“I have received marketing material from Investcare Amathubagold and I want to know if this is a good investment opportunity,” asks Henry.

Investcare Amathubagold describes itself as a Precious Metals provider and offers a Precious Metal Investment Savings Plan (ISP).

Maya replies: I have not heard of this company before but my warning flags went up when I read the brochure. This is not a regulated product and the person marketing the product is not a regulated adviser so there is no protection if something goes wrong.

Rather than going with an entity you are not familiar with, you can invest with Absa NewGold which is an exchange traded fund that tracks the rand price of gold and you can invest for just R300 a month.

In terms of buying gold make sure you are not being caught up in the tail end of a gold rush, which can be dangerous territory.

Over time the stock market outperforms gold simply because the market generates an income. When you invest in shares of listed companies they pay income (dividends) out of their earnings. That creates a value that grows over time.

Gold is a very sentimental investment as it really is a gauge of the world’s fear levels. Gold tends to do well in very uncertain times, which is why it has performed very well over the last four years when the world’s economies have been unsettled. However once the global crisis has passed and people move out of gold back into other investment assets like shares and property, the gold price will fall. The question is how long the global crisis will continue for.

On that note, personal finance guru Suze Orman recently tweeted that we should hold 20% of our long-term investment porfolio in gold. Personally that seems excessive for a non-income generating asset and I prefer dividend over sentiment as a driver of long-term returns. But some gold as a hedge against a uncertainty has its place.