Having watched my wisely invested, diversified portfolio dissolve repeatedly in pan market melt downs; I resolved Wall St. is just the home of the mafia since they left Vegas and save in savings accounts and purchasing gold and silver for acquisition and holding the faith "when I need it, it will be there for me". I subscribe to the theory when the ratio is 1 : 40, economic times are good and industrial uses of Silver drives the price up against Gold. And when the ration is 1 : 60, "duck and cover". The factories are not manufacturing. The ratio was up to 1 : 64+ at the beginning of August and has recovered to oscillating between 58 & 59.5. In short, I do not see any recovery. If anything, more like StagFlation. Currency not circulating. Anyone else into "metals" ? Moi 9/9/13 Gold $1378.6 / oz Silver $ 23.38 / oz
Here's how gold and silver work. Gold is primarily money - a repository of value - even though it has uses. Silver has industrial uses, but also becomes money when people are anxious. The result is that silver goes up or down with gold, but more so. When gold goes up, silver goes up an even greater percentage. When gold goes down, silver goes down an even greater percentage. Silver is as predictable as gold, but better for speculative profits. Either can be long-term "insurance" for your portfolio. This relationship between gold and silver prices sets up easy hedge/spread trades. When gold is rising, go long silver and short gold; when gold is falling go short silver and long gold. This may seem counter-intuitive. Why not go long or short across the board? The idea is to reduce risk while still profiting from the predictable direction of the spread. There are three major buying criteria for gold or silver. First, is the price above the 200-day moving average? This is true about 55% of the time for gold. When it applies, a double-long gold ETF like DGP shows about 32% annualized gain. Second, did gold rise in the preceding month against the US Dollar, the Euro, the Yen, and the Pound? If gold rises in all major currencies, then there's a bull market for gold, not just a perturbation of one currency. This is true about 32% of the time. When it applies, a double-long gold ETF like DGP shows about 42% annualized gain. Third, both the first and second criteria are met at the same time. This is true about 26% of the time. When it applies, a double-long gold ETF like DGP shows about 50% annualized gain. Right now, none of the criteria is met. To forecast the price of gold or silver short-term, look at the Commitments of Traders reports on the website of the Commodity Futures Trading Commission - http://cftc.gov. You'll see where the big traders are putting their money.
I own a bunch of gold and silver (my local bullion store offers storage) - but I'm not really in it for technical investing. I am of the opinion that it's very difficult and risky to try to invest based on graphs and trends. I invest in stories. The precious metals story makes sense to me, so I've run with it. I have a pretty diverse investment portfolio or someone in his early 20s - commodities, Bitcoin, shares, and hopefully, soon to be property Ain't freedom awesome?
I am in "buy and hold" mode. American minted Gold and Silver Eagles. I am sure,, when I need it, it will be there for me. No investment games. I already took my beating on margin purchases when I was "young". No bitcoins, too ethereal. American currency, Gold and Silver too. Save it. It does appear the values are going up, or the dollar down Moi No No Maple Leaf. Eagles ! The enemy is massed at our northern frontier. Go figure !
I'm still in my early 20s, hopefully I can learn from your mistakes I bought a stack of 2013 American Eagles last week, very nice coins. I'm not a fan of getting legal tender coins - it makes no difference to me. Silver is silver. As long as it's clearly marked as .999 I'm fine with it. I do really like the American Eagle design, but I've also picked up some NTR Buffalo Rounds and Mexican Libertads. All nice stacks. I have to get an extra coin to hold in my hand Calling Bitcoins ethereal is a little unfair, in my view. Think of Bitcoins as gold if its value was determined entirely on its usefulness as a medium of exchange. That's the main difference: Bitcoins have no practical use. Then again, gold's use in electronics and so on isn't really the reason it's so valued anyway. They're really not that different. I only have a few Bitcoins - it's a high risk investment. Whenever I pay for things over the internet, I use Bitcoins - you can't really use gold for that.
If calling Bitcoins ethereal is unfair, how about if we liken it to the Tulip Economy of the Dutch. All of a sudden, the market crashed, don'tchyaknow. http://en.wikipedia.org/wiki/Tulip_mania The reason to buy Eagles is you have a recognized commodity guaranteed by the mint as opposed to the Franklin mint Wisely investing your retirement in the Stock Market as my generation was advised is a sucker's move. Long term, Gold-Silver and Land ! When you need them, they will be worth more than the paper of my ATPG. A stock that folded yet my adviser advised. For the same money, why buy foreign coins? I also use Eagles for an alternative economy. Moi No No Maple Leafs
The tulip analogy is unfair, because it assumes that Bitcoin isn't a desirable medium of exchange. It is - it has characteristics that are making it well accepted - I mostly spend Bitcoins when I buy stuff online now. Just yesterday I bought the Humble Indie Bundle with them. Bitcoin's long term success depends entirely on whether or not it becomes widely accepted as payment. That's what everyone's speculating over - that demand will increase. There are only so many Bitcoins, just as there are only so many ounces of gold - so it's scarce. It having value as a medium of exchange only is not necessarily a downside. In any case, I'm only investing $2000 - I accept that it's a high risk investment, and accept the risks involved.
Bitcoins are the epitome of everything wrong with currency, it is controlled by the beginning investors who have all sold and made a lot of money. It will fall along with gold and every other currency that was popularized by fear from wealthy investor propaganda machines.
