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As investors,
one of our main goals is to keep various market movements in
perspective. Yesterday, January
21, 2008, the Canadian TSX stock exchange fell over 600 points, leaving many
investors with a feeling of panic.
As mining equities were dragged lower in the down draft of the TSX
fall, many precious metals investors questioned their decision to invest in
commodities and now wonder if the bull market is over.
Although it is
logical to be concerned with a 600 point drop in the major index we do not
believe all markets should be lumped into one group. In other words, just because the general stock market tumbled lower it
does not mean all markets are of poor value.
Unfortunately
the market research of many investors consists of a quick glance at the
nightly news business review which displays the various markets daily
performance. It seems that once
these news casts show a market such as the TSX with a large number and red
arrow pointing down beside it, investors panic. It is understandable that such a short
term perspective could cause
concern, but what about the bigger picture?
 
In the above
charts you will notice that we included the price performance of the entire
bull market for both silver and gold.
In doing so, a minor, one day pull back in precious metals alongside a
larger pull back in Canadian stocks can be kept in perspective. Given the recent advance in the
precious metals we believe a temporary break should be considered
normal. The pull back in stocks
may strike fear in many investors, but as precious metals investors we are
less concerned and we do our best to not panic in such situations.
It is true that
many of our precious metals equities have experienced price weakness
recently. We must keep in mind
that mining equities ultimately derive their value from the commodity they
are producing or exploring for, therefore we are more concerned with the
overall relative value of the commodity itself rather than short term price
fluctuations of mining equities. In
our opinion, long term silver and gold are still undervalued relative to
other asset classes.
At www.investmentscore.com we try to keep
short term market movements in perspective and seek out asset classes that
appear to be of good value relative to other asset classes. To sign up to for our free newsletter
and to learn more about our investment philosophies please visit us at www.investmentscore.com.
By : Michael Kilbach
Editor
Investmentscore.com
Michel Kilbach is the President and Editor or www.investmentscore.com,
an online publication designed to show investors how to make profitable entry
and exit trading decisions in high growth potential investments. Investmentscore uses a unique scoring system as a visual
guide to assist investors in making lower risk / higher reward trades.
Legal Disclaimer: No content provided as part of the
Investment Score Inc. information constitutes a recommendation that any
particular security, portfolio of securities, transaction or investment
strategy is suitable for any specific person. None of the information
providers, including the staff of Investment Score Inc. or their affiliates
will advise you personally concerning the nature, potential, value or
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should not be relied upon.
Copyright © 2006-2007 Michael Kilbach
Information contained herein is obtained from sources believed to be
reliable, but its accuracy cannot be guaranteed. It is not intended to
constitute individual investment advice and is not designed to meet your
personal financial situation. The opinions expressed herein are those of the author and are subject to change without notice.
The information herein may become outdated and there is no obligation to
update any such information. The author,
24hGold, entities in which they have an interest, family and associates may
from time to time have positions in the securities or commodities discussed.
No part of this publication can be reproduced without the written consent of
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