The Dow Jones and ASX appear set to fall back to supports. There might be some measure by central banks to support the market. See ASX chart attached. ASX going to 4286 otherwise lower. We can expect some selling of gold positions if this gets serious. It is apparent that this market will take a serious hit soon and gold equities with it. The wil recover though, but you might want to stay away from any intangibles. I' inclined to keep MGK. AAM will probably hold 19c support. There is the risk that funds will sell gold to cover other positions though perhaps funds are better prepared this time. :) What do you think? They are playing with your money. :)
Currently travelling so don't expect speedy insights.
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Andrew Sheldon
www.sheldonthinks.com
Taking a look at the EuroZone, I can see why my earlier expectancy of support for the Euro has not been achieved. I do not give a lot of time to this market....not as much time as I should. Consider the following skit by the guys at
the 7:30 Report in Australia. Rather amusing actually. I was not aware of the level of ndebtedness if these figures are true. In any respect it highlights that the EuroZone is as negative as the USA, in fact more so. I would however caution people that the most probable response to this problem will be the break up of the EuroZone into two currencies - the current Euro and a new currency for the southern mediterranean countries. This will be necessary to establish new levels of accountability.
The implication of these developments is that gold is going to perform very well in future as these countries struggle for credibility. There will come a time when people will stop flipping between 'relativist' standards of value like currency, and they will abandon growth-based forms of asset value, in favour of precious metals like gold, silver and platinoid metals. i.e. Platinum and palladium, even rhodium.
Such news comes as no surprise as we and others have been warning of such problems as early as 2000. We started blogging about it around 2005. We maintain our belief in gold, and we expect a rally in precious metals in coming months. See our
commodities and
Speculators blogs.
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Investment Strategy
If you are investing for the long term, you still need an investment strategy. Dont be fooled by the rhetoric of fund managers. The reason they advise you to 'buy & hold' is because they dont want to compete with you in sell-offs. Markets and industrial sectors are cyclical, so they demand trading to get the best returns. Fund managers actually cant hope to match the performance of small investors (if you are half good) because they have to manage huge amounts of funds and charge you a fee besides.
MY ADVICE is (i) look at a range of market indices and decide upon what level of correction would give you the justification you need to get in & out of the market. It might be a 5-10% retracement or a break of trend. (ii) Diversify if you dont have an intimate knowledge of the company or management. More than 30% in one company is aggressive.
The Dow Jones and ASX appear set to fall back to supports. There might be some measure by central banks to support the market. See ASX chart attached. ASX going to 4286 otherwise lower. We can expect some selling of gold positions if this gets serious. It is apparent that this market will take a serious hit soon and gold equities with it. The wil recover though, but you might want to stay away from any intangibles. I' inclined to keep MGK. AAM will probably hold 19c support. There is the risk that funds will sell gold to cover other positions though perhaps funds are better prepared this time. :) What do you think? They are playing with your money. :)
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