The perception of gold has changed and this will cause upward price movement.
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You’ll probably find this study interesting. Looks like you nailed it with 15%.
I like a bullion weighting closer to 30% (at this time) and am currently about 70% silver and 30% gold. Ultimately, it depends on what the rest of your portfolio consists of.
http://www.bmgbullion.com/doc_bin/Ibbotson%20Executive%20Summary%20-%20BMG.pdf
At least 50% at this time.
Liquid asset or total asset?
Is that question addressed to me Lawrence?
It could be you Al. I think 50% of total asset is too high, but might be ok for asset outside of house and pension
If I said 50% that was a misprint. I meant 5% to 10%
Chickens Al. You got to invest in chickens. They have outperformed gold by a large margin since 1971. They beat the Dow and the S&P too. Like I always say, they are fungible, divisible, portable and delicious!
Gold is at a rare extreme high vs mining stocks, so I can’t get behind a 50% allocation to gold —too much opportunity cost. If most of that 50% was in silver, I would be much more comfortable with it.
I do expect my allocation to gold to grow in the next few years.
http://stockcharts.com/h-sc/ui?s=$GOLD:$HUI&p=M&yr=20&mn=11&dy=11&id=p70252466695&a=360291732
When I said 50% precious metals, I was including mining stocks. I agree they are even better than physical metal right now. If gold drops to 1050 and silver to 15 I’d raise my precious metals to 60%, and when the DJIA price drops below the price of gold I’ll swap back to the DJIA, keeping 10% gold and silver. That’s the plan. So let it be written; so let it be done.
I see. That makes good sense.
BB ~ That is precisely my thinking and weighting. It is the DOW/Gold ratio chart going back 100 years that I look at on a regular basis to keep perspective. Looking forward to a DOW/GOld ratio of less than 1:1. It could be 2016 , but probably closer to 2018-2020, now.
http://www.mining.com/chart-gold-price-vs-dow-jones-shows-metal-still-cheap-19417/
I think we compare apples and oranges. The listed companies come and go. The composition of the index also changes. Only one company has left from the original list. So by changing the index composition, they juice up the index, if we include the bankrupted companies, the index probably close to 0. However, gold is gold and it never changes from the start of the universe.
We have somewhere between 5% and 10% as insurance. I also consider our real estate to be insurance because it is certainly tangible.
I will probably move the gold/silver holdings up in the relatively near future, but I will discuss that on the Show before I do.
I have certainly not given up on the conventional markets either. By this I include our mining stocks and certainly our low priced med-tech stocks.
This is not investment advice, Ron!
Thanks Al….. I do understand that. I just respect your thought process, and also agree with you on real estate holdings. I am real leary of the conventional markets, my gut hasn’t felt good about it for a long time because all the debt, and the derivative problem. However, I know I am probably missing opportunities on the conventional side right now, and have been considering the energy side of things. Really appreciate the real pros you have discussing the markets. Very refreshing.
It is all so simple Ron. Intelligent guests who do not have to flog a product just keep it real simple!
OFF TOPIC, but very interesting comment on modern-day morality.
http://www.peakprosperity.com/blog/88227/how-federal-reserve-purposely-attacking-savers
I just printed this out and will read it shortly. Thanks
As regards gold and mining stocks; I believe they are at fire sale prices right now.
I have been accumulating, am accumulating, and will be accumulating.
Like Rick Rule has said; Get rid of those that are in your portfolio, that you hope will recover. If you are not sure they are solid, dump them and take the loss. Hope is not a good foundation on which to built anything.
Gold has stood the test of time. I am sure it will maintain purchasing power over the long term.
I agree with everything you said here, Professor.
I like Chris Temple’s approach and agree that the charts are secondary unless actively trading.
You can’t fight the Fed, and there appears to be a shift away from their ‘strong dollar’ policy. When it comes to fundamentals, the elephant in the room is the Fed and their crony banks.
“When you’re right, no one remembers; but when you’re wrong, no one forgets.” Ain’t that the truth across all venues.
Second paragraph bj, absolutely correct!
That’s why I never got into charting. I have to say that we did pretty well without them.
Now, Matthew, I am trying to learn more because I think that knowledge is important.
Don’t get me wrong, Al, I can’t imagine not looking at the charts for various reasons; I just think it’s a mistake to ignore everything else as so many technicians do.
And that Matthew, is why I am working overtime to learn about charting. Relying on my friends; however, coupled with my own methods has been a proven commodity to me!
Speaking of ROCKET SCIENCE…………………where is HH………….
Certainly don’t see as much from him as we have in the past. Too bad as I enjoyed much of his commentary!
Hello….Tony paging.. HH…Please report to the blog…..Thank You.
Max says Bo is not clean.
Who on this site is clean?
We are all dirty.
No one has a perfect track record.
Some are worse than others. I won’t name names.
I can’t disagree using that definition, James. (But only using that definition. I am confident that all the guests are very clean. You will note that some folks have not been included on this site in the guest category for at least the last three years.)
HH is finished. He got in too late and got out too early. Always on the wrong side of the switches. Maybe that will draw him out.
I called the 1212.80 gold bottom and he didn’t trust me.
That Sunday night speaking too hastily and CONFIRMING MY BOTTOM CALL HE POSTED…
On September 21, 2014 at 6:45 pm,
HEAVYHITTER says:
James guessed wrong.
Nice try James.
Lucky horse race bets don’t work.
HH – wherever you are – first I don’t guess, second the call was golden, third, you need to learn how to listen more and speak less.
HH……………….HAPPY HALLOWEEN…………….man where is that guy.
Didn’t any of you read his reason for coming off? Me too we’ve got a house to buy and a book to finish. ‘Sides HH is one of the few guys I took a shine to on this site.
Yes, but, I think he said , he would pop in once in awhile…..to see how things were progressing.
Common Andrew, we have a lot of great folks on this site. Not all but many!
Chris, your reasoning is good. It is even pretty convincing. But the markets are not going to move based on your ideas of the dollar, gold, stock market fundamentals or anything else. Even your comments on the Fed did not resonate with me well. Don’t forget that what the Fed wants, what the treasury wants, what the political elites want and what Wall Street does are all going to be different things as the dollar remains strong, war heats up and money printing comes to an end. The discordant reactions of all those market participants is sure to throw a monkey hammer into the most logical of reasons why stocks should decline and gold bounce off a bottom. So I hate to say this but I disagreed with almost everything you said today!
Still a big fan. We maybe just diverge in thinking this week though.
Birdman – I’m not looking so much at “my” ideas of things, but the markets’ ideas. And they seem quite convinced that the central banks intend to keep their feet pressed on the accelerator. You even need to put an asterisk next to the notion of the Fed ending its latest QE program. Through both their ongoing open market operations as well as the hundreds of billions of dollar swaps, etc. still sloshing around from 2008-2010, the idea that the Fed will be “tightening” is wrong. LESS stimulative now, perhaps; but certainly not tightening.
That said, traders can indeed at some point thwart all our thoughts; they are the proverbial Frankenstein monsters created by the central banks in the first place. But by and large, right or wrong, they are showing again that, like Pavlov’s dog, they will buy just about everything at each hint of more QE, low rates, etc.
Yup , agree with that. By the way Chris, I should also have said you have been doing some really great interviews lately. A lot of the time I can’t add to what you have said so I don’t say anything at all. Today was just one of those off days is all.
Just one question Al…..what % of gold and silver do you have as an insurance policy. I’ve been thinking 15% of ones net worth is a good number or close to it. What do you think??