LATE REPORT
Gold took one on the chin today, but nothing like the stiff uppercut delivered to stocks and bonds. Gold finished down $17 today at $1331.39 and shedding 1.3% off the price. Silver got pummeled as well finishing the day at $16.57, down 63¢. Stocks finished down 665 on the day – a 2.6% shellacking. Bonds did not fare any better with the 10-year Treasury finishing at a 2.839% yield.
All in all, investors find themselves coping with the combined effects of a new surge in government debt, a threatened inflation, a weakening dollar and a promise of higher interest rates. For awhile, the markets avoided the worst, but now the momentum has shifted to the downside. Gold got caught up in the overall asset downgrade today, but we have to ask: Will it continue to be thrown in the same hay wagon with everything else as we move further down this treacherous road?
History tells us that gold is likely to separate from the pack and strike out on its own when market stress prevails. In fact, that is why it is universally recognized as a reliable portfolio hedge. (Please read former Bank of England governor Mervyn King’s words immediately below.)
Quote of the Day
“If we don’t quite know what the future holds, there is little point in getting carried away by very fancy mathematical calculations of optimal portfolios. Don’t rely on past data to be a good guide. Try to think through what mix of assets gives you the best chance of surviving some big event. That must mean including assets that are negatively correlated or uncorrelated in your portfolio.
And I am very struck by the fact that over many many years, central banks, governments and individuals have always, despite the protestations of economists, held some gold in their portfolio. Obviously, there is no high running return, but when unexpected things happen, particularly when governments rise and fall, then gold is a means of payment that everyone is always prepared to accept. And I think that’s why even central banks have always had a role in their portfolios for gold.” – Mervyn King, former Governor of the Bank of England
Let’s say that you have determined that the former Governor of the Bank of England, Mr. King, knows what he is talking about and that it is time for you to hedge your portfolio with gold.
What next?
Well, you might then consider how to go about choosing a gold firm with whom you can safely make purchases and subsequently sales. If that is the case, you might take interest in a page here at USAGOLD that gets a considerable amount of attention among searchers trying to choose a gold firm. It is aptly titled ––
–– and it is written by Michael J. Kosares, author of The ABCs of Gold Investing – How To Protect and Build Your Wealth with Gold and the founder of USAGOLD.
It is surprising how many prospective investors simply dive into gold and silver investing without much in the way of a consumer inquiry. That lack of simple due diligence has ended up costing a good many investors thousands of dollars, and sometimes even hundreds of thousands, before the damage is detected. At the page linked above, you will find some brief but valuable guidelines to help you choose the right gold and silver company. It might be the most important decision you will make on the road to becoming a gold and silver owner.
