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as you heard me say many times ,more money has been lost trying to buy low and sell high than any other mantra .
we all thought low was when markets fell 2000 points., only it wasn't. it fell another 4,000 triggering stop losses and sending investors bailing licking their wounds.
more money is made buying high and selling higher as the trend is your friend as opposed to trying to catch a falling knife.
Gold is not an investment. It is a hedge against bad things happening as part of a diversified portfolio of bonds and stocks. I wouldn't hold more than 5% personally. Don't forget that gold is taxed as a collectible at 28%. Ouch! And don't forget that gold pays no dividends.
Orange line - US dollar index - started to decline on October 6, 2014, the same days Gold bounced up.
Green line - support level set 4 times in July 26-29 of 2010, then in June 28 of 2013 then in December 19-31 of 2013 and the most recently in October 3-4 of 2014
Red line - 50-day moving average - Gold is still below it but close to cross it. If it happens it may attract new bullish investors which may push Gold higher
Pink Line - 120-day moving average - Gold is still below
SBV Flow (indicator below chart) - Selling/buying volume flow - still red, but moving up which mean that bullish pressure is increasing
TSI (True Strength index) and SMI (Stochastic Momentum Index) are on the rise as well.
I'd not feel comfortable holding gold by itself or speculating its near term moves but it's fine as a fixed % allocation of a disciplined and well diversified portfolio.
i had started to use the permanent portfolio about 4 weeks ago but had 2nd thoughts about it in the new norm.
gold no longer responds much to anything so it would take a collapse in the dollar to move and rising bond rates have been hitting bond funds hard especially long term ones .
so two days after i did the pp i thought better of it and switched to my own model portfolio which better fit my wants in retirement .
well like the perfect storm right after i got out gold plunged and bonds took a good shot.
so as of yesterday the permanent portfolio i bought would have been in the hole for 30k .
mostly because gold has no bottom.
my own mix is still up 3k as of yesterday which is 3 weeks later .
i think gold will be quite dead for a long while and if we have a long slow trend up in rates long term bonds will get hit so i think the permanent portfolio may have met it's waterloo with bonds and gold getting ravaged.
Last edited by mathjak107; 07-22-2015 at 03:13 AM..
Sure it does. It is a commodity and it went down just like oil and copper and pretty much all commodities.
"Responding" isn't just going up. Gold never "responded" to inflation news or wars or terrorist acts. ( One or two day pops from retail buyers don't count. ) The media keeps checking, but there is no correlation. It never moved opposite to stocks or oil or anything like that.
Quote:
Originally Posted by mathjak107
... it would take a collapse in the dollar to move.
Do you mean like the dollar collapse of 2001 to 2011? From 2001 to 2008 the USD went from about 120 to about 70.
From 2011, USD went from about 75 to about 100 where it is now.
I guess it "responds" to the dollar. I guess that makes sense, the dollar is a currency, and gold is money. If you live in Europe or Japan and bought gold, your investment in your local currency has done pretty well, or as you put it "responded" pretty well.
There was no reason to own it as in the long term so far as any situatuion that would have been a plus for gold turned out in the long term better for conventional investments with no gold.
Whether it was the inflation of the 1970's or the great depression , 15 years or longer gold was a waste of time .
No one can predict the future but those who sat in gold the last 6 or 7 years likely gave up enough so if they were in equity's instead they could lose 1/2 that money in a down turn and still be a head of sitting in gold.
most who own gold have a vision of one day being last man standing. the reality is likely anything so bad that we have a collapse here would likely not have folks who lost their money in all other assets bidding on gold.
is there a chance ? sure . but not enough for me to waste money on.
Last edited by mathjak107; 07-22-2015 at 10:25 AM..
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