-- Posted Wednesday, 25 January 2006 | Digg This Article
It seems gold is just determined to continue moving forward.
The days of low gold prices are forever behind this generation. Too much going on & there are too many longer term developments that are going to cause gold to be sought after by investors seeking a stable financial vehicle. And, in particular, we have not seen the last of the U.S. dollars retreat further south.
If you are like most investors, you enjoy looking for stocks that are going to make you rich. You enjoy searching for companies that have the potential to climb 1,000% & even higher. Only gold & silver stocks today can offer you this type of leverage. Already this bull market in gold has made many investors incredibly wealthy. And with gold predicted to continue rising for many more years there is still ample time to get into this market.
Again, why should you be considering gold as an investment today?
“Portfolios that contain gold are generally more robust and better able to cope with market uncertainties than those that don't.” “Adding gold to a portfolio introduces an entirely different class of asset. Gold is unusual because it is both a commodity and a monetary asset. It is an 'effective diversifier' because its performance tends to move independently of other investments and key economic indicators.” “Recent independent studies have shown that traditional diversifiers (such as bonds and alternative assets) often fail during times of market stress or instability. Even a small allocation of gold has been proven to significantly improve the consistency of portfolio performance during both stable and unstable financial periods.” http://www.gold.org/value/invest/whybuy/diversification/index.html
Ever been bit by a venomous snake?
I’ve been bitten by a non venomous snake before. Scary experience as at the time I wasn’t sure if it was poisonous or not. It’s interesting to think of the process that brings that dangerous venom into the blood stream. The two sharp fangs the snake carries would be ineffective without the accompanying total package that aids in the delivery process. Those sharp fangs are housed in a delivery receptacle (mouth). And then behind this “mouth” is the equivalent of a coiled, compressed & very powerful spring that enables the viper to strike with great force at its intended prey.
The point we are trying to illustrate above is that there is an involved & disciplined “process” even in what we suppose to be a simple operation.
And that really is the lesson we observe in life about everything. Nothing generally is as simple as it may initially appear to be in the beginning. There are always rules to follow. We’re attempting to draw an analogy here in our discussion of gold stocks. Yes, a great deal of money can be made & is being made by those investing in gold, silver & precious metals & resource stocks in general. But it is a good idea to follow a predetermined pattern of rules when investing in mining stocks.
“Gold stocks are stocks first and commodity instruments second, bearing this in mind we need to adopt appropriate stock trading and investment strategies in order to trade and invest in them successfully.” Reg Ogden,
http://ultimategold.ca/
Gold & silver stocks are volatile, but it is this very volatility that makes them great vehicles for making money. You don’t purchase a mining share with the intent of sitting on it for the next 20 years. Your first goal before even purchasing your first share should be to develop a selling plan. Don’t wait for the stock to start climbing & then because of greed & ill planning you just sit there watching your shares go to the moon thinking that this up hill climb will last forever…and never sell.
Though this sounds so simple every investor seems to forget that the intent is to eventually sell the blasted thing at some point after it has gone up. Don’t count your earnings until the stock is sold & the profit from the sale is sitting in your bank account.
Let’s listen below to what Paul van Eeden has to say about investing in gold stocks.
“Exploration is risky business. Buying exploration stocks is tantamount to gambling, and there are two safe bets when it comes to any exploration company. One: it will spend the money it has and two: it is highly unlikely that it will make a discovery. Yet I personally invest essentially all of my net worth in exploration stocks because I believe that there are ways to mitigate the risks and to shift the odds of success in my favor.” Paul van Eeden, http://www.kitco.com/weekly/paulvaneeden/jan202006.html
Many financial advisors will recommend selling half a stock issue when it doubles in price. There are many good reasons for this. For one it returns the original capital back to the investor. New funds are now available for new opportunities. In summary your capital is returned, you maintain a position in the stock issue to take advantage of further gains. With your now recouped original capital you now have the funds to invest in further investment opportunities & your risk is spread over a wider investment portfolio.
“Yes, the Gold "price" will fluctuate, but the inexorable and increasing momentum is UPWARD.” “…GOLD IS ACCELERATING UPWARD AT A PACE WHICH HAS SELDOM BEEN EQUALLED and only once - for a short while in late 1979 and early 1980 - surpassed.” “What we are now in the process of seeing is not Gold going "up", it is Dollars and Pounds and Yen and Yuan and Francs and Pesos and Dinars and everything else going DOWN.” Bill Buckler, http://www.the-privateer.com/gold6.html
What builds wealth is a simple & consistent buying & selling strategy. And it is this buying & selling strategy that provides for a continuous revenue stream for future investment opportunities & it is this process that builds consistent & long term wealth.
Remember, it is only the successful implementation of a sound & disciplined buying & SELLING strategy that builds wealth over a prolonged period of time.
“Gold price to keep up advance in 2006” "The sentiment towards metals generally, and gold in particular, is just uniformly bullish and investment is just remorseless. THERE IS JUST BUYING, BUYING AND BUYING," said Stephen Briggs, economist at SG Corporate and Investment Banking.” "The buying is just endless and the pool of money for investment is huge." "Gold is more and more becoming an insurance policy against any type of disruptive risk, and MOST PORTFOLIO MANAGERS BELIEVE THAT GOLD IS AN ASSET WHICH SHOULD NOT BE MISSED," said Frederic Panizzutti, senior vice-president at Swiss-based MKS Finance.” http://www.borsaitaliana.reuters.it/news/newsArticle.aspx?type=fundsNewsUK&storyID=2006-01-17T131019Z_01_NOA747391_RTRUKOC_0_FUNDS-POLL-GOLD.xml&archived=False
Any of you out there ever here of JP Morgan? Probably the most respected financial firm in the world today.
“JPMorgan clients include the world's most prominent corporations, governments, wealthy individuals and institutional investors.” http://www.jpmorganchase.com/cm/cs?pagename=Chase/Href&urlname=jpmc/about
And what does JP Morgan have to say about gold?
“Gold prices may reach almost $600 an ounce by the end of the year on supply worries, firming jewellery demand, geo-political concerns and favourable currency environment, J.P. Morgan Securities said in a report on Monday.” “Prices might even jump to $800 from $556 now, if Iran's nuclear issue heated up and oil hit $100 a barrel, it said.” “Fundamentals alone justify prices near $600 by year-end, while a meltdown in Iran/spike in crude could see $800 gold," it said.” "The recent pullback in gold from its record highs should not be interpreted as a peak, rather we see it as a stage in a longer rally…" http://za.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-01-23T140247Z_01_BAN350614_RTRIDST_0_OZABS-MARKETS-GOLD-20060123.XML
Let’s read part of that text again because I like what they said.
“Fundamentals alone justify prices near $600 by year-end...”
And there was one other thing said that I like.
"The recent pullback in gold from its record highs should not be interpreted as a peak, rather we see it as a stage in a longer rally…"
I believe what they are telling us is what we continue to say over & over. And the facts are that we are not witnessing a peak with the gold price, but merely the floor of a longer term price movement higher.
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David N. Vaughn
Gold Letter, Inc.
David4054@charter.net
January 27, 2006
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-- Posted Wednesday, 25 January 2006 | Digg This Article
