Is it time to dump my gold? and Emerging markets at home

Question: I took some money from a maturing CD and bought gold when it was selling for around $800 an ounce. How can I know when it’s a good time to sell this gold and reinvest elsewhere? And what should that elsewhere be? –Christine, Cocoa Beach, Florida

Answer: There are plenty of people who are willing to speculate on where the price of gold is headed.

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Indeed, two luminaries of the financial world — investing guru-motorcyclist-bowtie buff Jim Rogers and New York University economist Nouriel "Dr. Doom" Roubini — squared off on this very issue late last year. Rogers predicted that gold would rise to $2,000 an ounce, while Roubini called that notion "utter nonsense" and said it would settle in at around $1,100 or so.

For one thing I believe that trying to figure out the best time to enter and exit the gold market makes about as much sense as trying to time the stock market — i.e., none at all. [Read the full article]

The MSCI Emerging Markets index has risen 67% in the past year, and China’s main stock index now trades at a price/earnings ratio of 32, more than 50% higher than that of the S&P 500. Investors find themselves in a quandary: Yes, new economies have the richest potential, but who can afford those prices?

Some international stock managers have found an answer. They’re buying shares of companies in established economies that have significant exposure to emerging markets. Giant multinationals like Siemens (SI), Unilever (UN), and Procter & Gamble (PG, Fortune 500) now get more than 30% of sales — and their fastest growth — from places like China, Brazil, and India.

It’s the best of both worlds," says Keith Walter of the Artio Global Equity Fund (BJGQX), whose 3.5% annualized return over the past five years beats developed-world stock funds by 1.4 percentage points. [Read the full article]

More than 1.4 million Americans were audited last year, the most in a decade. Even more audits are expected as the Obama administration plans to spend $8.2 billion in tax enforcement initiatives in 2011, a nearly 10% increase over last year.

Being meticulous with your tax return may seem obvious, but many people aren’t careful enough. And with the IRS seeking to collect every penny it can this year, you could end up paying for even the smallest mistakes.

While the IRS doesn’t reveal its secret formula for flagging returns, here are some tips to avoid popping up on the auditor’s radar.

With a record-high jobless rate, many Americans have turned to self employment, making the IRS increasingly skeptical of the legitimacy of home-based businesses, said Robert Willens, a professor of taxation at Columbia Business School and president of Robert Willens LLC, a tax consulting firm. [Read the full article]

Toyota is planning to suspend production at two U.S. plants as sales lag following the automaker’s massive recall of its vehicles.

Mike Goss, a Toyota spokesman, said the company will retain all of its workers during the suspensions, which will take place at plants in Kentucky and Texas in the weeks ahead.

The temporary shutdowns are aimed at adjusting production levels following a series of recalls that forced Toyota to halt sales of some of its most popular models.

We don’t want inventory to build up for our dealers," Goss said. "We can’t keep sending vehicles to dealers until they can start moving those vehicles."

He said the company has used other methods to slow production in the past, such as limiting overtime, but that elimination days are kind of the final step in that process."

The Kentucky plant, where Toyota’s top-selling Camry is made, will not produce cars on Feb. 26. [Read the full article]

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