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In Precious Metals, Stocks & Real Estate–Behave as the Strong Do

Here is compelling chart evidence that precious metals may fall further in the short run–see: http://www.kitco.com/ind/Tablish/20130417.html

We may see a fantastic buying opportunity before the metals begin their march back up. Even as they can fall on a parabolic curve, so also can they rise on a parabolic curve. As you know, booms and busts are common in the stock market and the commodities market. One follows the other. Precious metals usually fall fast and recover slowly. The curves down are usually steeper than the curves back up.

Panic selling creates great buying opportunities. Guess who will do better, the panicked seller or the patient buyer. The world is frightened that Cyprus, Greece, Italy, and Spain might be forced to sell some or most of their gold reserves and that this will push the precious metals market down. India, China, and others are ready to buy their gold. It will be central bank to central bank and will not likely get dumped on the open market. That’s what many investors don’t think about. Gold migrates from weak hands to strong hands. The huge deficits these countries have been running have placed them in a position to have to sell assets (just as nearly bankrupt Philadelphia is selling city assets now). Cyprus is the first that this may happen to. Debt free, cash rich nations, such as China, have been adding to their gold reserves and will likely continue to do so as these bankrupt nations disgorge their treasuries to pay for their deficits. The West is bankrupting itself. Weak investors are selling to the strong investors in all markets. The strong wait for desperation selling and the bargain prices it brings.

Others see more sinister manipulations as the cause of the crash of the gold market. The New American Magazine blames the Federal Reserve for dumping "paper gold" on the market in mass quantities. For more on this you will want to read their very compelling article: After Gold Crash, Experts Point to Central Bank Manipulation http://www.thenewamerican.com/economy/markets/item/15116-after-gold-crash-experts-point-to-central-bank-manipulation. If they're correct, then it's almost assuredly a great time to buy and hold real gold and silver.

Retail buyers are already buying into the bargains. The institutional buyers are waiting for a bottom to form or a trend back up to form. Then we’ll see strong institutional investors buying at bargain prices. The weak sell into weakness. The strong buy into weakness and, if they sell, they sell into strength. This same process happens in the stock market, and the real estate market. It is prudent in all markets to act as the strong do. Remember that silver is the tail and gold is the dog. Silver will move more than gold, but it will follow gold. The ratio is widening as silver overreacts. This means that silver will likely become tremendously oversold relative to what happens to gold. That may mean there will be more opportunity for upside in silver than in gold. Silver is more volatile.

My recommendation is that if you have not yet established the position you want in precious metals, you ought to consider this spring/summertime as the time to do so. Trying to call the bottom is difficult. Buying in tranches on the way down is recommended. Patience in buying and selling is a virtue. Panicking in buying and selling is not. No one should be going into debt to buy. When the masses start doing that, it’s the beginning of a bubble. Precious metals are just a hedge, a trade item, an insurance policy against currency failure. They don’t earn interest. Prudent people should consider putting 5-to 10% of their investment portfolio into precious metals as insurance against the monetary inflation that will surely follow this "global deleveraging process". There will be opportunities in the stock market and the real estate market as well. Behave as the strong do.

Disclaimer:
Investing in stocks, real estate, and precious metals is risky and could result in losing money. I am offering ideas for your consideration and education. I am not offering financial advice. Please do your own due diligence. I am not an investment adviser. Precious metals is not for everyone. I sell precious metals. You should do your own due diligence when making investment decisions of any kind. You should consult your own financial advisers before making any investment decision. I make no guarantees that by following any advice or suggestion I might make that you will realize any return. Beware, all commodity markets and other markets carry risk of loss.

leverton

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