Are you buying Gold Yet?

I am not a professional investor, I am not an investment counselor and frankly I’m not that good of an investor at all. 

That being said, I can ask the question, have you bought any Gold yet?  I have been buying actual gold or gold stocks for the past 5 years.  I have been doing this because of personal investment studying I have been doing over the years.  I have come to the conclusion that the market goes through very long cycles that for the most part are driven by interest rates and the direction of interest rates.  This means are interest rates going up or going down. 

Currently we are in a cycle where interest rates are generally going up.  While an economy is in that cycle, generally we will experience inflation meaning the price of most things will go up.   But also in that environment both stocks and real estate tend to struggle.

So, let’s take a look at how gold investments have been doing.  GLD is an index of companies that mine for gold.   It’s one year return is about 25%.  That is not too shabby. 

The Tocqueville Gold Fund (TGLDX) from it’s low of 29.75 last May to a current high of 42.92 your return would have been more than 30%. 

Even a more interesting play may be ProFunds Precious Metals Ultra Fund (PMPIX).  This fund is hedged so it’s movement is even greater than the market as a whole.  This means when is goes up, it goes up more than the market, but when it goes down, it goes down more than the market.  From it’s low of approximately $20 in May to it’s recent high of $45.22 it has returned more than 100%.  Can you say DUDE????

Now, these investments are NOT for the faint of heart and you must watch them closely. But, I don’t think we are near the end of the run yet.  Again, I believe this trend is driven by interest rates and the rates are on a long term upward trend.  Also, if you listen to any talk radio at all you hear everyone talking about investing in real estate.  Even grandma is talking about investing in real estate.  Whenever everyone on the street is talking about an investment, it is time to get out of that investment. 

Well let me ask you, are all your friends talking about investing in Gold yet?  I doubt it.  Watch gold carefully and consider getting some exposure to gold in your portfolio.

Remember, you are completely responsible for your investment decisions.  Enjoy your investing!!!

waynem

About waynem

As a Minnesota based photographer and artist I have been greatly influenced by the Upper Midwest. I focus my skills and energies on portraits, landscapes, cityscapes, architectural and fine art work. My best work comes from images first painted in my mind. I mull over a prospective image for weeks or months, seeing it from different angles and perspectives, then finally deciding what to capture. The result is images that deeply touch people's emotions and powerfully evoke memories and dreams. My images are used commercially by companies and organizations ranging from Financial Services firms, mom and pop Ice Cream shops and The Basilica of St Mary to communicate their shared vision and values. Book and magazine publishers have featured my images on their covers. My photographs also grace and enhance the decor of many fine homes.
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