"I am semi-retired and live in a country far away from the action. Consequently I tend to take long term positions, especially in the precious metals. However, seeing the trades that you do from time to time I can't help wondering if you have done some analysis as to how your trades over say a 1, 3 and 5 year period have panned out compared with what the result would have been had you held similar positions throughout the period on a long term basis. Look forward to your reply. Keep up the good work!"

David Fuller's view And thriving on all that spectacular South African scenery, fine weather, good food and wine, I trust.

The first point on this subject is that I never encourage people to take up trading if they have no prior experience of it, preferably developed at a young and therefore resilient age. The reason for this is that trading in futures contracts is much more difficult than long-term investing, in my opinion, primarily due to the double-edged sword of leverage.

Most of what Fullermoney focuses on concerns investments, as you know. However I also trade for my own account because I have lived in London for most of my adult life and the research firm that I joined in 1969 and developed was majority owned by a commodity broking firm at the time. Trading was an opportunity to build capital because like so many people, I was born without it and knew that there would be little or no inheritance.

Tax on trading gains was particularly high in those early days but fortuitously a couple of start-up firms introduced financial spread-betting in the mid-1970s. They had identified a loophole in the UK's onerous tax system. Briefly, because the Queen (and I believe this pre-dates her reign) and her subjects were interested in horse racing, there was no tax on financial bets. I was not interested in horse racing but I was able to bet on futures and as a UK citizen the gains were tax free.

This tax advantage has survived because most people lose money on spread-bets, by a ratio of 10 to 1, according to some estimates that I have seen. These losses are not offsetable against either capital gains or income. Therefore, if spread-betting were somehow asymmetrically singled out as less socially redeeming than a flutter on the horses, and declared subject to Capital Gains Tax, it would be a revenue loser for the Exchequer far more often than not.

The gentleman who wrote this email takes "long-term positions, especially in precious metals." I know that many other subscribers also hold substantial investments in the sector, mainly in bullion funds. Well done for seizing your opportunities in the markets. You have been on a 12-year roll, and counting. The only time to reconsider this strategy and take some profits, in my opinion, is: 1) when gold, silver, platinum or palladium bullion soar above their 200-day MAs, most likely on temporary supply fears; 2) when central banks are raising short-term interest rates above CPI inflation in an attempt to rein in cost pressures. Meanwhile, we man never see a better fundamental driver for precious metal prices than all this QE from the world's major central banks.

I will continue to spread-bet in futures, mostly precious metals, because it is tax efficient provided one is successful. However, when things go well I shift capital out of my spread-bet account, as discussed earlier this month.

On a related subject, I feel certain that any early indications concerning the improvement or deterioration in labour relations regarding miners in South Africa would be appreciated by the Collective. To date, precious metals have been primarily a demand story. If they also become a supply concern story due to prolonged labour unrest, demand will only increase