Last week one of our clients said she became especially nervous after reading an article in the local paper... Dang! I hate reading the local paper! I only get Sunday's because a nice door-to-door peddler caught me at a weak moment... So when I heard the thump this morning, alas, I figured I'd forego the recycle bin and see what's what...
"Gold still looks appealing when you look at its run since October 2007, when the stock market was at its peak. An ounce of gold sold for about $740." So says the author of Going for Gold in today's business section...
That statement epitomizes the average investor mindset... Which is; whatever's happening now will go on forever... It's like looking at the NASDAQ in 1999 and saying "at 5,000, it looks appealing when you look at its run since the late '80s"... It's like looking at a $600,000 house in 2006 and saying "it looks appealing when you look at real estate's run over the past 10 years"...
So when gold was at $300 and the house at $200,000, what was the thought then? Certainly not "appealing when you look at its run"...
The optimal entry point, for any commodity, is never when everybody's after it - it's (counterintuitively for the "average" investor) always when nobody wants it...
Well said-- still like gold at ??? When it drops to 1400- 1350oz should be a buy--2-3% of fixxed income. Comments
ReplyDeleteI struggle with gold... It's been such a greed/fear driven play... How do you value it? No earinings, no dividends... I'd think it would have more downside than upside potential, even here... But I thought that at $1,300... Fascinating how it got hammered last week... Wasn't true to form (of late) - i.e., in previous weeks it rallied big time when fear hit the equity mkts... Small part of the portolio? Perhaps in a commodity index tracking fund? - sure...
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