gold - of interest

  1. 9,081 Posts.
    comments on GOLD daily reckoning
    - What may be bad news for bonds is, as every Econ. 101
    student knows, good news for least most of the
    time. Curiously, bond prices and gold prices have been
    rallying arm-in-arm for months. But that dance is likely to
    end very soon. The nascent inflationary trends developing
    in the U.S. are likely to be VERY bad for bonds and VERY
    good for gold. That's why most of us at the Daily Reckoning
    are fans of the yellow metal. Even so, we can't help but
    wonder when gold's awesome, months-long rally might take a
    breather. Was yesterday's sell-off the beginning of gold's
    pause that refreshes?

    - Given gold's dramatic run-up, an equally dramatic sell-
    off wouldn't be too surprising. But longer term, we
    wouldn't want to bet against this precious metal. Gold is
    in a long-term bull market, until further notice.

    - Long-term investors who'd rather not bother trading every
    "jiggle" (Jimmy Roger's term) in the gold market, will be
    heartened by the observation of Frank Holmes, CEO of the
    mutual fund company U.S. Global (Nasdaq: GROW). Holmes
    calculates that, over the last 30 years, an investment
    portfolio containing a 20% allocation to gold stocks has
    produced a higher return with less risk than a portfolio
    dedicated entirely to the S&P 500 Index.

    - An 80% mix of S&P 500 Index shares, says Holmes, together
    with a 20% mix of Toronto Gold and Precious Mineral Index
    shares, achieved an average annual return of 12% from 1971
    through 2002. That return was higher, and less volatile,
    than a pure S&P 500 holding.

    - History is nice, but most of us would prefer to know what
    the optimal portfolio allocation might be for the NEXT 30
    years, rather than the last 30 years.

    - Faithful Daily Reckoning readers, we suspect, would
    prefer kissing their sister (or brother) to allocating 80%
    of their portfolios to S&P 500 shares. And we'd hate to
    have those sorts of choices made on our account. So let's
    skip over the S&P 500 part of this discussion and focus
    only on the gold part.

    - For the next 30 years, some meaningful allocation to the
    yellow metal seems like a good idea. Whether the optimal
    weighting might be 20% or 2% is anyone's guess. But if the
    dollar is past its prime - which is a possibility - even a
    hefty 20% allocation to gold stocks would seem inadequate.

    CCI oversold.....usually recovers from these levels

    parabolic above wkly though

arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.