bear market decline from 1980 to 2001, gold outpaced inflation,” says Barisheff. “The best investment strategy for the next 20 years, and the best way to prepare for the unexpected, is to preserve the wealth we already have.”

Barisheff is not alone in his thinking.

Standard & Poor’s equity analyst Leo Larkin says he has a positive fundamental outlook for gold—and gold mining stocks—for the next 12 months.

“Based on our expectation for increased production and a further rise in the gold price for 2010, we are looking for another increase in sales and earnings for this group,” he said.

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Older workers’ retirement prospects are improving

Retirement is more affordable for older workers than it was at the end of 2008, according to an analysis by Watson Wyatt.

Despite the improvement, retirement is still much less affordable than it was in 2007.

As of the end of September 2009, a 60-year-old Canadian defined contribution (DC) plan member would have to work nearly four additional years to secure the same level of retirement income as an employee of the same age, with the same retirement savings history who retired in December 2007, according to Watson Wyatt’s new DC Retirement Timing Index.

“The economic crisis has derailed planned retirements,” says Lori Satov, senior retirement consultant with Watson Wyatt. “Large losses in DC pension plans are forcing older workers to make a difficult choice—accept a lower standard of living in retirement or work longer.”

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Mawer launches new fund

Mawer Investment Management is instituting a new global equity mandate. Global equity will offer clients the choice of a global equity or individual asset class approach to portfolio construction.

It will be offered through segregated management for institutional clients and through the Mawer Global Equity Fund. The mandate will be co-managed by Jim Hall, director of research, and Paul Moroz, manager of the Mawer Global Small Cap Fund.

(10/22/09)