Those who do not emphasize asset allocation will get burned. Others will earn a fortune. Consider these staggering statistics:
An over-inflated balloon
The American government continues on a massive spending spree. No one can fully predict to what extent the repercussions will affect our economy. However, assets are extremely expensive as the equity market and money supply are becoming increasingly inflated. Simply looking at the S&P 500(SNPINDEX: ^GSPCmore »)
Berkshire Hathaway Chairman and CEO Warren Buffett has long been a vocal opponent of gold as an investment. Over the years, the super-investor and one of the richest men on the planet has publicly railed against the merits of the yellow metal. In fact, readers can find a compilation of the Oracle of Omaha's 7 top quotes on gold investing over at Minyanville.com.
Gold was one of the top investment choices for the last decade. People who bought gold at the beginning of the decade earned impressive profits. Even though there were downturns in price, most were short term. However, gold has lost its mojo, and is trading almost 20% below its previous high. Gold ETFs, like SPDR Gold (NYSEMKT: GLD), have lost about 15% since January.
Since the beginning of 2013, gold has remained in the spotlight. It certainly receives its share of publicity. Many traders and analysts express their opinions about the fate of gold prices. The drop in the price of gold has caused a spike in interest and demand for physical gold. For example, the U.S. Mint had ran out of its smallest gold coins. But buying coins or talking about the more »
Before I try to answer, let's review the chain of events that has taken the stock about 70% from December 31, 2012 to $9.60 today. For comparison purposes, the Market Vectors Gold Miners ETF, (NYSEMKT: GDX) is down about 40% year-to-date. Allied Nevada, (NYSEMKT: ANV) is one of the worst performers among mid-tier producers. The next worst performer more »
The recent record crash of gold by up to 27 percent lower than its original value has sent the world market spinning. Prices reduced to a low of $1,321.95 an ounce on April 16, 2013 from its previous high of more than $1,900 in September 2011. Days before April 16, gold was selling at over $1,600 more »
April 15 unofficially ended gold’s 12-year bull run when the yellow metal dropped 9.1%, the largest one-day loss since 1983. Other commodities like silver, copper, and oil have seen their prices rise, as well. Investors who had bought virtually any commodity six months ago are seeing extremely large losses. Meanwhile, investors who purchased equities six months ago are likely seeing respectful returns.
Last week, the gold price dropped below a psychologically important barrier at $1,500. Since mid-2011, the SPDR Gold Shares(NYSEMKT: GLD) ETF has lost almost one-fourth of its value, while the Market Vectors Gold Miners(NYSEMKT: GDX) ETF now trades at half of its former valuation, raising the question of whether mining stocks are a bargain now.
The drop in the miners' shares can partially be explained by the more »
Today is a day of extreme weakness in the monetary metals gold (GLD) and silver (SLV). Ostensibly, it is due to the draft plan by Cyprus to sell gold as part of its bailout.
This is an interesting explanation but I believe the main reason is simply that owning gold and silver is an overcrowded trade.
With central banks especially in Japan and USA monetizing their debt without any end more »
I am not in favor of letting daily news affect my long-term investments. Even so, the Cyprus news, with fears on the safety of paper money flaring up, reminded me of the necessity to diversify into commodities. In the following, I will explain my line of thoughts, starting at physical gold and ending up with an investment into shares of the gold miner GoldCorp(NYSE: GG).
The sixth largest exchange traded fund in the United States, SPDR Gold Trust (NYSEMKT: GLD), follows 1/10th of price of one ounce of gold. SPDR Gold Shares is also among the top ten largest holders of gold in the world. As of Feb. 29, the ETF has given a YTD loss of almost 11% to its investors. Talking about other ETFs that follow gold prices, Market Vectors Gold more »
For about 18 months now there has been a sharp divergence between the price of gold and the stock price of gold miners that is unsustainable in the long run. Taking into account the massive consensus that global inflation is coming, then it might be a good idea to revisit some major gold miners during these oversold conditions to look for a long term buying opportunity.
Any way you slice it, investors holding less than 10% of their assets in gold and silver do not understand the “risk” they are taking in a HYPERINFLATION scenario. Our Covestor.com portfolios today hold about 10% in precious metals and another 15%-20% in hard assets like oil and gas, plus real estate investments. The risk of holding gold and silver is FAR LOWER than not owning it, if a monster inflation orgy upmove starts in early 2013. Rising rates of inflation from here would decimate bond values and pricing. Related economic dislocations, including changing discount rates on earnings by stock investors could depress business values for years to come, much like the 1970s instance of high inflation.
Every year brings with it a few innovative, fresh investment opportunities.
When trying to figure out the best bargains for the upcoming year, most investors try and ride the 'stars' of the previous year. In almost all cases, last year's winners are this year's losers, and vice versa. In order to avoid this error in judgement, it is best to take a very close look at last year more »
Our best hedge investment idea currently is direct precious metals ownership, especially holdingiShares Silver Trust(NYSEMKT: SLV) in stock brokerage accounts. With both investment and industrial demand pushing silver higher in coming years, this uniquely situated metal is in terrific position to benefit from the economic future we foresee.
The reasons to be bullish on gold are not only prevalent, but have now been significantly strengthened by recent events. The fiscal cliff fears are only the beginning.
Debt Ceilings are a Political Tool, Not a Preventative Measure?
Tim Geihtner thinks we should solve our nation's economic problems by doing what? According to Tim (in reference to what the current administration in the White House needs to do) we more »
Wednesday’s trading session saw a somewhat uncommon divergence between gold and the stocks of the major gold miners. Using the SPDR Gold Shares(NYSEMKT: GLD) as a proxy for gold and the Market Vectors Gold Miners ETF(NYSEMKT: GDX) as a proxy for the miners, GLD was up 0.02% during the day, and the GDX shed 4.56%. While the long-term correlation between these two highly connected markets more »
I have to admit, my computer is going crazy with gold bugs. If you’re anything like me you are also wondering what to make of all the current fuss about gold. Buy or sell? Strike now, or wait? It turns out that just asking these simple questions is an invitation to go a little nuts.
What is yellow and holds a lot of value? What is George Soros betting big on? What does every Austrian economist love?
GOLD!
PRINT PRINT PRINT!
Last week Ben Bernanke said in his press conference that the Federal Reserve would do another round of bond buying or QE 3, but this time it is open ended and will continue to happen unless there is a meaningful reduction in the more »
Gold prices have looked strong over the past several weeks based on a near-perfect trajectory of global macroeconomic news items. First, the Fed announced that it stood ready to provide needed “policy accommodations” to help stimulate the economy. Then the ECB announced its uncapped bond-buying program, meant to target economic stimulus in the Eurozone. Next, the U.S. jobs report set the stage for the next round of quantitative easing more »
